Izmir: The Rising City of Aegean and Turkey

Turkey’s third most developed city, İzmir is on the edge of making a big leap, attracting foreign direct investment (FDI) for the unlimited potential of the city. By using the advantage of the İzmir Development Agency (İZKA) whose structure is deemed to be a revolutionary step towards multilevel governance, İzmir will soon get more popular on the global investment agenda.
İzmir: An overview
The historical, cultural, geographical, social and economic advantages of İzmir all together constitute a perfect environment for investors. The city is a welcoming region in all aspects, considering its physical, social and economic advantages.

As of 2008, İzmir is the 3rd largest city in Turkey with its population of 3,795,978 following İstanbul and Ankara. It reflects higher levels of population density and urban population compared to national average but at the same time, the city is also a region of vast and fertile green fields, river basins and mountains, coastal lands which provide a wide range of social, cultural and economic dynamism for the city.

According to several studies held by public and private institutions such as State Planning Organization or International Competitiveness Research Institute, İzmir is the 3rd most developed and competitive city in Turkey. The developed and competitive nature rises not only from the city’s physical and historical advantages but also from its highly skilled human capital.
The city hosts a very young and dynamic population with a highly developed education level and vocational skills. There are 5 universities in İzmir offering a wide range of academic and technological studies almost in any field and 2 more are on the pipeline, starting education in the 2009-2010 academic year. These universities also offer R&D and innovation services for public and private sectors.

There are also a wide range of vocational training opportunities in İzmir in terms of both geography and institutions. The city also hosts several international high schools offering education in many European languages. American Collegiate Institute, Lycée Saint Joseph d’İzmir, DSI German School are amongst them.

İzmir has always been a gateway for different cultures as the city is located as one of the most significant opening gates of Anatolia, the world’s oldest bridge between the West and the East. Therefore, the city has a historical nature of intercultural dynamism where different cultures meet in terms of social, cultural and economic activity.

İzmir can be reached by land (road and rail), air and the sea. It is connected to national highway and railway networks. International access is provided by the recently extended Adnan Menderes Airport, which is just 18 km from the city center and has a capacity of 9 million passengers per year, and through ferry connections to and from Alsancak and Çeşme International Seaports. 55% of Turkey’s container exports pass through İzmir Alsancak Seaport. Consequently, the city’s comprehensive integration into the national and international transportation networks provides easy and fast access to İzmir.

İzmir contributes a substantial 8% to GNP, with the main sector activities centering around agriculture, industry, commerce and tourism. The city is one of the busiest export gateways of Turkey. In terms of production, 15% comes from agriculture, 15% from commerce, 35% from industry and 35% from services and tourism.
Important factors playing a substantial role in attracting investors and corporations are; developed logistics, fertile hinterland, organized industrial zones with modern infrastructure and export possibilities. The dense population of the city also makes it an important industry center, and thus also a large market for the food industry. For industry, İzmir creates 11.7% of total added value and in addition, it handles 20% of national exports and 12% of imports. İzmir hosts 10% of the largest 500 industrial corporations of Turkey and nearly half of all industrial corporations of the Aegean Region. (LİMAN RESMİ)

Organized industrial and free trade zones in İzmir are developed on 3 main axes (north, east and south) around major highways with a total area of more than 2000ha. The main organized industrial and free trade zones are:
•    Atatürk Organized Industrial Zone
•    Kemalpaşa Organized Industrial Zone
•    Tire Organized Industrial Zone
•    Aliağa Organized Industrial Zone
•    The Aegean Free Zone (ESBAŞ)

ESBAŞ is the first free trade zone founded and operated by a private company in the country, which generates more than 4 billion USD per year in international trade. The Zone generates over 15% of the total trade volume of free trade zones in Turkey.

Tourism sector is an important source of economic activity in the city. By 2008, approximately 1.074.088 foreign visitors accessed the city by air and sea. Main attractions are the natural beaches, with the following examples of tourist options: yachting destinations such as Çeşme, surfing opportunities in Alaçatı, pilgrimage destinations like Ephesus, Ayasuluk and Mount Parnassos, spas and facilities with therapeutic amenities in Balçova, Pergamon, Bayındır and Çeşme.

Sectors offering potential for investors in İzmir are renewable energy, logistics, agro industry, life sciences, hi-tech industries and education.

With its abundant geothermal sources and wind energy generation potential, İzmir provides investors with many opportunities for the use of alternative energy. Primary renewable energy resources in İzmir are wind, geothermal and solar. Also, there are considerable incentives provided by The Renewable Law and Electricity Market Licensing Regulation of Turkey. The logistics capacity of İzmir is currently not fulfilled; there is a need for new investments. Agriculture is a fundamental economic activity in many districts of İzmir. Food, beverages and textile sectors need to be further developed. Although İzmir’s indicators in health sector are better than the national average, health institutions are concentrated in the city center and there is a need for new health investments in many other districts. İzmir ranks 5th in Turkey in education. However, the sector needs improvement in quality and access.
As of February 2009, 1.271 companies with foreign capital have been established in İzmir. 60 companies with US capital have been set up in İzmir as of end 2008. Giant international companies having investments in İzmir include British American Tobacco, Tesco, Hugo Boss, Krone, Delphi, Akzo Nobel, Japan Tobacco International, KT&G and Hayes Lemmerz.

The investment climate in Turkey, which has gone through a reform in 2003, offers free (international) movement of capital, profits, dividends and salaries. There is no screening, approval, share transfer or minimum capital requirements for foreign investors.

İZKA Investment Support Office is the one stop shop for all the business people who wish to relocate in İzmir. The Agency provides consultancy in every step of the investment process and coordinates and follows up the official license and permission applications. All the services are provided free of charge. Being the first development agency ever established in Turkey, İZKA is promoting İzmir’s investment opportunities to investors seeking lucrative chances ahead. Investment promotion activities steam from the vision of regional development plans. İZKA coordinates the planning of the city in accordance with the central government policies together with local authorities. Multilevel governance system introduced with İZKA is fresh and exciting both for the locals and the potential business people of İzmir. İZKA is also running a grant scheme system for the emerging fields of the city. The grant scheme is open to all willing to relocate in İzmir.

“İzmir is a very organized city and according to my point of view, it is one of the typical Mediterranean cities, yet it is also one of the best. İzmir has a great future potential. İzmir is a young and fresh city. However, it is also an ancient city around which many civilizations were founded. We are happy to be here.” Simon King, Tesco Kipa, CEO

“İzmir is a surprisingly good city, with a lot of open minded people, excellent education level and lots of opportunities for the future. This city is much more exciting than the other cities of Turkey. İzmir has gone through a serious development process in years.” Paul Schwaiger, Sun Express, General Manager

“The city of İzmir provides an excellent base for the investors as it is ideally located as a gateway for both Europe and the Middle East. It boasts a world class airport making it easily accessible both directly, as well as via a short flight from İstanbul. Its infrastructure is both modern and efficient and this combined with its prime location, cosmopolitan business atmosphere and welcoming population give the city all the ingredients for any successful business venture.” Stuart Chase, Swissôtel Grand Efes İzmir, General Manager
Last modified onSaturday, 06 May 2017 10:07