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The Relation of Immigration and Investment in the World
Mr. Bayram Tekçe, the chairman of Tekce Overseas, spoke on the relationship between immigration and investment in the world. The speech took place at the Re360 Gathering of Real Estate on December 7, 2022. Mr. Tekçe was also there as the vice president of the Real Estate International Promotion Association (GİGDER). And also as the head of the Research and Publishing Committee within the association.
The summit’s main purpose was to enlighten the public on the relationship of diverse topics. These topics included real estate, investment, immigration, sustainability, climate change, infrastructure, development, digitalization, and more. Mr. Tekçe has spoken on the topics of immigration, investment, and the latest book published by GİGDER. Set out to enlighten the public and the investors, GİGDER has been publishing a series of books.
The previous books were about the preferences of foreign investors and a comparison of policies of governments regarding foreign direct investments. The latest book is named the Relation Between Immigration and Investors in the World. It presents in-depth sectoral research and also provides insight into the future. You can find the highlights from the speech and the book below;
Foreign Real Estate Investment in Turkey Should Be Encouraged
According to the statistics, the global real estate sector witnesses 400 billion dollar worth of traffic annually including international purchases. Turkey is among the top 10 countries for real estate investments. However, Mr. Bayram Tekçe has stated that Turkey is not living up to its potential. Entering into the top 5 should be the aim for Turkey according to him.
He notes that foreign real estate investment in Turkey should be encouraged with appropriate policies to achieve this aim. He stated that globally, foreign direct real estate investments mount an important amount of income for countries. It makes a significant contribution to their economic growth. (see graphic 1: Incomes of the countries from residency by investment programs)
He continues on to say that the real estate housing market in Turkey has the potential of boosting economic growth considerably. But the initiatives to attract foreign direct investment (FDI) are not sufficient. According to Mr. Tekçe, the government should encourage FDI with appropriate policies and investment program options for different needs.
According to Mr. Tekçe, Turkey’s first objective should be attracting high net worth individuals (HNWI). HNWI are individuals with assets worth over 1 million $. High net worth individuals generally prefer diversifying their investments. In that aspect, a country that provides convenient residency conditions is preferable for HNWIs for investing in.
For this reason, many countries are racing to attract these individuals. It is stated that Turkey will become the 7th preferred country by 2025 if the conditions remain the same.(see graphic 2: Countries’ potential to attract HNWI by 2025)
Mr. Tekçe and GİGDER state that irregular and regular immigration definitions should be made clear in public opinion. This is crucial in order to make the high net worth individuals (HNWI) come for investing in Turkey. So, what is immigration, what is an immigrant, and what are the differences between irregular and regular immigration?
Immigration is the movement of people from one place to another with the purpose of settling. The term immigrant is generally used for people who relocate between different countries permanently. Irregular immigration indicates the relocation of people from one country to another without permission. In some cases, these people may gain protection and rights through refugee status due to humanitarian reasons.
But, irregular immigration is naturally perceived as a security issue due to the difficulties of identification. On the other hand, regular immigration defines the relocation of people with the permission and rights provided by laws. Regular immigration might result from many different reasons. These reasons might be retirement, economy, living in a better natural environment or climate, or getting better public services.
Whatever the reason is, regular immigration provides a qualified workforce, consumer diversity, more visibility in the international arena, and cash flow. For this reason, it may contribute to the growth of the Turkish economy.
Different Investment Options Should Be Offered to Immigrants for Relocation
Mr. Bayram Tekçe also notes that different real estate investment programs should be offered to immigrants. The needs of immigrants for relocation should be taken into account in order to attract qualified and high net worth individuals. Real estate investment is generally considered the best way to relocate and overcome the hardship of renewing visas for immigrants.
People usually prefer to obtain a residence permit by purchasing real estate. Countries generally attract more FDI through residence permit programs than citizenship programs. (see graphic 3: Rate of incomes obtained through residency by investment and citizenship by investment programs in the world)
However, sometimes a residence permit does not meet the needs of immigrants in Turkey. In that case, some people turn to the citizenship option and some start to rethink their relocation plans. In the end, this situation may be discouraging for many.
Mr. Tekçe states that Turkey can attract more foreign direct investment and qualified individuals. This can be achieved by offering different real estate investment options in Turkey for residency status. Mr. Tekçe and GİGDER propose a 3-step program for residency and citizenship in order to achieve this objective.
According to the said book published by GİGDER, this 3-step program consists of silver visa, golden visa, and citizenship programs. The silver visa is the first step of the program. It is reserved for people who want to relocate for education, retirement, and vacation purposes.
The silver visa is planned to be the visa type with minimum investment requirement. On the other hand, the golden visa will require immigrants to invest more in real estate in Turkey. This type of visa will be directed to people who want to work in Turkey or relocate to Turkey permanently.
Countries like Spain, Portugal, Greece, South Cyprus, and Malta have had a golden visa program since the 2010s. These countries are in the same region as Turkey. For this reason, they are direct rivals of Turkey on the subject of foreign direct investment according to Mr. Tekçe.
Turkey can also attract a substantial amount of foreign direct investment like these countries did in the last decade. This can be done by implementing appropriate programs.
Digital Nomads are the New Targets of the Residency by Investment Programs
Globalization, the development of better communication channels, and the recent pandemic have affected everyone’s perception and way of living. With these happenings, thousands of companies have switched to the remote work style. This situation gave birth to a tremendous increase in the number of digital nomads.
Digital nomads are people who live in a foreign country while still working remotely for their jobs in their home country. Some of these people adapt to the complete nomad lifestyle and travel to different countries every few months. On the other hand, some prefer to settle in a country that they have always dreamed of living in.
Regardless, digital nomads can also contribute significantly to the host country’s economy through investments and purchases. After all, digital nomads are generally highly qualified workers and they earn roughly 119.400 dollars in a year. It is estimated that the total investment potential of the market which is growing 23% annually is currently 21.4 billion dollars. The growth of this market is expected to continue till 2025.
For this reason, many countries are looking for ways to attract digital nomads. The number of countries that offer residency by investment to digital nomads increases. It has risen from 27 to 49 in the last two years.
Some countries have already taken necessary legal steps to facilitate the residency conditions for digital nomads. Germany, Spain, Greece, Norway, Malta, Italy, and Cyprus are among them.
According to Mr. Tekçe and GİGDER, the Turkish government also should take necessary legal steps. And also promote Turkey as the best country in the world for digital nomads.
Citizenship As a Sign of Devotion and Prestige
According to Mr. Tekçe and GİGDER, Turkish citizenship should be a sign of devotion and prestige. Currently, many foreign investors and regular immigrants who just want to live in Turkey for specific occasions apply for citizenship. This happens due to the lack of alternatives.
Obtaining Turkish citizenship will become a sign of devotion and prestige as it should be with this proposed 3-step program. This way, only foreigners who have a real bond with Turkey and feel a sense of belonging will apply for citizenship.
Eventually, this 3-step immigration investment program can increase the prestige of Turkey in the international arena. In the end, it would contribute to the lives of everyone in Turkey.
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Created: 29.12.2022, 09.00Updated: 04.12.2023, 11.01
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