The banking sector
The Turkish banking sector is large by regional standards, well capitalised and liquid, which gives it flexibility to finance investment in the country. Alongside banks, the credit market offers project financing through leasing and factoring companies.
There are three types of bank in Türkiye:
- Deposit banks
- Development and investment banks
- Participation banks, which operate on interest-free principles in line with globally accepted Islamic finance standards
Banks may extend cash loans, non-cash loans and interest-free (participation) loans, in local and foreign currency, to legal entities and to individuals — with restrictions described below.
Foreign currency borrowing: the rule that catches people out
Residents in Türkiye are also obliged to use banks established in Türkiye as intermediary institutions to receive loans from abroad.
Leasing and factoring
Leasing may take the form of a domestic lease, a cross-border lease, a sale and leaseback, or a sales-aid lease. Real estate, vehicles, computers, office equipment, medical equipment, construction machinery, manufacturing machinery and other fixed assets may be obtained through leasing.
For capital-intensive investment, leasing can also interact usefully with the investment incentive regime, where equipment acquired under an incentive certificate benefits from VAT and customs duty exemption.
Factoring companies purchase receivables documented by invoices arising from goods and services sold, and assume the payment risk. For a company with concentrated customer exposure or long payment terms, this is a common working capital solution in the Turkish market.
International development finance
Alongside Turkish financial institutions, several international development banks provide funding for investment projects in Türkiye, including:
- The European Bank for Reconstruction and Development (EBRD)
- The European Investment Bank (EIB)
- The International Finance Corporation (IFC)
These institutions are most relevant for larger projects, and typically for investments with an infrastructure, energy transition, manufacturing capacity or SME-lending dimension. Their diligence and reporting requirements are heavier than a commercial bank's, and the financial reporting they expect is usually IFRS.
What a lender will ask a foreign-owned company for
Whether the lender is a Turkish bank, a leasing company or a development institution, the file looks similar:
- Audited or reviewed financial statements, often on an IFRS basis rather than the Turkish tax-basis statutory accounts
- A parent guarantee or comfort letter, and the group's own financials
- Evidence of the shareholding and control structure, including ultimate beneficial ownership
- Up-to-date trade registry records and signature authority
- A clean position on tax and SGK liabilities
The first item is where foreign-owned companies most often lose time. If your Turkish entity keeps only tax-basis statutory accounts, producing bankable IFRS statements at the point a lender asks for them takes weeks you may not have. Running the IFRS conversion monthly rather than annually removes that delay entirely.