Capital Flight from Turkey Accelerates as Investors Seek Safety Abroad

$52 billion in five years — U.S. emerges as top destination for Turkish capital

Turkey is witnessing a sharp surge in capital outflows as domestic investors increasingly channel funds abroad amid rising concerns over political and regulatory risks.

According to data from the Central Bank of the Republic of Turkey (CBRT), total overseas investments by Turkish residents reached $51.9 billion over the past five years — a 166% increase compared to the previous period.

During the same period, portfolio investments abroad jumped nearly fivefold, from $3.5 billion to $20.1 billion, marking a historic high in cross-border stock and bond purchases.

Record $19.5 billion in capital outflows over the past year

In just the past twelve months, total capital outflows reached a record $19.5 billion, driven by $10.4 billion in portfolio investments and $9.1 billion in direct investments. Of this amount, roughly $2.6 billion was spent on foreign real estate acquisitions.

Direct investments abroad nearly doubled in five years, climbing from $16.1 billion to $31.8 billion, with $6.8 billion of that total allocated to real estate assets.

Meanwhile, Turkey attracted $80.1 billion in incoming capital over the same period, consisting of $62.7 billion in direct investments and $17.4 billion in portfolio inflows.

U.S. leads destinations for Turkish investors

The United States has become the top destination for Turkish capital, receiving $6.5 billion in direct investment over the past five years.
In contrast, U.S. direct investment into Turkey stood at just $2.8 billion during the same period.

Similarly, while the United Arab Emirates invested $1.9 billion in Turkey, Turkish investors funneled $2.3 billion into Emirati assets — highlighting the growing imbalance between inflows and outflows.

Vietnam and Thailand move in the opposite direction

While Turkish investors are increasingly transferring wealth abroad, Vietnam and Thailand are attracting record foreign direct investment (FDI).
Vietnam drew roughly $14 billion in FDI in the first half of 2025, while Thailand registered more than $30 billion in new investment applications — both marking multi-year highs.

This contrast underscores a critical shift: while Southeast Asian economies are absorbing new capital, Turkey is exporting it.

Why capital is leaving Turkey

Economists point to several factors behind Turkey’s capital flight: concerns about property rights, potential government confiscation, tax uncertainty, and political interference.

Investors are increasingly parking their wealth in the U.S. and Europe to hedge against what they see as domestic “policy risk.” Many prefer hard assets abroad — particularly real estate and equities — as insurance against sudden regulatory or fiscal measures at home.

Economic implications

The trend raises red flags for Turkey’s macroeconomic stability. Capital flight not only weakens the domestic investment base but also exacerbates external vulnerability by increasing pressure on foreign reserves and the lira.

Unless investor confidence is restored and regulatory predictability improves, analysts warn that Turkey’s growth potential will remain constrained — even as regional peers continue to attract robust capital inflows.