{"id":156956,"date":"2026-07-13T08:45:08","date_gmt":"2026-07-13T05:45:08","guid":{"rendered":"https:\/\/paksoy.av.tr\/?p=156956"},"modified":"2026-07-13T11:21:50","modified_gmt":"2026-07-13T08:21:50","slug":"defence-industry-trends-and-legal-landscape-in-turkiye","status":"publish","type":"post","link":"https:\/\/paksoy.av.tr\/en\/2026\/07\/defence-industry-trends-and-legal-landscape-in-turkiye\/","title":{"rendered":"T\u00fcrkiye&#8217;s Defence Sector: Investment Climate, Legal Framework and Strategic Outlook"},"content":{"rendered":"\n<h2><strong>Key Points<\/strong><\/h2>\n<table>\n<tbody>\n<tr>\n<td width=\"604\">\n<ul>\n<li>T\u00fcrkiye&#8217;s defence sector has grown into a significant global export and manufacturing hub, supporting more than 1,400 defence projects and generating approximately USD 20 billion in annual turnover.<\/li>\n<li>The sector operates within a comprehensive regulatory framework; foreign investment, whilst not explicitly restricted, may trigger reassessment of licences and operational authorisations \u2013 early regulatory assessment is essential.<\/li>\n<li>Investors should note that a change of 51% or more in the shareholder composition of a target entity holding a production permit may lead to revocation of that permit. Appropriate transaction structuring and pre-transaction regulatory engagement are accordingly essential prerequisites to achieving both regulatory compliance and operational certainty.<\/li>\n<li>Recent high-profile programmes, including the Eurofighter Typhoon procurement agreement and the Steel Dome air defence network, illustrate current investment activity in the sector.<\/li>\n<li>T\u00fcrkiye&#8217;s export licensing framework and comparatively flexible technology-transfer regime may provide structural advantages for international investors.<\/li>\n<li>Any investment or collaboration in the sector requires well-planned transaction structuring and proactive engagement with the Presidency of Defence Industries and the Ministry of National Defence.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><em>This edition has been updated to reflect recent market developments and the latest available industry data <\/em><em>to mark the NATO Summit held in Ankara on 7\u20138\u00a0July\u00a02026, at which T\u00fcrkiye&#8217;s defence sector capabilities were prominently showcased to an international audience. Paksoy will continue to publish further editions in this series as the legal and regulatory framework governing the sector evolves.<\/em><\/p>\n<h2><strong>Sector Overview<\/strong><\/h2>\n<p>T\u00fcrkiye\u2019s defence sector has undergone a notable transformation in recent years, both in terms of production capabilities and international engagement. The sector has evolved from a primarily procurement-driven model towards a more integrated industrial base focused on design, development, and advanced manufacturing. This shift is reflected in the increasing scale and complexity of ongoing defence programmes, including integrated air defence systems, as well as in significant capacity expansion initiatives undertaken by leading domestic manufacturers. In parallel, the sector\u2019s external performance is strengthening, with rising export volumes, expanding industrial cooperation and long-term international partnerships. Today, the Turkish defence sector exports more than USD\u00a010 billion<a id=\"ref1\" href=\"#fn1\"><sup>[1]<\/sup><\/a> worth of defence products to over 185\u00a0countries<a id=\"ref2\" href=\"#fn2\"><sup>[2]<\/sup><\/a>.<\/p>\n<p>The sector&#8217;s growth has been supported by T\u00fcrkiye&#8217;s established industrial base, comprising more than 3,500\u00a0companies and 100,000\u00a0employees, an extensive supplier network and a skilled workforce capable of supporting high-volume manufacturing at scale. As a result, the sector today supports more than 1,400\u00a0defence projects with a combined portfolio exceeding USD\u00a0100 billion<a id=\"ref3\" href=\"#fn3\"><sup>[3]<\/sup><\/a> and generates approximately USD\u00a020 billion in annual turnover. <a id=\"ref4\" href=\"#fn4\"><sup>[4]<\/sup><\/a><\/p>\n<p>The growth in the overseas sales and export contract pipelines has further led to broader cross-border industrial cooperation, strategic collaborations, and mergers and acquisitions in foreign markets. One of the factors supporting this international expansion is the Turkish export licensing framework. The Ministry of National Defence of T\u00fcrkiye (<em>Milli Savunma Bakanl\u0131\u011f\u0131<\/em>) generally processes export licence applications within comparatively short timeframes, while the Turkish export-control framework is generally subject to fewer procedural approval requirements. Furthermore, unlike the export-control regimes of certain jurisdictions, the Turkish regulatory framework does not generally restrict the subsequent international transfer of technologies developed in T\u00fcrkiye. This affords foreign investors greater flexibility to develop technologies in T\u00fcrkiye for international deployment and commercialisation, subject to applicable legal, contractual and project-specific requirements.<\/p>\n<p>Another factor contributing to the sector&#8217;s development is the availability of public investment support, including investment incentives, tax and customs advantages, social security and financing support, incentives for R&amp;D centres and technology development zones and, for strategically significant projects, individually negotiated investment packages.<\/p>\n<p>These developments have positioned T\u00fcrkiye as one of the region&#8217;s leading defence manufacturing and export hubs and a significant participant in international defence industrial cooperation. They have created a dynamic environment for cross-border investment, technology partnerships and strategic collaborations, making careful transaction structuring and regulatory engagement more relevant for international investors.<\/p>\n<h2><strong>Leading Sector Participants<\/strong><\/h2>\n<p>The Turkish defence sector is led by a number of established companies, several of which are affiliated with the Turkish Armed Forces Foundation, which has played a significant role in supporting the development of T\u00fcrkiye&#8217;s domestic defence capabilities. Key industry participants include:<\/p>\n<ul>\n<li>ASELSAN, T\u00fcrkiye\u2019s largest defence electronics company specialising in radar systems, electronic warfare technologies, communications and air defence systems<\/li>\n<li>Turkish Aerospace Industries (TUSA\u015e), the country\u2019s leading aerospace manufacturer responsible for the development and manufacture of aircraft, helicopters, unmanned aerial systems (UASs), satellites and space technologies<\/li>\n<li>ROKETSAN, a leading developer and manufacturer of missile systems, rocket technologies and precision-guided munitions<\/li>\n<li>HAVELSAN, a defence software and systems company specialising in command-and-control systems, simulation technologies, cyber security and naval combat systems<\/li>\n<li>Baykar, a defence technology company specialising in unmanned and autonomous systems, with an estimated 60%\u00a0<a id=\"ref5\" href=\"#fn5\"><sup>[5]<\/sup><\/a> share of the global unmanned combat aerial vehicle (UCAV) export market<\/li>\n<li>BMC, a manufacturer of military trucks, logistics vehicles and armoured platforms with Turkish and Qatari shareholders<\/li>\n<\/ul>\n<p>The sector is also characterised by long-standing industrial cooperation and joint venture arrangements. Notable examples include TUSA\u015e Engine Industries (TEI), a joint venture between Turkish Aerospace Industries, GE Aerospace, the Turkish Armed Forces Foundation and the Turkish Aeronautical Association, as well as Alp Aviation, which has maintained a long-standing industrial partnership with Sikorsky.<\/p>\n<h2><strong>Foreign Direct Investment <\/strong><\/h2>\n<p>There is no foreign direct investment authority in T\u00fcrkiye that clears foreign investment transactions. As a general principle, foreign entities may freely establish, acquire, and dispose of interests in business enterprises and the amount of foreign ownership in companies is unlimited, except for certain regulated sectors, such as aviation, where the majority of a company\u2019s share capital must be held by Turkish shareholders.<\/p>\n<p>Although there are no explicit restrictions on foreign direct investment in the defence sector, the presence of foreign direct investment may result in a reassessment of existing licences and permits and may influence the scope of activities that the defence company is authorised to carry out. For instance, where the target holds a production permit relating to military products, a change in the shareholding structure that results in a change of 51% or more in the shareholder composition may lead to the revocation of the relevant production permit. In this context, the involvement of foreign direct investors may trigger additional regulatory review processes and, in certain circumstances, operational restrictions. Accordingly, it is both customary and advisable to engage with the relevant authorities at an early stage and seek regulatory comfort prior to completing any such transaction.<\/p>\n<h2><strong>Legal and Regulatory Landscape<\/strong><\/h2>\n<p>The Turkish defence sector operates within a comprehensive regulatory framework shaped by national security considerations and sector-specific legislation. This framework governs the establishment, licensing, operation, and supervision of industrial enterprises engaged in the production, sale and export of military equipment, weapons, ammunition, and explosives. It also introduces authorisation requirements, ongoing notification obligations, and enforcement mechanisms in case of non-compliance, with detailed procedures prescribed in the relevant secondary legislation.<\/p>\n<p>Separately, defence activities involving classified information, projects, systems, and technologies are subject to a dedicated security regime. This regime regulates, among others, facility and personnel security clearances, classification principles, access to sensitive information, and related supervision mechanisms.<\/p>\n<p>The Presidency of Defence Industries (<em>Savunma Sanayii Ba\u015fkanl\u0131\u011f\u0131<\/em>) plays a key role in determining defence policies, coordinating projects, managing procurement processes, and supporting the sector through various financing and incentive mechanisms. The Ministry of National Defence of T\u00fcrkiye (<em>Milli Savunma Bakanl\u0131\u011f\u0131<\/em>) remains a core authority, particularly in relation to licensing and operational approvals.<\/p>\n<p>Companies active in the sector are subject to ongoing supervision and are required to comply with various operational, technical and security-related requirements. Moreover, they are subject to notification and reporting obligations regarding key corporate matters, including shareholding structure, board composition, and authorised signatories. These obligations become particularly relevant in the context of foreign investment and corporate transactions. Changes in ownership or control may trigger regulatory scrutiny, especially where such changes could affect the company\u2019s eligibility to participate in defence programmes or maintain existing licences and permits.<\/p>\n<h2><strong>Recent Industry Developments<\/strong><\/h2>\n<p>The following recent developments illustrate the scale and pace of activity in the sector:<\/p>\n<ul>\n<li>T\u00fcrkiye and the United Kingdom recently signed an agreement valued at approximately USD\u00a010.7\u00a0billion for the procurement of 20\u00a0Eurofighter Typhoon fighter jets. Following the procurement agreement, T\u00fcrkiye and the United Kingdom have signed a training and support agreement to facilitate the implementation of the programme.<\/li>\n<li>Turkish defence companies signed contracts worth approximately USD\u00a06.5 billion to develop the integrated Steel Dome air defence network. The programme continues to advance through increased industrial investment and production, with ASELSAN announcing plans to increase Steel Dome deliveries by approximately 50% in 2026.<\/li>\n<li>ASELSAN announced plans to invest approximately USD\u00a01.5\u00a0billion in a new defence technology base expected to significantly increase production capacity and become one of the largest integrated air defence production sites in Europe.<\/li>\n<li>The Baykar\u2013Leonardo joint venture established to develop and produce UASs for the European market was conditionally approved by the Italian government in June\u00a02026 under Italy&#8217;s foreign investment review regime. Baykar separately completed its acquisition of the Italian aviation company Piaggio Aerospace in 2025.<\/li>\n<li>T\u00fcrkiye and the United States are discussing a broader cooperation framework that may include defence cooperation and energy investments. The discussions are reported to extend to T\u00fcrkiye\u2019s re-engagement with the F-35 fighter jet programme and possible investments by US energy companies in regional energy projects. Discussions regarding broader defence cooperation also continued during the NATO Summit held in Ankara in early July\u00a02026. However, no formal agreement has been announced to date.<\/li>\n<\/ul>\n<h2><strong>Market Outlook <\/strong><\/h2>\n<p>The Turkish defence industry is transitioning from an export-oriented manufacturing base into a platform for industrial cooperation, technology partnerships and cross-border investment. Large-scale procurement programmes and cooperation initiatives with international partners, substantial investments in next-generation defence technologies, and the continued expansion of export activities by Turkish defence companies all point towards a more internationally integrated and technologically advanced industry.<\/p>\n<p>At the same time, cross-border collaborations, including joint venture arrangements in areas such as unmanned aerial vehicles (UAVs), demonstrate the \u00a0integration of the Turkish defence sector into global supply chains. Investment in unmanned and autonomous systems over the past two decades has positioned T\u00fcrkiye as a leading developer in this field, supporting growing international demand for Turkish technology and technical expertise. T\u00fcrkiye&#8217;s role as a defence manufacturing and industrial cooperation partner has been further reinforced by the heightened emphasis placed on defence industrial production, industrial cooperation and joint capability development during the 2026\u00a0NATO Summit in Ankara.<\/p>\n<p>The Turkish defence sector continues to present opportunities for foreign investment, industrial cooperation and strategic partnerships. Those opportunities remain subject to a regulatory framework shaped by national security considerations, making early legal and regulatory assessment an important component of transaction planning.<br \/>\n&nbsp;<\/p>\n<style>\np[id^=\"fn\"] {\n    font-size: 0.9em;\n    line-height: 1.4;\n}\n<\/style>\n<p id=\"fn1\"><a href=\"#ref1\">[1]<\/a> Presidency of Defence Industries (<em>Savunma Sanayii Ba\u015fkanl\u0131\u011f\u0131<\/em>) (SSB), <em>2025 Annual Report<\/em>, published in February 2026.<\/p>\n<p id=\"fn2\"><a href=\"#ref2\">[2]<\/a> Remarks by Prof Dr Haluk G\u00f6rg\u00fcn, President of SSB, at the 4<sup>th<\/sup> International Conference on Global Strategies in Defence and Aerospace Industry, 31 January 2025.<\/p>\n<p id=\"fn3\"><a href=\"#ref3\">[3]<\/a> SSB, <em>Defence Industry in Numbers<\/em> (<em>Say\u0131larla T\u00fcrk Savunma Sanayii<\/em>), available on the official SSB website.<\/p>\n<p id=\"fn4\"><a href=\"#ref4\">[4]<\/a> The figures in this paragraph are based on SSB, <em>2025 Annual Report<\/em>, published in February 2026, unless otherwise indicated.<\/p>\n<p id=\"fn5\"><a href=\"#ref5\">[5]<\/a> Baykar, <em>\u201cBaykar, the Global Leader in UCAV Exports, Achieves $1.8 Billion in Exports in 2024\u201d<\/em>, Press Release, 1 February 2025.<\/p>\n<p>025.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>T\u00fcrkiye\u2019s defence industry has undergone a notable transformation in recent years, both in terms of production capabilities and international engagement.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[365],"tags":[],"class_list":["post-156956","post","type-post","status-publish","format-standard","hentry","category-none"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ 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