(Bloomberg) -- Turkey is set to allow international companies to move data on local customers out of the country, in a long-awaited overhaul of data protection rules that businesses say could attract billions of dollars in foreign direct investment.

A bill on the move, a copy of which was seen by Bloomberg, is being debated in the general assembly on Thursday, where President Recep Tayyip Erdogan’s ruling Ak Party and its nationalist ally the MHP have a comfortable majority.

The bill would allow companies to centralize data processing outside the country, helping to cut costs. The telecommunications industry stands to benefit most from the change, with IT, retail and aviation firms also among those positively affected, according to an impact analysis by the Istanbul-based International Investors Association, known as Yased.

It says the move could attract as much as $18.6 billion in FDI to Turkey from its 274 members, citing an internal survey of them. Members include the local units of Apple Inc., Ford Motor Co., Allianz SE and Diageo Plc.

“ٌSome multinational companies are waiting for this law to come into effect before making further investments in Turkey,” Chairman Engin Aksoy, who’s also chief executive officer of Vodafone Group Plc’s Turkey unit, said in an emailed response to questions.

“This alignment is expected to reduce barriers to data flow and enhance the use of technology and digitalization in commercial life, thereby making Turkey a more attractive investment destination for international investors,” he added.

FDI Falling

FDI in Turkey has been on the wane since it peaked at $22 billion in 2007, Yased data shows. Flows fell 22% in 2023 to $10.6 billion, due largely to an unstable macro environment that saw annual inflation soar to 65% and the lira slump.

Erdogan’s government abandoned an unorthodox growth-at-all costs policy after his reelection in May and has been trying to win back investor confidence. 

“The path has been opened for multinational companies to manage their operations in Turkey in a much more comfortable and productive way,” said Sefa Karcioglu, a data protection lawyer and CEO of data security company DPC.

--With assistance from Tugce Ozsoy.

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