Turkey is expected to see an influx of investment from smaller Thai firms with a recent policy that provides grants for foreign-owned companies.

Tuna Sahin, vice-president of Turkey's Small and Medium Enterprises Development Organization (Kosgeb), said a mechanism put in place 18 months ago will drive foreign investment.

"We support all SMEs located inside Turkey and do not judge whether they are owned by foreigners or Turkish people," said Mr Sahin.

"Even a 100% Thai company located in Turkey is supported by us as well, as we do not think of the origin."

SMEs in Turkey account for 45% of that country's total annual exports.

In Thailand, 10,000 SMEs account for 30% of international shipments.

Mr Sahin said 80% of companies in Turkey are in retail, services and trading, with 14% in manufacturing and 5% in construction.

Kosgeb, which supports and promotes SMEs on a project basis, received a budget of US$350 million last year to support 20,000 projects for more than 100,000 SMEs.

Projects receive various levels of grants from Kosgeb, depending on product type and location. SMEs in a less-developed area, for instance, are given a greater amount of support.

The minimum grant is half the total cost, while the highest goes up to 80%.

"Although we take applications from individual firms, an enterprise in Turkey [applying for support] should be a member of any chamber, whether it be commerce, industry or commodities," said the Kosgeb executive.

Bilateral trade between Thailand and Turkey averages $1 billion a year, with Thailand enjoying a surplus of more than $500 million annually.

Trade value is expected to surge by 20% this year to $1.2 billion.

Kosgeb yesterday signed a memorandum of understanding with Thailand's Office of Small and Medium Enterprises Promotion (Osmep) for SME development through business matching, workshops and knowledge exchange.

The three pilot industries for cooperation are spas, textiles and information technology, while the first business matching will be held in Bangkok next March.

Wimonkan Kosumas, Osmep's deputy director-general, said Turkey is looking for suppliers in the information technology sector, and there is potential for Thailand's shipbuilding and spa industries to enter Turkey.