Investment Incentives Guide in Turkey: Grow Your Investments with Government Support

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If you are planning to invest in Turkey, an Investment Incentive Certificate can provide you with significant advantages. Thanks to this certificate, you can not only reduce your investment costs but also benefit from many government-supported financial opportunities. In this guide, we will take a detailed look at what the Investment Incentive Certificate is, who can obtain it, what advantages it provides, the application process, and the different types of incentives available.

What is an Investment Incentive Certificate?

The Investment Incentive Certificate is an official support tool provided by the Republic of Turkey to investors. In other words, the state confirms your investment project with an official document, essentially saying: “We support this investment and provide certain financial advantages.”

The certificate offers different benefits depending on the type, scale, and region of the investment. For example, investments made in the 5th and 6th regions receive stronger incentives, while incentives in more developed regions such as Istanbul or Ankara are more limited.

What is the Purpose of the Investment Incentive Certificate?

The Investment Incentive Certificate is a crucial support mechanism provided by the government to entrepreneurs and businesses that plan to invest. With this certificate, investors gain cost advantages and enjoy significant ease in planning their investments. Cost advantages mean the reduction of tax and financial burdens that may arise during the investment process. Holders of an incentive certificate can benefit from various financial supports such as customs duty exemption, VAT exemption, tax reduction, social security premium support, and more. This reduces the overall cost of the investment and helps ensure a faster return.

The planning convenience arises from knowing in advance which supports will be available. This allows investors to organize their cash flow, budgets, and growth strategies more effectively. Moreover, the certificate provides regional and sectoral advantages. Investors in less developed regions can benefit from additional supports, while those investing in sectors prioritized by the state can access more favorable incentive opportunities.

Who Can Obtain an Investment Incentive Certificate?

Almost every type of investor operating in Turkey can apply for an incentive certificate as long as they meet the required criteria:

Sole proprietorships: Small entrepreneurs setting up their own workshops.

Limited and joint-stock companies: Larger-scale investments in production or export-focused activities.

Foreign investors: Foreign individuals or companies wishing to establish new facilities or expand existing ones in Turkey.

Advantages of the Investment Incentive Certificate

VAT Exemption: No VAT is paid on machinery and equipment purchases.

Customs Duty Exemption: No tax is applied on imported investment goods.

Tax Reduction: Corporate tax reductions are applied at specific rates.

Social Security Premium Support: The employer’s share of employee insurance premiums can be covered by the state.

Interest or Profit Share Support: Financial support may be provided for investment loans.

Land Allocation: Public land can be allocated at favorable rates or free of charge. Additionally, strategic investments may benefit from income tax withholding and energy support. For example, large biotechnology laboratories or high tech manufacturing projects can be supported with project-based incentives.

Types of Investment Incentives

General Incentives: Suitable for small and medium-sized investments.

Regional Incentives: Applied across six different regions in Turkey; the less developed the region, the greater the incentive rate.

Strategic Investments: Aimed at reducing import dependency by promoting high value-added products such as defense industry, biotechnology, or electric vehicles.

Project-Based Incentives: Tailored for special projects designated by Presidential decree, such as electric car production facilities or advanced medical device manufacturing.

Priority Investments: Cover areas such as defense, health, IT, environmental technologies, and education, offering extra advantages like VAT exemption and land allocation.

Which sectors are included in the incentive scope?

• The Turkish government provides incentive support to a wide range of sectors, including:

• Industry and Manufacturing: Automotive, textiles, food, chemicals.

• Agriculture and Livestock: Modern farms and production facilities.

• Energy: Renewable energy projects such as solar and wind power plants.

• Logistics and Tourism: Hotels, airports, and infrastructure projects.

• Technology and R&D: Software development, license acquisitions, R&D centers.

Which Expenses are Supported?

Expenses supported under the investment incentive certificate include:

• Machinery and equipment purchases

• Factory and production facility construction expenses

• Software and license purchases

• R&D and innovation expenses

Application Process for the Investment Incentive Certificate

The application process involves several essential steps:

Planning the Investment Project
Define the scope, location, cost, duration, and resources of the investment. Decide on the type of incentive to be applied for.

Registration in the E-TUYS System
Applications are submitted through the Electronic Incentive Application and Foreign Capital Information System (E-TUYS) managed by the Ministry of Industry and Technology. Companies must register with their MERSIS number, corporate details, and registered email (KEP).

Filling Out the Application Form
Details of the investment (sector, location, budget, financing, workforce, and requested supports) are entered into the system. Accuracy and completeness of information are critical.

Preparing and Uploading Required Documents
Including:

Trade registry gazette and activity certificate

Tax certificate and signature circular

Investment information form and feasibility report

Machinery and equipment lists

Payment of Application Fee
The fee, determined based on the investment type and size, must be deposited into the revolving fund account.

Submission and Follow-Up
Applications can be tracked through the system. The ministry may request additional information or documents during the review.

Evaluation and Approval
Applications are examined by the Ministry of Industry and Technology. If deemed suitable, the Investment Incentive Certificate is issued.

Post-Approval Obligations
Once approved, investors can benefit from the incentives. They must comply with reporting requirements and be prepared for inspections to ensure the proper use of supports.

Conclusion

Investment Incentive Certificates in Turkey provide great advantages for both entrepreneurs and corporations. Tax exemptions, social security support, and interest reductions lower investment costs, enabling projects to be implemented faster and more efficiently.

With careful planning and correct application, obtaining an Investment Incentive Certificate can be a strategic advantage for both small businesses and large corporations. Seeking professional assistance during the application process can also help speed up procedures and prevent potential errorsğ