Government Incentives and Supports

Investor's Guide and Things for Consideration - Government Incentives and Supports

Turkey is a developing country that needs a lot of investment in this process and whose EU membership process is ongoing. Within this scope, there are many activities and activities that need to be done in our country, from infrastructure to industrialization, from urbanization to transportation, education to transportation, from health to environmental protection. Globalization, the new world order, the change in the understanding of competitiveness and the transformation that takes place in the world are pushing states, especially the developing countries.  In this context, many studies are being carried out in order to make continuous and balanced development of our country taking into consideration the current developments, the potential of our country and needs.

Moreover, real and legal persons are supported by various institutions / organizations of our country when they realize their dreams of appropriate projects within the scope of the said aims. In addition, various supports can be obtained within the scope of harmonization with the European Union (EU) acquis.

In our country, many areas are supported from R & D and innovation studies to support agricultural production, from environment friendly production to industrialization efforts.

Turkey's new Investment Incentive Program, which was introduced to the public in April 2012, entered into force with the Decision on State Aids in Investments dated 15 June 2012 and numbered 2012/3305; The procedures and principles regarding the implementation of the decision are also defined in the Communiqué No 2012/1.

On the condition of satisfying the conditions required by each application;

·         Real persons, ordinary partnerships, capital companies, associations, cooperatives, business partnerships,

·         Public institutions and organizations,

·         Professional bodies and universities in the form of public institutions

·         Associations and foundations

·         Turkish branches of foreign companies can benefit from the supports offered with the applications covered by the Investment Incentive Program in Turkey.

Companies established in Turkey by real persons who are citizens of foreign countries according to the Foreign Direct Investments Law no. 4875 and / or legal entities established by laws of foreign countries (such as corporations) are in the status of Turkish companies, thus they are entitled to benefit from the supports in the Investment Incentive Program in equal conditions as domestic investors.

Therefore, the companies in this status are evaluated within the scope of "capital companies" mentioned above and benefit from the Investment Incentive Program. On the other hand, Turkish branches of foreign companies whose headquarters are located outside Turkey under Turkish Commercial Code and not in the company status, are eligible to benefit from the support.

A foreign real person who wants to invest in Turkey may apply to benefit from the Investment Incentive Program with an incorporated company or limited liability company to be established in Turkey; and a foreign company established abroad may apply to benefit from the Investment Incentive Program with an incorporated or limited liability company or with a branch to be established in Turkey.

Within this framework, our country is divided into 6 regions under the regional and national incentive system. The incentive support rates vary according to these 6 regional priorities. Muğla Province is located in the region 1. The support rates that can be taken from the investment made in our city are as follows:

SUPPORT ELEMENTS PROVIDED IN REGIONAL INCENTIVE APPLICATIONS

SUPPORT ELEMENT

REGIONS

1

2

3

4

5

6

VAT Exemption

+

+

+

+

+

+

Customs Duty Exemption

+

+

+

+

+

+

Tax Deductions

Investment Contribution Rate (%)

Outside OIZ

15

20

25

30

40

50

Inside OIZ

20

25

30

40

50

55

Insurance Premium Employer Share Support

Outside OIZ

2 years

3 years

5 years

6 years

7 years

10 years

Inside OIZ

3 years

5 years

6 years

7 years

10 years

12 years

Investment Place Allocation

+

+

+

+

+

+

Interest Support

Internal Credit

-

-

3 points

4 points

5 points

7 points

Currency / Forex Indexed Loan

1 points

1 points

2 points

2 points

 SUPPORT ELEMENTS PROVIDED FOR STRATEGIC INVESTMENTS

 

SUPPORT ELEMENT

Support Rates and Durations*

 

VAT Exemption

+

 

Customs Duty Exemption

+

 

Tax Deductions

Investment Contribution Rate (%)

50

 

Insurance Premium Employer Share Support

7 years (10 years in Region 6)

 

Investment Place Allocation

+

 

Interest Support

Internal Credit

5 points

 

Currency / Forex Indexed Loan

2 points

 

Insurance Premium Employee Share Support

10 years (Only for investments in Region 6)

 

Income Tax Stoppage Support

10 years (Only for investments in Region 6)

 

VAT return

+ (Only for investments at and above 500 Million TL)

 

 

 

LARGE-SCALE INVESTMENTS

Sequnce No

Topics of Investment

Minimum Fixed Investment Amounts (Million TL)

1

Production of Refined Petroleum Products

1.000

2

Production of Chemical Substances and Products

200

3

Port and Harbor Services Investments

200

4

4a

4b

Investments in the Manufacture of Motorized Land Vehicles

Motorized Land Vehicles Main Industry Investments

Motorized Land Vehicles Sub-Industry Investments

 

200

50

5

Railway and Tram Locomotives and / or Wagon Manufacturing Investments

 

 

 

50

6

Transit Pipeline Transport Services Investments

7

Electronic Industry Investments

8

Medical Instruments, Precision and Optical Instruments Manufacturing Investments

9

Pharmaceutical Production Investments

10

Air and Space Vehicles and / or Parts Manufacturing Investments

11

Machinery (including Electrical Machinery and Equipment) Manufacturing Investments

12

Investments for Metal Production:

Investments in the production of final metals from ore and / or concentrate of metallic minerals in group IV/c specified in the Mining Code (including integrated mining investments in these plants)

 

SUPPORT ELEMENTS PROVIDED FOR LARGE-SCALE INVESTMENTS

SUPPORT ELEMENTS

REGIONS

1

2

3

4

5

6

VAT Exemption

+

+

+

+

+

+

Customs Duty Exemption

+

+

+

+

+

+

Tax Deductions

Investment Contribution Rate (%)

OSB Dışı

25

30

35

40

50

60

OSB İçi

30

35

40

50

60

65

Insurance Premium Employer Share Support

OSB Dışı

2 yıl

3 yıl

5 yıl

6 yıl

7 yıl

10 yıl

OSB İçi

3 yıl

5 yıl

6 yıl

7 yıl

10 yıl

12 yıl

Investment Place Allocation

+

+

+

+

+

+

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