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

We can summarize the investment incentive certificate application process in a few basic steps. These steps both guide the applicant and ensure the smooth running of the process.

Planning the Investment Project

The application process begins with a clear planning of the investment's scope and details. This includes determining the investment's subject, location, duration, cost, and resources. The type of incentive available is also clarified at this stage. The total investment amount must be clearly stated.

Registration in the E-TUYS System

The Ministry of Industry and Technology accepts investment incentive applications through the Electronic Incentive Application and Foreign Capital Information System (E-TUYS). Applicants must first register with the system. During the registration process, basic information such as the MERSİS (Registration System) number, company information, and KEP (Registration and Public Disclosure Platform) address are entered into the system. This step is mandatory for the complete application form.

Filling Out the Application Form

When completing the application form via E-TUYS, all investment details are entered into the system. The form includes:

• Subject and sector of the investment

• City and region where the investment will be made

• Investment amount and financing plan

• Number of personnel to be employed

• Types of incentives requested

The most important point to consider at this stage is to enter complete and accurate information. Incorrect information or missing documents may result in the application being rejected.

Preparation of Required Documents and Uploading to the System

In addition to the application form, several documents are required from the investor. These include:

• Trade registry gazette and certificate of activity

• Tax certificate and signature circular

• Investment information form and feasibility report

• Machinery and equipment list

• Complete and up-to-date documents will expedite the application process.

Payment of Application Fee

A fee must be deposited into a revolving fund account at the time of application. The fee may vary depending on the type and size of the investment. This step is mandatory to officially initiate the application.

Submitting and Tracking the Application

Once the application is completed, investors can track its status through the system. During the application review process, the Ministry may request additional information or documentation. Responding to these requests promptly will expedite the process.

Evaluation and Approval Process

Applications are meticulously reviewed by the Ministry of Industry and Technology. The nature of the investment, its cost, and planned support are taken into consideration. If the application is approved, an investment incentive certificate is issued.

What to Do After Application Approval

Once the application is approved, investors can begin using the support provided under the document. Regular reporting must be completed during this process, and they must be prepared for audits by government agencies. Adherence to the deadlines and conditions specified in the document is critical to the smooth implementation of the incentives.

Conclusion

Investment incentive certificates offer significant advantages to entrepreneurs and companies in Turkey. Tax exemptions, social security support, and interest rate reductions reduce investment costs, enabling projects to be implemented quickly and efficiently. Obtaining an investment incentive certificate with proper planning is a strategic advantage for both small entrepreneurs and large-scale companies. Seeking professional support throughout the application process expedites the process and prevents potential errors.