Who Can Benefit From Investment Incentives?

Incentive schemes granted by the new program can be applied by a real person of foreign nationality through a joint-stock or limited liability company, and by a foreign company based in foreign countries through a joint-stock, limited liability company or a branch established in Turkey.

What are the Instruments?

Value Added Tax (VAT) Exemption

Investment machinery and equipment imported and/or locally provided within the scope of the incentive certificate will be VAT exempt.

Customs Duty Exemption

Investment machinery and equipment imported within the scope of the incentive certificate will be exempted from customs duty set in the Import Regime Decree. Customs duty rates based on relevant Chapters are shown in the attached lists of “Decree on Import Regime”.

Tax Deduction

Reduced income or corporate tax rates will be imposed on the investor’s income under the incentive scheme according to the characteristic of the investment until the amount calculated on the basis of government’s contribution rate, determined by the same scheme and corresponding to a certain percentage of the fixed investment amount, is reached. The contribution rate to investment refers to the rate of the fixed investment subject to tax deduction, whereas tax deduction refers to the rate of income or corporate tax to be reduced until the contribution rate is reached.

Social Security Premium (SSP) Support for Employer's Share

This incentive facilitates that for any additional employment created by an investment with an incentive certificate solely under Strategic Investment Incentive Schemes, the amount corresponding to the employer’s share of the social security premium on legal minimum wage, paid by the investor, is covered by the Ministry. In order for an investor to benefit from this support, the project should be concluded and a completion visa should be granted.

Land Allocation

Government land will be allocated for investments with incentive certificate under large scale, strategic and regional incentive schemes in accordance with the rules and principles defined by the Ministry of Finance, depending on the availability of such land in the provinces where investments are made.

VAT Refund

VAT collected on the building & construction expenses made for Strategic Investments will be rebated provided that the fixed investment amount is over 500 million TL.

Investment Schemes

  • General Investment
    Incentive Scheme
  • Regional Investment
    Incentive Scheme
  • Large-Scale
    Investment Incentives
    Scheme
  • Strategic Investment
    Incentive Scheme

Only VAT and Custom Duty exemptions are applicable in this type of incentive.
There are two requirements to benefit from this incentive mechanism in Istanbul, which are “the investment topic must not be listed among ‘not to be supported’ section” and “the minimum fixed investment amount must exceed TRY 1 million level.”

Vat Exemption, Customs Duty Exemption, Tax Reduction, Social Security Premium Support and Land Allocation are available in Regional Investment Incentive Scheme. Regional system aims to eliminate inter-regional imbalances by means of encouraging pre-determined sectors. Therefore, investment topics to be supported have been identified by taking into consideration of the economic potentials of each province and economies of scale. Through the new regime, 81 provinces of Turkey are classified under 6 investment regions. Istanbul, which is the most developed region of Turkey, is classified in the 1st degree regional list.

Incentives Instruments Istanbul (Region 1)
VAT Exemption Available
Customs Duty Exemption Available
Tax Reduction (Rate of Contribution to Investment %) 50% (out of OIZ Rate of Contribution to Investment %15)
55% (in OIZ Rate of Contribution to Investment %20)
Social Security Premium Support (Employer’s Share) 2 years (out of OIZ)
3 years (in OIZ)
Land Allocation Available

Sectors below are able to benefit from Vat Exemption, Customs Duty Exemption, Tax Reduction, Social Security Premium Support and Land Allocation.

Sectoral Code

Investment Topics

Minimum Amount of Investment /Capacity

1911

Leather Tanning, Processing (Only in Istanbul Deri İhtisas OIZ and Tuzla OIZ)

1 million TL

2423

Medicine and Pharmaceuticals

4 million TL

2929

Industrial Patterns

4 million TL

30

Office, Accounting and IT Processing Machines

4 million TL

32

Radio, TV, Communication Equipments and Devices

4 million TL

33

Medical Devices, Sensitive and Optic Devices

1 million TL

5510.3.01

Dormitories

100 students

80 (809 Excluded)

Education (Schools, Universities)

1 million TL

8511.0.01-05

Hospitals, Nursing Home

Hospital: 1 million TL

Nursing Home: 100 persons

8511.0.99

8531.0.01-03

-

Waste Management and Recycling Facilities

1 million TL


In addition, the sectors below are applied the intensity of 5th region incentives.

  • Mining Investments
  • Railroad and maritime transportation investments
  • Test facilities, wind tunnel and similar investments
  • Tourism investments in Cultural and Touristic Preservation and Development Regions
  • International fairground investments with a minimum covered area of 50.000 m2
  • Primary, Middle and High School investments by private sector
  • Specific medical investments and Defence Industry investments with minimum investment amount of 20 Million TL
  • Investments made to produce products developed by an R&D Project which is supported by Ministry of Science, Industry and Technology

Vat Exemption, Customs Duty Exemption, Tax Reduction, Social Security Premium Support and Land Allocation are available in Regional Investment Incentive Scheme. The goals of this scheme are to improve technological and R&D capacity of regions and to provide a competitive advantage in the global arena. The listed investment topics that exceed the designated minimum amounts are eligible in Istanbul.

Incentives Instruments Istanbul (Region 1)
VAT Exemption Available
Customs Duty Exemption Available
Tax Reduction (Rate of Contribution to Investment %) 50% (out of OIZ Rate of Contribution to Investment %15)
55% (in OIZ Rate of Contribution to Investment %20)
Social Security Premium Support (Employer’s Share) 2 years (out of OIZ)
3 years (in OIZ)
Land Allocation Available


The sectors to be given incentive include the fallowings:

No Investment Topics Min. Investment Amount (Million TL)
1 Refined Petroleum Products 1.000
2 Chemical Products 200
3 Harbors and Harbor Services
4 Automotive OEM and Side Suppliers
4-a Automotive OEM Investments 200
4-b Automotive Side Suppliers Investments 50
5 Railway and Tram Locomotives and/or Railway Cars

50

6 Transit Pipe Line Transportation Services
7 Electronics
8 Medical, High Precision and Optical Equipment
9 Pharmaceuticals
10 Aircraft and Space Vehicles and/or Parts
11 Machinery (including Electrical Machines And Equipments)
12 Integrated Metal Production

There are two main goals of strategic investment incentive scheme, which are to support production of intermediate and final products with high import dependence with a view to reduce current account deficit and to encourage hightech and high value added investments with a potential of strengthening Turkey’s international competitiveness. Investments meeting four criteria below are supported within the frame of the Strategic Investment Incentive Scheme.

  • Minimum Investment Amount of TRY 50 million
  • Domestic Production of the Related Product must be less than the Importation of that Product
  • Value Added through the Investment must be at least 40%
  • Related product’s last year’s importation must exceed US $50 million level.

VAT Exemption

Available

Customs Duty Exemption

Available

Tax Reduction

%90 (Rate of the contribution to investment 50% )

Social Security Premium Support (Employer’s Share Exemption)

7 Years (Rate of the contribution to investment %15)

Land Allocation

Available

VAT Refund

The building and construction costs of investments of more than 500 Million TL

Interest Payment Support

Limited to 5% of total investment amount and with a cap of 50 Million TL