New Government Facilities to Attract More Foreign Investment
The Republic of Turkey offers a comprehensive investment incentive program that supports the minimization of costs and acceleration of investment returns for investment projects of foreigners who will both invest from scratch and want to expand their business.
The Turkish Government offers excellent opportunities to attract foreign investors to Turkey. Many incentives are offered by the government for foreigners to invest in Turkey. Thanks to these incentives, foreign investors can easily establish a company in Turkey and operate more efficiently and profitably.
Government incentives that foreign investors can benefit from in Turkey:
- VAT Exemption
The Turkish Government does not collect VAT (value-added tax) from foreign investors for the expenditures to be made for materials, machinery, and equipment to be purchased within the scope of investment incentives.
- Customs Duty Exemption
Within the scope of investment incentives, customs duty is not collected for expenditures to be made for materials, machinery, and equipment to be purchased from abroad from foreign investors.
- Corporate Tax Deduction
Foreign investors pay corporate tax at a discount.
- Social Security Premium Support (Employer's Share)
The employer's share of the social insurance premium calculated for the employment provided by foreign investors is covered by the state.
- Social Security Premium Support (Employee Share)
The employee share of the social security premium calculated over the legal minimum wage for employment provided by foreign investors is covered by the state.
- Income Tax Withholding Support
Income tax determined for employment is not included in the stoppage. There is no upper limit for income tax stoppage deduction. In this context, the income tax determined for employment is not paid.
- Interest Rate Support
A certain part of the interest rate to be paid for the loan drawn by foreign investors for investment is covered by the state.
- Land Allocation
Within the scope of investments to be made with foreign capital, investment land is allocated depending on the land availability within the framework of the procedures and principles determined by the Ministry of Environment and Urbanization.
- VAT Refund
VAT refund is provided for building and construction expenditures made for investments with foreign capital.
- Property Tax Exemption
Property tax is not paid by foreign investors for the land and building they will use for their workplace.
- Infrastructure Support
Foreign investors' infrastructure needs such as electricity and natural gas can be met by the state.
- Energy Support
A portion of the energy expenditures paid by the foreign investor is repaid.
- Capital Contribution
Capital contributions of up to 49% of the investment amount to foreign investors can be made by the state.
- Purchase Guarantee
Public procurement guarantee can be given for the products to be produced within the scope of the investment to be made.
- Ease in Permit-Certification License Processes
With the decision of the President, exceptions may be made for permits, allocations, certification, licenses, and registrations, and other restrictive provisions, or arrangements may be made in legal and administrative processes to accelerate and facilitate investments.
- Qualified Personnel Support
The gross wages of qualified personnel that can be employed by foreign investors are covered by the state for up to 5 years.
- Grant Support
After the expenditures are made, the appropriate expenditures are paid by the supporting institution.
- Educational Support
Daily expenses and eligible training costs are covered by ISKUR.
- R&D/Design Discount
All R&D and design expenditures can be deducted from the corporate tax base.
- Stamp Tax Exemption
Foreign investors do not pay stamp tax for documents.
- Special Consumption Tax Exemption
Businesses located in free zones are exempted from special consumption tax by the state.
Investment Zones in Turkey
There are three types of investment regions in Turkey.
Technology Development Zones – Technoparks
Technology Development Zones (TDZ) are areas designed to attract investments in high technology and support R&D studies. Today, there are 84 TDZs, 63 of which are in operation and 21 of which are under construction.
Advantages of Technology Development Zones;
- Earnings from software development, R&D, and design activities are exempt from income and corporate tax until 31 December 2023.
- Sales of application software such as system management, data management, business applications, and software used in military housing systems produced within the TDZ are exempt from VAT until 31 December 2023.
- The wages of R&D design and support personnel working in the region are exempt from any tax until 31 December 2023. The number of support personnel within the scope of exemption cannot exceed 10% of the number of R&D personnel.
- The investment required for the production of the technological product obtained as a result of R&D projects can be made within the region, provided that the Ministry of Industry and Technology approves the operator and the company.
50% of the employer's share of SSI premium is covered by the state until 31 December 2023.
- Products to be imported within the scope of R&D, design, and software development projects are exempt from customs duty, and documents to be issued are exempt from stamp duty.
Organized Industrial Zones
Investors operating in Organized Industrial Zones (OIZs) can benefit from many incentives. There are a total of 331 OIZs, 234 of which are active, in 80 provinces.
Advantages of Organized Industrial Zones;
- VAT exemption is provided for land purchases.
- Property tax exemption is provided for 5 years, effective immediately after the completion of the facility construction
- Discount on expenses such as natural gas, water, and communication
- Tax exemption in cases such as dividing and combining parcels
- Local government tax exemption in facility construction and operation
- Businesses that do not benefit from municipal services are exempted from solid waste tax.
Free Zones are special areas located outside the scope of customs zones, although they are located within the political borders of Turkey. Free Zones are designed to increase the number of export-oriented investments. Administrative and legal regulations applied in commercial, economic, and financial areas in customs zones are partially implemented or not applied at all in Free Zones. There are a total of 19 Free Zones in Turkey close to the EU and Middle East markets.
Advantages of Free Zones;
- Businesses located in Free Zones are 100% exempt from customs duty and other taxes of the same type.
- Manufacturing companies located in Free Zones are 100% exempt from corporate tax
- Businesses located in Free Zones are 100% exempt from VAT (Value Added Tax) and SCT (Special Consumption Tax)
- Documents issued by businesses in Free Zones are 100% exempt from stamp tax
- 100% income and corporate tax exemption is provided for certain logistics services (provided that all of them are abroad) from Free Zones
- Businesses located in Free Zones are 100% exempt from income tax on employee wages
- Goods can be held in free zones without a time limit
- Businesses located in Free Zones can freely transfer the profits obtained from the free zones abroad or to Turkey without any restrictions
- Businesses located in Free Zones are exempt from title deed fees in purchasing and selling property
- Businesses in Free Zones are exempt from VAT in construction, project, residence, permit, and approval processes
- Businesses located in Free Zones are exempt from VAT and other taxes
- It is allowed to bring second-hand (used) machinery to enterprises located in Free Zones
Diyar Turk Real Estate, with its experienced and professional sales team, offers the most suitable investment options in Turkey for your needs and enables you to make a profitable investment. Enables you to make the most appropriate investment in the right region with its expert real estate consultants. Diyar Turk Real Estate is always ready to help with its pre-sales and after-sales services.
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