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Regional Investment Incentives Scheme

 

The sectors to be supported in each region are determined in accordance with regional potential and the scale of the local economy, while the intensity of supports varies depending on the level of development in the regions.

The minimum fixed investment amount is defined separately for each sector and region with the lowest amount being TRY 1 million in Region 1 and 2, and TRY 500,000 in the remaining regions.

The terms and rates of supports provided within the Regional Investment Incentives Scheme are shown in the following table.

 

Regional Investment Incentives Scheme Instruments

Incentive Instruments

Region

I

II

III

IV

V

VI

VAT Exemption

YES

Customs Duty Exemption

YES

Tax Reduction

Tax Reduction Rate (%)

50

55

60

70

80

90

Reduced Tax Rate (%)

10

9

8

6

4

2

Rate of Contribution to Investment (%)

Out of OIZ*

15

20

25

30

40

50

Within OIZ*

20

25

30

40

50

55

Social Security

Premium Support (Employer’s Share)

Support Period

Out of OIZ*

2 years

3 years

5 years

6 years

7 years

10 years

Within OIZ*

3 years

5 years

6 years

7 years

10 years

12 years

Upper Limit for Support (%)

Out of OIZ*

10

15

20

25

35

No limit

Within OIZ*

15

20

25

35

No limit

No limit

Land Allocation

YES

Interest Rate Support

TRY Denominated Loans (points)

N/A

N/A

3 points

4

points

5

points

7 points

FX Loans (points)

1

point

1

point

2

points

2 points

Social Security

Premium Support (Employee’s Share)

N/A

N/A

N/A

N/A

N/A

10 years

Income Tax Withholding Allowance

N/A

N/A

N/A

N/A

N/A

10 years

 

*OIZ: Organized Industrial Zones

 

Contribution Rate to Investment Applicable During Investment / Operating Periods Under Regional Investment Incentives Scheme

Regions

Investment Period

Operating Period

I

0 %

100 %

II

10 %

90 %

III

20 %

80 %

IV

30 %

70 %

V

50 %

50 %

VI

80 %

20 %

 

The new investment incentives system defines certain investment areas as “priority” and offers them the regional supports extended to Region 5 by the Regional Investment Incentives Scheme regardless of the region of the investment. If priority investments are made in Region 6, the regional incentives available for this particular region shall apply.

 

Investment areas with specific priorities to be supported by means of Region 5 instruments regardless of the investment’s region are:

 

  • Tourism accommodation investments to be made in the Culture and Tourism Conservation and Development Regions determined by the Council of Ministers

  • The main extraction and processing investments
  • Railroad and maritime freight or passenger transportation investments

  • Specific pharmaceutical, defense, and aerospace industry investments with a minimum fixed investment amount of TRY 20 million

  • Test facilities, wind tunnel, and similar investments made for the automotive, aerospace and defense industries
  • Preschool, primary, secondary, and high school investments made by the private sector

  • International trade fair investments with a minimum indoor area of 50,000 square meters

  • Investments made in order to produce products developed by an R&D project that is supported by the Ministry of Science, Industry and Technology, TUBITAK and KOSGEB

  • Investments in the motor vehicles main industry amounting to TRY 300 million, engine investments worth a minimum amount of TRY 75 million, and investments for motor engine parts, transmission components/parts and automotive electronics worth a minimum amount of TRY 20 million

  • Investments for power generation where metals stated in the 4-b group of the Article 2 of the current Mining Law No. 3213 in scope of a valid mining license and permit issued by the Ministry of Energy and Natural Resources are used as inputs

 



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