What Is an Investment Incentive Certificate Transfer in Turkey?
An investment incentive certificate transfer is the legal process of assigning an active investment incentive certificate from one investor to another. The transfer is recorded as a title change on the existing certificate; the certificate number and scope remain the same — only the holder changes.
- Competent authority: The Ministry of Industry and Technology of the Republic of Türkiye, through the General Directorate of Incentive Implementation and Foreign Investment. All applications are filed electronically via the E-TUYS system (Electronic Incentive Application and Foreign Investment Information System).
- Legal basis: Council of Ministers Decree No. 2012/3305 on State Aid for Investments and its Implementation Communiqué.
When Is an Incentive Certificate Transfer Required?
- Mergers and acquisitions (M&A): The target company’s incentive certificate is transferred to the surviving or acquiring entity.
- Full or partial spin-offs: Under the Turkish Commercial Code, the certificate covering the spun-off portion is transferred to the new entity.
- Changes in ownership structure: If a share transfer leads to a change in the company’s title or legal type, a title update on the certificate is required.
- Strategic investor transitions: Sale of an unfinished investment to another investor while preserving incentive rights.
- Group restructuring: Consolidating an investment under the most appropriate group entity based on its activity.
Transfer Process: 6 Steps
Provided that all documents are complete, the process typically takes 2 to 6 weeks.
- Transfer resolution: The competent bodies of both the transferor and transferee pass a notarized resolution authorizing the transfer.
- Regulatory and incentive reconciliation: The certificate’s completion visa status, used incentives, and realization rate are determined.
- E-TUYS application: The transferee is authorized in the system, and the transfer application is submitted electronically.
- Ministry review: The Ministry of Industry and Technology evaluates the application and, if any incentives have been used without entitlement, may decide on clawback before approval.
- Transfer invoice and VAT: After approval, a transfer invoice is issued; if the regulatory conditions are met, VAT exemption may apply.
- Bookkeeping and continuity: The transferee records the transferred assets and continues investment monitoring through E-TUYS.
Required Documents
- Notarized transfer resolutions from both parties
- Merger or spin-off agreement (if applicable)
- Current trade registry certificate and signature circular of the transferee
- Copy of the existing investment incentive certificate
- Investment realization report and fixed-asset list
- CPA report (realization and incentive reconciliation)
- Investor undertaking (taahhütname)
Note: The exact document list varies depending on the transfer scenario. The current list available on the E-TUYS application screen should always be used as the reference.
Critical Points to Watch
- Certificates with a completion visa cannot be transferred. Transfer is only possible for active (non-completed) certificates.
- Ministry pre-approval is mandatory. Issuing a transfer invoice or executing financial transactions before approval may lead to certificate cancellation.
- Unentitled incentives can be clawed back. A full incentive reconciliation before transfer mitigates this risk.
- All obligations pass to the transferee. Completion visa, employment commitments, and minimum fixed-investment obligations become the transferee’s responsibility.
- Previously used incentives are not transferable. The transferee may only use incentives that have not yet been claimed.
- The investment period is not extended. The transfer does not change the remaining investment period stated on the certificate.
Tax Implications
| Subject | Application in a Transfer |
|---|---|
| VAT exemption | If the machinery and equipment acquired under the certificate have not yet been capitalized, VAT exemption may apply if the regulatory conditions are met. |
| Corporate income tax | Mergers and partial spin-offs structured in compliance with the Turkish Commercial Code may be carried out tax-neutral under the Corporate Income Tax Law. |
| Stamp duty | Transfer agreements may be subject to stamp duty; specific exemption scenarios should be reviewed separately. |
| Customs duty exemption | For domestic transfer of machinery imported under the certificate, customs regulations require additional review. |
Disclaimer: Tax outcomes depend on the regulations in force at the date of transfer. Obtaining a CPA opinion before the transfer is strongly recommended.
Frequently Asked Questions
Can a certificate with a completion visa be transferred?
No. Certificates for which the completion visa has been issued cannot be transferred. Transfer is only possible for active (non-completed) certificates.
Does a share transfer automatically transfer the incentive certificate?
No. The certificate is held by the company, not by its shareholders. However, if the share transfer results in a change of the company’s title or legal type, a title update on the certificate must be requested from the Ministry.
Can the transferee benefit from all incentives on the certificate?
No. The transferee can only benefit from incentives that have not yet been used. Incentives previously claimed by the transferor cannot be re-used.
Does VAT exemption apply during the transfer?
If the machinery and equipment subject to transfer were acquired under the incentive certificate and have not yet been capitalized, VAT exemption may apply if regulatory conditions are met. Each scenario must be assessed individually.
Is a partial transfer possible?
Yes. A partial transfer is possible for an independently operable portion of the investment. This typically applies in partial spin-offs under the Turkish Commercial Code and still requires Ministry approval.
How long does the transfer take?
If documentation is complete, the typical timeline from E-TUYS application to approval is 2 to 6 weeks. Complex M&A scenarios may take longer.
Can a foreign investor receive an incentive certificate transfer?
Yes. The transferee must be a Turkish legal entity, but its shareholders may be foreign individuals or companies. Foreign investors typically receive transfers through their Turkish subsidiary or branch.
What happens if the transfer application is rejected?
The certificate remains in the transferor’s name, and any unentitled incentives may be clawed back. The application can be refiled after the deficiencies are addressed.
Professional Support
Özbek CPA advises foreign investors throughout the entire incentive certificate transfer process: pre-transfer regulatory and incentive reconciliation, structuring of M&A and partial spin-off scenarios, E-TUYS application, Ministry follow-up, and post-transfer accounting and tax compliance. Contact us.
