Introduction
Turkey offers a wide range of state-backed benefits through the Investment Incentives in Turkey programme to attract both domestic and international investors. These incentives are designed to support strategic sectors, promote high-tech production, reduce regional inequalities, and accelerate economic development. This guide outlines the structure of Turkey’s investment incentive system as of 2025, including available schemes, regional benefits, sector-specific advantages, and simulation examples.
1. Overview of Investment Incentives in Turkey System
Investment Incentives in Turkey are structured around two main dimensions:
– Regional Development Level: Turkey is divided into six regions, where Region 1 includes the most developed provinces and Region 6 the least. Higher incentives are granted in less developed regions.
– Product and Sector Focus: Medium-high and high-tech product investments, regardless of location, are eligible for increased benefits. Certain projects may also qualify for strategic or project-based support.
2. Types of Investment Incentives in Turkey
2.1 General Investment Incentives:
Applicable to all investors meeting the minimum fixed investment threshold, regardless of region or sector.
– VAT Exemption for machinery and equipment
– Customs Duty Exemption
2.2 Regional Investment Incentives:
Encourages balanced growth across regions.
– Corporate Tax Reduction (rates vary by region)
– Social Security Premium Support (Employer’s share)
– Interest Rate Support
– Land Allocation
2.3 Strategic Investment Incentives:
Granted for large-scale projects that reduce foreign dependency.
– Minimum investment: TRY 50 million
– The domestic production capacity of the product must be lower than imports
– Includes VAT and Customs exemptions, tax reduction, premium support, and interest support
2.4 Project-Based Incentives:
Tailored for specific, high-impact investments approved by the government.
– Minimum investment: TRY 2 billion (~USD 57 million)
– Offers all standard incentives plus additional supports such as:
– Energy Support
– Qualified Personnel Support
– Infrastructure Support
– Purchasing Guarantees
3. Additional Incentive Programs
3.1 Technology-Oriented Industry Move (HAMLE):
Supports high value-added and tech-intensive domestic production.
– Based on calls announced by the Ministry
– Offers strategic or project-based incentives
3.2 High Tech Investment Program (HIT-30):
Specialized support for select high-tech sectors like semiconductors, mobility, green energy, and health technologies.
3.3 R&D and Design Center Incentives:
– 100% R&D deduction from corporate tax base
– 50% employer’s social security contribution support
– Stamp duty and customs exemptions
– Wage support for researchers in basic sciences
3.4 Technology Development Zones (TDZs):
For companies engaged in R&D, design, and software development within designated zones.
– Corporate tax and VAT exemptions
– 50% support for employer’s social security contributions
3.5 Free Trade Zone Incentives:
Encourages export-focused manufacturing and service activities.
– VAT, Customs Duty, and Corporate Tax exemptions
– Income tax exemption on salaries for export-driven companies
4. Investment Simulations (Examples)
Simulations show how much an investor can benefit from incentives depending on project type and location:
– General Investment: TRY 100M investment may get ~17% in total support.
– Region 3 Investment: Same investment can reach ~59.5% support.
– Medium-High Tech Investment (Region 4): Support may increase to ~67.1%.
– Priority Sector Investment (Region 5): Can reach up to 80% support.
– Region 6 Investment (Inside OIZ): Maximum support up to 129.4%.
– Strategic Investment (All Regions): Support rate ~93.4%.
5. Key Terms & Incentive Glossary
– VAT Exemption: No VAT on eligible machinery or construction expenses
– Corporate Tax Reduction: Reduced rates up to 100%; support linked to investment amount
– Social Security Premium Support: Government covers employer’s (and sometimes employee’s) share
– Interest Rate Support: Government pays part of interest on TRY or FX loans
– Qualified Personnel Support: Wage support for specialists in strategic sectors
– Energy Support: Up to 50% of energy expenses covered (Project-based)
Conclusion
The ecosystem of Investment Incentives in Turkey is both extensive and adaptable. Whether your business is in manufacturing, high-tech, R&D, or export-focused production, there are multiple tools available to reduce costs and accelerate returns. For customized guidance, investors are advised to consult with professional advisors who can assist in navigating the incentive application and compliance processes.Feel free to contact us for customised support on Investment Incentives in Turkey.