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The Investment Incentives Mechanism in Türkiye Overview

Türkiye has established a comprehensive investment incentive system designed to attract both domestic and foreign investments, reduce regional disparities, promote high-tech and value-added production, and create employment opportunities.
This framework is primarily overseen by the Presidency of the Republic of Türkiye Investment Office and the Ministry of Industry and Technology.

Main Types of Investment Incentive Programs

1. General Investment Incentives Program

  • Open to all investments meeting a minimum fixed investment threshold.

  • Key Supports:

    • VAT exemption

    • Customs duty exemption
       

2. Regional Investment Incentives Program

  • Türkiye is divided into six regions, with Region 1 being the most developed and Region 6 the least.

  • More generous incentives are provided to investments in less developed regions.

  • Supports include:

    • VAT and customs duty exemptions

    • Tax reductions

    • Social security premium support (employer’s share paid by the state)

    • Land allocation

    • Interest rate support (available only for investments in Regions 3–6)
       

3. Priority Investment Incentives Program

  • Designed for specific priority sectors (e.g., defense, pharmaceuticals, energy, R&D).

  • Offers Region 5 level incentives even for investments located in more developed areas (Regions 1 and 2).

  • Sectors are prioritized irrespective of geographic location.
     

4. Strategic Investment Incentives Program

  • Focused on investments that reduce Türkiye’s dependency on imported intermediate goods.

  • Requirements:

    • High minimum fixed investment amount

    • Potential to significantly reduce imports

  • Full range of supports provided:

    • VAT and customs duty exemptions

    • Tax reductions

    • Social security premium support

    • Land allocation

    • Interest rate support

    • VAT refund for construction investments above certain thresholds
       

5. Project-Based Investment Incentives Program

  • Tailored for large-scale, high-tech, and transformational projects.

  • Customized support packages can include:

    • Energy support

    • Infrastructure support

    • Direct grant (cash) support

    • Facilitated licensing and permitting processes
       

Key Incentive Tools

  • VAT Exemption: No VAT on imported or locally purchased machinery and equipment.

  • Customs Duty Exemption: No customs tax on imported machinery and equipment.

  • Tax Reduction: Lower corporate tax rates for supported investments.

  • Social Security Premium Support: Government covers employer’s share of social security premiums.

  • Interest Rate Support: Subsidized loan interest rates for investment financing.

  • Land Allocation: Access to government-owned land for qualifying investments.

  • VAT Refund: Available for strategic construction investments exceeding set thresholds.

  • Grant Support: Direct financial support for selected project expenses under the Project-Based Program.


Priority Sectors for Investment in Türkiye Türkiye particularly encourages investments in:

  • High-technology industries (electronics, defense, pharmaceuticals)

  • Renewable energy

  • Automotive and mobility technologies

  • Chemical industry

  • Food processing

  • Tourism development

  • Data centers and R&D activities

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