State Incentives Offered to Foreign Investors in Turkey

Turkey offers some excellent opportunities for attracting foreign investors. Turkey, offers encouragement for foreigners who wants to make investments in the Turkey. Thanks to these encouragements, investors can action more fertilized and profitable.

Now, let us look at the encouragements for foreigners can benefit from.

VAT Exemption

VAT (value added tax) is not paid for machinery and equipment to be purchased domestically and abroad within the scope of the investment incentive certificate.

Customs Duty Exemption

Customs duty is not paid for machinery and equipment to be purchased from abroad within the scope of the investment incentive certificate.

Tax Offer

Income and corporate tax is the total amount of tax offered, calculated at the proposed rates until the investment contribution rate reaches. Investment contribution rate refers to the tax deductible rate of the total fixed investment amount.

Social Insurance Premium Support (Employer Lot)

Social insurance premium employer lot is paid by government which calculated from legal minimum wage for the providing deploy by the investment. This element only valid State 6 investments within the scope of the investment incentive certificate. Social insurance premium doesn’t have maximum limit and has validity for 10 years.

Social Insurance Premium Support (Hirer Lot)

Social insurance premium hirer lot is paid by government which calculated from legal minimum wage for the providing deploy by the investment.

Income Tax Stoppage Offer

The determined income is not liable to stoppage tax for the providing extra deploy by the investment. These element only valid state 6 investments. Income Tax Stoppage Offer doesn’t have maximum limit and has validity for 10 years.

Interest Rate Support

A certain part of the interest / dividend to be paid for the loan used up to 70% of the fixed investment amount registered in the investment incentive certificate is paid by the state for the first five years at most.

Land Allocate

Investment land is allocated for the investments to be made, depending on the availability of land according to the regulations of the Ministry of Finance.

VAT Refund

Paid VAT is refund back while spending for the building-construction expenses minimum investment amount is more than (500 Million ₺) scope of the strategic investments

Ar-Ge Encouragement

Turkey, the R & D center at least 15 in at least 10 staff employed at the design center offers special incentives for R & D and design projects in Turkey.

  • 100% of R&D expenses are deducted from the tax base.
  • Stamp tax is not paid on documents to be issued.
  • Customs duty is not paid for products imported within the scope of R&D projects.

Investment Regions and Incentives to be Applied

There are four type of incentive for the new incentive system which entered into force date of 1 January 2012. These types of incentives also differ for 6 different investment regions across the country.

  1. General Investment Encouragement Practices
  2. Regional Investment Encouragement Practices
  3. Large Scale Investment Encouragement Practices
  4. Strategic Investment Encouragement Practices

There are 6 different regions in these applications of investments. The encouragements are differ according to the region to be invested.

1. General Investment Encouragement Practices

Regardless of region and nationality, Turkey offer encouragements which mentioned below for the investment 1 million₺ or 500.000₺.

Customs Duty Exemption

Regardless of nationality, they do not pay customs duty for machinery and equipment imported from abroad.

VAT Exemption

Domestic and foreign investors do not pay VAT for the equipments, machinery which bought from abroad or domestic market.

2-Regional Investment Encouragement Practices

Incentives are offered to domestic or foreign investors. The incentives are differ for their chosen regions in determined 6 areas in Turkey. Regardless of region, investors are exemption from customs duty and VAT. The government allocates land to investors to set up a production facility.

Apart from these, they provide social security premium support to employers and hirers at varying rates. Especially in the 6.Region east of the Turkey need to investments. So, there are special incentives who want to make investment in the 6.Region. For example, the investors get income stoppage tax offer for 10 years who make investment in the 6.Region. This way, the investor receives a 90% tax cut.

Also, regardless of region there are some investments areas supports with 5.region elements. The examples:

  • Mine Hoisting and/or Process Investments
  • Automotive, Test Centers for Space and Defense Industry, Wind Tunnel and Similar Investments.
  • Turbine and Generator Manufacturing for Renewable Energy Generating
  • Kindergarten, Day Care Centre, Primary School, Secondary School and High School Education Investments.

Again, regardless of region these are some of investments benefit from 4.region incentives.

  • Manufacture Farming and Wood Machines
  • Food, Beverage and Tobacco Processing Machinery Manufacturing
  • Other Organic Main Chemical Materials Manufacturing
  • Chemical Fertilizer and Nitrogen Compound Manufacturing
  • Manufacture of Synthetic Rubber and Plastic Raw Materials

3.Large Scale Investment Encouragement Practices

Turkey technology, large-scale investment stimulus plan for its competitiveness in the international market and R & D capacity will increase 12 investment areas are implemented and providing the following incentives.

4.Strategic Investment Encouragement Practices

Investments that meet the criteria below are supported within the scope of the Strategic Investment Incentives Practices.

  • The local production capacity for the product to be manufactured by investment should be less than the import of the product.
  • The investment must be worth at least 50 million TL.
  • The investment should create at least 40% added value. This requirement is not required for refinery and petrochemical investments.
  • The total import value of the product to be produced should be at least 50 million US dollars as of the last 1 year. This condition is not required in non-production goods in Turkey.
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Jeanne Brochard
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A ibn Z
A ibn Z
07:13 26 Apr 21
Hello there, very informative site.I have a question: My son will be 18 years next year, if I buy a property and get... the citizenship , can he study Medicine in Turkey free of charge as a Turkish citizen. If I am divorced do I need my ex wife's consent to get for all of my children Turkish citizenship? I am Australian.Also can you help with enrolment to an English Medium University? I heard he must learn Turkish to be able to study in Turkey.read more
moo Et
moo Et
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Hello. Thank you for help and support and answering our questions. it is the second time that I ask a question because... I forgot the previous time. If someone want to apply for Short Term Resident Permit but the expiry date of Passport does not allow for one year, then is it possible to apply for shorter period like ten months and 120 days outside of Turkey rule still exist or not? Thank you againread more
Moh Eti
Moh Eti
06:38 06 Jan 21
Thank you very much for answering my first question. I forgot to ask the other question that I had. If my mother... passport does not allow her to apply for short term resident permit for a year because of expiry date of her passport can she apply for ten months instead of one year? I also heard that 120 days outside of country rule is not apply anymore.read more
Cobb Cobb
Cobb Cobb
07:20 27 Nov 20
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Anum Omair
Anum Omair
11:53 13 Nov 20
Hello, We are planing to apply for residence permit in turkey by investing in property, I have a question that my... husband will be the principal applicant (owner of property ) stays in abroad for 6 months in an year as he is a business person and he has to look after his business but on the other hand we (wife and 2kids) will stay in turkey and follow the protocol to get citizenship in 5 years period.1. will my husband be able to apply for citizenship of all 4 of us as the main applicant? if not?2. will I and my kids will be eligible to get citizenship, if we are eligible, will I be able to apply for his citizenship based on my citizenship status?Or what do you suggest that we should done as the aim is to get the citizenship in 5 years period for the entire family.An expert opinion will be highly appreciatedThanksread more
Khurum Khan
Khurum Khan
13:27 09 Nov 20
I gained lots of knowledge with help of this web site it is very informative.I have some questions plz answer .1 -... What is the minimum house price to buy in order to get a residency permit?2 - we are a family of three me 46 year old my son aged 22 and daughter aged 19 . can we by one house or 3 houses to get property residency permit for all of us ?3 - How many month a person to stay in turkey per year for qualify a Turkish passport because my both adult children are studying medicine in Georgia .4 - How many years will the three of us have to wait to get citizenship?read more
Emad Babaei
Emad Babaei
12:18 23 Oct 20
HelloIm from Iran ( I have Iranian Passport ) but I live in Budapest. I would like to study in Turkey. Do I have to... get a student visa from Turkish embassy before going to Turkey or can I just go to Turkey and register at my course and then apply for Student residence permit ?May I also ask how long does it take to get an appointment at the immigration office and then how long does it take to receive the Student residence permit ?Thank you very much for your helpBest regardsread more
Tommy Ade
Tommy Ade
00:06 14 Oct 20
Hello,I am a Nigerian citizen, and I would like to apply for the tourist residence permit. I read that in Antalya the... residence permit is provided in a month or less sometimes.1. Is it possible to apply for the residence permit in Antalya and then move to Istanbul after receiving the residence permit?2. In that case, will my application be accepted if I have a rental contract for just 1 month as I plan on moving to Istanbul and rent another apartment there?3. During the time my application will be processing, can I open a bank account, deposit money in it, and make transactions?I would appreciate if you could shed some light on these matters.Warm regards,read more
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