Government support for foreign investment
“Turkey's foreign investment incentive scheme”
is the mechanism used by Turkey, a country that pays close attention to foreign investment and treats it as a high priority
What is the investment incentive scheme in Turkey
It is a government scheme through which the Turkish state encourages foreign investment in Turkey using dedicated incentive instruments, dividing those incentives across specific, carefully studied regions so that the intended objectives of the scheme are met.
Aims of the scheme to encourage foreign investment in Turkey
Through its investment incentive programme Turkey pursues several aims, chief among them:
- reducing the current account deficit and working towards balance on that front
- increasing support for foreign investment in regions that receive too little of it or have yet to attract attention from foreign investors.
- raising the level of support and encouragement for foreign investment activity and expanding the means available to do so
- supporting foreign investment in technology
President Erdoğan said on the subject
Turkish President Recep Tayyip Erdoğan confirmed on Monday that his country offers substantial advantages to foreign investors looking for alternatives to the existing production network in Asia.
Erdoğan explained that the 220 billion dollars of foreign direct investment made in Turkey since 2002 shows how much confidence foreign investors place in the country.
Instruments used to encourage foreign investment in Turkey
Turkey relies on several instruments to achieve its aim of attracting foreign investment, and they are:
- Exemption from value added tax KDV
- Exemption from customs duty
- Reduced tax rates
- Support with social security premiums for investors
- Support with social security premiums for staff and workers
- Income tax withholding allowance
- Interest rate support
- Allocation of land suitable for investment
- Refund of value added tax
How Turkey's provinces are grouped under the investment incentive scheme
As mentioned, investment incentives in Turkey do not apply to every province to the same degree, which is why Turkey has grouped its provinces into 6 regions, each enjoying particular advantages for the foreign investment it can attract
Region 1
It covers the following provinces:
- Ankara
- Antalya
- Bursa
- Eskişehir
- İstanbul
- İzmir
- Kocaeli
- Muğla
Region 2
It covers the following provinces:
- Adana
- Aydın
- Bolu
- Çanakkale (excluding Bozcaada and Gökçeada)
- Denizli
- Edirne
- Isparta
- Kayseri
- Kırklareli
- Konya
- Sakarya
- Tekirdağ
- Yalova
Region 3
It covers the following provinces:
- Balıkesir
- Bilecik
- Burdur
- Gaziantep
- Karabük
- Karaman
- Manisa
- Mersin
- Samsun
- Trabzon
- Uşak
- Zonguldak
Region 4
It covers the following provinces:
- Afyonkarahisar
- Amasya
- Artvin
- Bartın
- Çorum
- Düzce
- Elazığ
- Erzincan
- Hatay
- Kastamonu
- Kırıkkale
- Kırşehir
- Kütahya
- Malatya
- Nevşehir
- Rize
- Sivas
Region 5
It covers the following provinces:
- Adıyaman
- Aksaray
- Bayburt
- Çankırı
- Erzurum
- Giresun
- Gümüşhane
- Kahramanmaraş
- Kilis
- Niğde
- Ordu
- Osmaniye
- Sinop
- Tokat
- Tunceli
- Yozgat
Region 6
It covers the following provinces:
- Ağrı
- Ardahan
- Batman
- Bingöl
- Bitlis
- Diyarbakır
- Hakkari
- Iğdır
- Kars
- Mardin
- Muş
- Siirt
- Şanlıurfa
- Şırnak
- Van
- Bozcaada and Gökçeada (in the province of Çanakkale)
Investment incentive programmes in Turkey
Investment incentives in Turkey work by identifying the investment priorities that need encouragement, and the scheme divides investment into the following categories:
- The general investment incentive programme
- The regional investment incentive programme
- The large-scale investment incentive programme
- The strategic investment incentive programme