Investment Incentives

The Investment Support Office, operating within the Istanbul Development Agency, offers investment support services to domestic and foreign investors who want to invest in Istanbul. In this context, investors are informed about investment opportunities and opportunities offered by the city. Investment Support Office provides information to all stakeholders about financial and technical support programs of many institutions, including IDA, TUBITAK, EU Horizon 2020 and KOSGEB. In addition to these, activities are organized to bring together the stakeholders in entrepreneurship ecosystem together. In this context, best practices are shared and different initiatives are assembled to form cooperation networks. In this section, detailed information about the supports of various institutions is provided.

Horizon 2020

Horizon 2020 is the biggest EU Research and Innovation programme ever with nearly €80 billion of funding available over 7 years (2014 to 2020) – in addition to the private investment that this money will attract. It promises more breakthroughs, discoveries and world-firsts by taking great ideas from the lab to the market.

https://ec.europa.eu/programmes/horizon2020/

Ministry of Industry and Technology

Ministry of Industry and Technology

1. San-Tez

Industrial Thesis (SAN-TEZ) Program is a support mechanism that aims at enabling our SMEs, which constitute a significant part of our industry, to gain R&D and innovation culture and to acquire the habit of solving their problems in cooperation with the university by using their accumulated knowledge.

Scope	Commercialization of information in the universities by the private sector To enable SMEs to acquire R&D and innovation culture and to acquire the habit of solving their problems collaboratively by using the knowledge accumulated in the university.
Applicants	Businesses
Support Limits	Up to 85% for micro scale firms up to 80% for small scale firms Up to 75% for medium sized firms Up to 65% for large scale firms
Submission date	Project applications are received continuously throughout the year. Project proposal submitted in electronic environment.
More information	https://biltek.sanayi.gov.tr/sayfalar/santezdetay.aspx

2. Techo-Investment Programme

Technological Product Investment Support Programme (Techno-Investment) supports such in order to make the country’s economy competitive at international level;

Technological products resulted from R&D and innovation projects for the foundations established by law for public institutions and organizations in Turkey or abroad or the industry supported by international funds,
Technological products emerging as a result of R&D and innovation projects initiated and concluded in the Technology Development Zones
Serial production of the technological products that have a patent and emerged as a result of R&D activities carried out by using equities by domestic firms.

Scope	Products to be produced for the first time in preferential technology areas
Applicants	Businesses
Support Limits	For small business 40% for imported goods, 50% for domestic purchases (Upper limit 5 million TL) 30% for imports and 40% for domestic purchases for medium sized enterprises (Upper limit 4 million TL) For large enterprises, 10% for imports, 20% for domestic purchases (Upper limit 2 million TL)
Submission date	Call for Proposals
More information	https://teknoyatirim.sanayi.gov.tr/Home/Index

3. R&D and Design Center

This programme aims to increase the product quality and standard, to increase the productivity, to decrease the production costs, to commercialize the technological knowledge, to increase the product quality and standard, to increase the product quality and standard, to commercialize the technological knowledge, to promote the development of pre-competition cooperation, technology-intensive production, entrepreneurship and investment in these fields, and to accelerate the entry of foreign direct investment in R&D and innovation and to increase the employment of R&D personnel and qualified labor force.

Scope	To contribute to the development of R & D and Innovation capacity of enterprises and the institutionalization of this capacity
Applicants	Businesses
Support Limits	Various Exemptions (R & D reduction / Income tax withholding incentive / Insurance premium support / Stamp tax exemption)
Submission date	Project applications are received continuously throughout the year. Project proposal submitted in electronic environment.
More information	https://agtm.sanayi.gov.tr/Home/Index

4. Clustering

Clustering programme aims at; increasing the competitiveness, innovation and productivity of the Turkish industry, having a greater share in global exports, having produced mainly high-tech products and having qualified workforce and simultaneously transforming it into an environmentally friendly and collective industry structure.

Scope	To provide clustering coordination and motivation of enterprises, to develop the market, to increase productivity and to produce innovation
Applicants	Businesses and nonprofit organizations
Support Limits	Maximum 25 Million TL for 5 years or 50% of budget
Submission date	Call for Proposals.
More information	https://kumelenme.sanayi.gov.tr/Default.aspx

5. Technology Development Zones

Technology Development Zones are academic, social and cultural sites that enable entrepreneurs, researchers and academicians, who wish to produce goods and services in new or advanced technologies, to conduct their industrial and commercial activities nearby the universities while benefitting from them.

Scope	To contribute to the establishment of academic, social and cultural sites that enable entrepreneurs, researchers and academicians, who wish to produce goods and services in new or advanced technologies, to conduct their industrial and commercial activities nearby the universities while benefitting from them.
Applicants	Businesses
Support Limits	Various Exemptions [Institutions-Income Tax No Limit / Social Security Premium (SSP) Support for Employer's Share 50%]
Submission date	Throughout the Year
More information	https://teknopark.sanayi.gov.tr/Home/Index

6. Pre-Competition Cooperation

This programme promotes the collaboration and cooperation of the businesses in order to bring together their resources based on material, technology and information.

Scope	Collaboration and cooperation in well-defined activities for the development of new technology by more than one business
Applicants	Businesses
Support Limits	Various Exemptions [36+6]
Submission date	Throughout the Year
More information	https://rip.sanayi.gov.tr/

Ministry of Treasury and Finance

New Incentive System The new incentive system, which entered into force with the Decision of the Cabinet dated 15.06.2012 and numbered 2012/3305, consists of 4 different applications:

General Investment Incentive Scheme
Regional Investment Incentive Scheme
Large Scale Investments Incentive Scheme
Strategic Investments Incentive Scheme

Supports	Regional Scheme	Large Scale Scheme	Strategic Scheme	General Scheme
VAT Exemption	x	x	x	x
Customs Duty Exemption	x	x	x	x
Tax Deduction	x	x	x
SSP Support (Employer’s Share)*	x	x	x
Income Tax Withholding Support**	x	x	x	x
SSP Support (Employee’s Share) **	x	x	x
Interest Rate Support **	x		x
Land Allocation	x	x	x
VAT Refund****			x

* SSP: Social Security Premium ** Provided that the investment is made in Region 6. *** Provided that the investment is made in Regions 3, 4, 5 or 6 within the frame of the Regional Investment Incentive Scheme **** For strategic investments with a minimum fixed investment amount of 500 million TL.
Investment Incentive Schemes According to Regional Development Level Regional and Large Scale Investment Incentive Schemes of the new program provide support to investments in different provinces at varying rates and terms according to regional and provincial development levels. Both schemes grant different amounts of support according to the regional map identifying 6 different regions.

Regions in the Investment Incentive Program

Within the scope of the new Investment Incentives Program, all provinces in Turkey have been grouped into 6 regions according to the level of economic and social development as indicated by the 2011 socio-economic development index of the Ministry of Development. Investment Incentive Schemes based on regional development level offer the most advantageous rates and terms to Region 6 and less advantageous ones to Region 5, 4, 3, 2 and 1 respectively.

* excluding Bozcaada and Gökçeada

General Investment Incentive scheme supports all investments fulfilling conditions on specific level of capacity and minimum fixed investment amounts regardless of the regions. The minimum fixed investment amount is 1 million TL in Region 1 and 2 and 500 thousand TL in the remaining 4 regions. Regional Investment Incentives in each province, the industries to be supported through incentives are determined based on the competitive potential of that specific province. There is a minimum fixed investment amount for each industry and region. While the lowest amount in Regions 1 and 2 is 1 million TL, in the remaining 4 regions it is 500 thousand TL. The minimum fixed investment amount for Large Scale Investments is defined in different sizes according to the sector starting from 50 Million TL. The minimum fixed investment amount for Strategic Investments is 50 Million TL.

Vat Exemption, Customs Duty Exemption, Tax Reduction, Social Security Premium Support and Land Allocation are available in Regional Investment Incentive Scheme. Regional system aims to eliminate inter-regional imbalances by means of encouraging pre-determined sectors. Therefore, investment topics to be supported have been identified by taking into consideration of the economic potentials of each province and economies of scale. Through the new regime, 81 provinces of Turkey are classified under 6 investment regions. Istanbul, which is the most developed region of Turkey, is classified in the 1st degree regional list.

Incentives Instruments	Istanbul Region(Region 1)
VAT Exemption	Available
Customs Duty Exemption	Available
Tax Reduction (Rate of Contribution to Investment %)	50% (out of OIZ Rate of Contribution to Investment %15) 55% (in OIZ Rate of Contribution to Investment %20)
Social Security Premium Support (Employer’s Share)	2 years (out of OIZ) 3 years (in OIZ)
Land Allocation	Available

Sectors below are able to benefit from Vat Exemption, Customs Duty Exemption, Tax Reduction, Social Security Premium Support and Land Allocation.

Sectoral Code	Investment Topics	Minimum Amount of Investment /Capacity
1911	Leather Tanning, Processing (Only in Istanbul Deri İhtisas OIZ and Tuzla OIZ	1 million TL
2423	Medicine and Pharmaceuticals	4 million TL
2929	Industrial Patterns	4 million TL
30	Office, Accounting and IT Processing Machines	4 million TL
32	Radio, TV, Communication Equipments and Devices	4 million TL
33	Medical Devices, Sensitive and Optic Devices	1 million TL
5510.3.01	Dormitories	100 students
80 (809 Excluded)	Education (Schools, Universities)	1 million TL
8511.0.01-05	Hospitals, Nursing Home	Hospital: 1 million TL Nursing Home: 100 persons
8511.0.99
8531.0.01-03
-	Waste Management and Recycling Facilities	1 million TL

In addition, the sectors below are applied the intensity of 5th region incentives.

Mining Investments
Railroad and maritime transportation investments
Test facilities, wind tunnel and similar investments
Tourism investments in Cultural and Touristic Preservation and Development Regions
International fairground investments with a minimum covered area of 50.000 m2
Primary, Middle and High School investments by private sector
Specific medical investments and Defense Industry investments with minimum investment amount of 20 Million TL
Investments made to produce products developed by an R&D Project which is supported by Ministry of Science, Industry and Technology

Large Scale Investments Incentive Scheme Vat Exemption, Customs Duty Exemption, Tax Reduction, Social Security Premium Support and Land Allocation are available in Regional Investment Incentive Scheme. The goals of this scheme are to improve technological and R&D capacity of regions and to provide a competitive advantage in the global arena.

Within the context of the Implementation of Regional or Large-Scale Investment Promotion, the investments to be provided with sub region supports in terms of tax reduction and Social Security Premium (SSP) Support Employer’s Share are as follows:

Investments to be made in OIZs,

Integration investments based on sectoral cooperation of firms operating in the same field

Strategic Investments Incentive Scheme

There are two main goals of strategic investment incentive scheme, which are to support production of intermediate and final products with high import dependence with a view to reduce current account deficit and to encourage hightech and high value added investments with a potential of strengthening Turkey’s international competitiveness. Investments meeting four criteria below are supported within the frame of the Strategic Investment Incentive Scheme.

Minimum Investment Amount of TRY 50 million
Domestic Production of the Related Product must be less than the Importation of that Product
Value Added through the Investment must be at least 40%
Related product’s last year’s importation must exceed US $50 million level.

In this context, the support rates and duration provided for Istanbul are summarized as follows: