The Directorate General of Incentive Implementation and Foreign Investment of Turkey supports the investment projects to be carried out in Turkey by domestic or foreign-capitalized firms by three major investment packages: The Investment Incentive System, Center of Attraction Program, and the Movement Program. There are various support elements for investment incentives including but not limited with VAT Exemption, Customs Duty Exemption, Tax Deductions, Income Tax Withholding Support, and Support for the Employer's National Insurance Supports.
The Investment Incentive System
The Investment Incentive System is divided into four subtitles; Regional Incentives, Privileged Incentives, Strategic Incentives, and General Incentives. For the Regional Incentive System, the minimum investment amount starts from 500K Turkish Liras, and this amount differs for each sector, and region. For the Strategic Incentive System; the minimum investment amount is 50M Turkish Liras. For the General Incentive System; the minimum investment amount is 1M Turkish Liras for the Areas of I and II; 500K Turkish Liras for the Areas of III, IV, V, and VI; which are stated below:
The General Incentives are applied to investments which meet the minimum amount criterias, and which are not in the scopes of other incentive programs. The Regional Incentive System aims to close the gap between the cities in terms of development levels, and to improve the export potentials. Whereas, the Privileged Incentive System applies to various areas including but not limited with the following sectors: medicine, manufacturing of the machines for office, accounting, or data processing, manufacturing of the radio, television, and communication systems, manufacturing of the air and spacecrafts, manufacturing of medical instruments, manufacturing of watches with precision and optical instruments.
It was stated that the minimum investment amount was 50M Turkish Liras in order to enjoy the Strategic Incentive System; however, besides the amount of investment, there are three other criteria in order for an investment to be regarded as Strategic: the main generating capacity cannot be lower than the imports, accretion value shall be at least 40%, and the total amount of importation shall exceed 50M USD in the last year. However, investments can also be regarded as strategic by the Ministry as per the Technology Focused Industry Support Program; even if they do not meet the criteria mentioned above.
The Center of Attraction Program
This program aims to improve the manufacture, employment, and export in the relatively under-developed regions by enhancing the investment environments. In order to be qualified for this incentive; an investment shall be located in at least one of the predetermined cities; shall at least employ 200 people for call centers, or, for data centers, it shall take space at least 5000 meters of white-space. Furthermore, the minimum amount of investment differs for each city in the event of manufacturing industry investments.
The Movement Program
This incentive program is for determining and manufacturing the products which are used in the mid-high and high-technological sectors and are critical for the development of these sectors. In the determination of these products, various criteria are taken into account; such as, the foreign trade data, the development of demand, and the intensity of competition. Furthermore, this is an integrated program which is intended not only for the financial support, but also for research & development support.