The new Investment Incentive System, signed by President Recep Tayyip Erdoğan, was published in the Official Gazette today and has come into effect. Minister of Industry and Technology Mehmet Fatih Kacır announced the details of the system on his social media account.

Under the new system, financial support will be provided to investors. Interest and profit share support ranging from 11.5 to 18.4 points will be provided for investment loans. Incentives can reach up to 20% of the investment amount and 240 million TL. With this support, the financial burden on investors will decrease and investment appetite will increase.

More selective and focused structure

The system has a more selective and focused structure. The strongest support is provided under the “Turkey Century Development Initiative” program. The program consists of three main initiatives: Technological Initiative, Local Development Initiative, and Strategic Initiative.

High value-added investments under the Technological Initiative, four investment topics specific to each city under the Local Development Initiative, and investments aimed at improving the foreign trade balance and digital and green transformation investments under the Strategic Initiative will receive differentiated incentives.

Special support is provided for machinery

Special support is provided for machinery purchases made with own resources under the Turkey Century Development Initiative. This support is offered as a cash grant of up to 25% of the machinery cost, 15% of the investment amount, and up to 240 million TL.

The Corporate Tax reduction offered as an Investment Contribution ranges from 20% to 50% of the investment amount. Employment incentives will be implemented in six regions on a phased basis in line with the updated Socio-Economic Development Index.

Employment incentives are being offered at higher limits and for longer periods. The sixth-tier provinces, 65 districts severely affected by the earthquake, and provinces included in the Attraction Centers program will benefit from the most intensive employment incentives. In Organized Industrial Zones within these regions, the employer’s share of social security contributions for employees will be covered by the government for 14 years, and the employee’s share for 10 years.

By offering an advanced region incentive to 289 districts that are significantly less developed than provincial centers, development and prosperity will spread more quickly throughout the country. Investments that would not be efficient in sectors with excess capacity have been removed from the incentive system.

Investments to be supported under the incentive system are listed under the heading “Target Sectors.” Investments in sectors and product groups not defined in the programs will not be encouraged. The General Incentive System has been terminated.

In this context, customs duty exemptions for machinery and equipment used in investments in sectors and products not included in the incentive system have been removed. This measure protects domestic machinery manufacturers.

Investments under the Turkey Century Development Initiative are being allocated land in reserve areas established in OSBs under favorable conditions. Investments resulting from the relocation of machinery and equipment from the first region to the fourth, fifth, and sixth regions will be eligible for employment incentives in the region to which they are relocated. This will facilitate the relocation of industrial facilities, particularly from the Marmara Region to Anatolian cities.

By offering more advanced incentives applied in higher-tier provinces to investments made in OSBs and industrial zones, planned industrialization will be supported. The New Investment Incentive System will remain in effect until December 31, 2030.