What Are Investment Incentives? Türkiye’s Support for Investors

Investment incentives are the full set of legal supports the state provides to investments meeting certain conditions, covering tax, customs, financing, land and employment costs. In Turkey, the current framework for these supports was set by Decision No. 9903 on State Aid for Investments, published in the Official Gazette of May 30, 2025. The Decision abolished the old system in place since 2012 and defined six main support elements for investments tied to an incentive certificate.

In this article, we explain the layers of the new system, each of the six support elements, the social security premium support that varies by region, and the main outline of the investment incentive certificate application. There is also a separate section for foreign investors. Our aim is not to have you memorize the legislation, but to show you where to look for the answer to each question.

What is the investment incentive system, and what changed in 2025?

The investment incentive system is the legal framework under which the Ministry of Industry and Technology provides tax, customs and financing support to investments it approves by issuing an incentive certificate. The short answer to “what is the incentive system” is this: if your investment meets certain conditions regarding subject, region and amount, you share some costs with the state through an incentive certificate. No certificate, no support.

The essence of the change is the decision on which the system is based. Decision No. 9903 repealed Council of Ministers Decision No. 2012/3305 dated June 15, 2012 and Attraction Centers Program Decision No. 2018/11201. The procedures and principles of implementation are set by Communiqué No. 2025/1, published in the Official Gazette of June 21, 2025.

Certificates obtained under the old decisions have not been discarded. According to the provisional articles of the Decision, for incentive certificates issued before the new Decision entered into force, implementation continues under the old decision on which the certificate is based. Pending old applications are also, as a rule, concluded under the decision in force on the application date; if the investor wishes, it can have its new certificate request evaluated under the new Decision.

The misconception we hear most often in practice is that “the old regional system has been abolished entirely.” In fact, provinces are still divided into six regions according to their socio-economic development, and the region determines, in particular, the duration of the social security premium support. What has changed is that the region is no longer the sole determining factor and the programs have come to the fore.

The three layers of the investment incentive system

Under Article 4 of the Decision, the investment incentive system consists of the Türkiye Century Development Initiative, the Sectoral Incentive System and regional incentives. The first two layers determine which support package the investment falls into. The third layer adds employment support to these packages based on the region in which the investment is made.

Türkiye Century Development Initiative

This layer works on a project basis and consists of three programs. The Technology Initiative Program targets investments in the products and technologies on the priority product list published by the Ministry. The Local Development Initiative Program aims to reduce development disparities between regions and is run by the General Directorate of Development Agencies. The Strategic Initiative Program covers high value-added manufacturing investments that reduce import dependence, as well as digital and green transformation investments.

In these programs, applications are reviewed on a project basis by the relevant evaluation committee. For the Strategic Initiative Program, the Decision also sets preliminary evaluation criteria: among them are that the investment subject be on the strategic initiative list, that the export-to-import coverage ratio of the main product be at most 70%, that the value-added ratio be at least 30%, and that equity equal to 20% of the investment amount be available. In other words, this layer proceeds on the basis of feasibility, not on the logic of “I applied, the certificate arrived.”

Sectoral Incentive System

The Sectoral Incentive System consists of two subsystems: the Priority Investments Incentive System and the Target Investments Incentive System. The priority investments list is long; R&D investments, mining investments, certain energy investments, rail and maritime transportation, data centers, licensed warehousing and private sector education investments are on this list. Target investments support the investment subjects listed in the annex to the Decision, under the specified conditions.

There is no machinery support in the sectoral system; this support is specific to the Türkiye Century Development Initiative programs. For some investment types, no tax reduction or interest support is granted at all. For example, under the Target Investments Incentive System, investments made in Istanbul cannot benefit from the tax reduction, and interest or profit share support is provided only to target investments in Regions 4, 5 and 6.

Regional incentives and the six regions

Regional incentives consist of social security premium supports added by region to investments supported under the first two layers. According to the list annexed to the Decision, Region 1 includes Ankara, Antalya, Bursa, Eskişehir, Istanbul, İzmir, Kocaeli and Muğla. As the level of development decreases, the region number increases and the support period becomes longer.

The 6 main support elements of investment incentives

The Decision lists six main support elements for investments under the Türkiye Century Development Initiative. The Sectoral Incentive System uses five of these six elements, excluding machinery support. Below, we summarize what each provides and the limits within which it applies.

1. Customs duty exemption

No customs duty is applied to investment goods, machinery and equipment imported under the incentive certificate. The Decision defines this as applying at 0% the customs duty rate that would otherwise apply under the Import Regime Decision. Certain machinery and equipment listed in the annex to the Decision, however, can be imported without the exemption and only included in the fixed investment amount.

2. VAT exemption

Under Value Added Tax Law No. 3065, imports and domestic deliveries of machinery and equipment made by the holder of an incentive certificate within the scope of the certificate may be exempt from VAT. Sales and leases of software and intangible rights covered by the certificate also fall under this exemption. In practice, this means not creating the VAT burden in the first place, rather than paying VAT at the start of the investment and waiting years to recover it through deduction.

VAT exemption should not be confused with a VAT refund. Under an exemption, no tax is calculated at all; with a refund, tax that has been paid or borne is claimed back later. If you are curious about the refund process, see our article What is a VAT refund and when can it be claimed .

3. Tax reduction

Tax reduction means applying personal or corporate income tax at a reduced rate to the earnings derived from the investment. Under Article 20 of the Decision, the tax is applied at a 60% reduced rate within the framework of Article 32/A of Law No. 5520. The reduction continues until the amount calculated by applying the investment contribution rate to the fixed investment amount is reached.

The investment contribution rate varies by program: 50% in the Technology Initiative and Local Development Initiative programs, 40% in the Strategic Initiative Program, 30% for priority investments and 20% for target investments. The reduced tax may also be applied to earnings the investor derives from its other activities, provided this does not exceed 50% of the investment contribution amount. Non-depreciable expenditures such as land, plots, royalties and spare parts are not eligible for this support.

4. Interest or profit share support

This support covers, from the budget, part of the interest or profit share burden of an investor using a Turkish lira investment loan with a maturity of at least one year from banks. The support applies to the portion of the loan up to 70% of the fixed investment amount in the incentive certificate and lasts at most five years from the first loan drawdown. The calculation is tied to the Central Bank of the Republic of Türkiye one-week repo auction rate on the drawdown date.

The supported share is a certain percentage of this rate depending on the program: 40%, not exceeding 20 points, in the Technology and Local Development Initiative programs; 30%, not exceeding 15 points, in the Strategic Initiative Program; and 25%, not exceeding 12.5 points, for priority investments and target investments in Regions 4, 5 and 6. The total support also cannot exceed a rate of the fixed investment amount ranging from 10% to 20% depending on the program, nor the TL cap in the Decision.

5. Machinery support

Machinery support is available only to investments under the Türkiye Century Development Initiative. 25% of the cost of machinery and equipment procured during the investment period with a unit price above the amount set in the Decision is paid to the investor from the budget. The support amount cannot exceed 15% of the fixed investment amount and the TL cap set by program.

Here you need to make a choice. The Decision does not grant interest or profit share support to an investment that benefits from machinery support, and machinery support is not provided to a Development Initiative investment that receives interest support. Which is more advantageous should be calculated based on the investment’s loan structure and the share of machinery spending.

6. Allocation of an investment site

For investments with an incentive certificate, an investment site may be allocated within the framework of Additional Article 3 of Law No. 4706, in accordance with the procedures set by the Ministry of Environment, Urbanization and Climate Change. For investments under the Development Initiative, the procedures of the General Directorate of Industrial Zones also come into play. No investment site is allocated to investments for which no tax reduction is provided or to electricity generation investments.

Which system does each support element apply in?

The table below shows, under Decision No. 9903, which incentive layer each support element belongs to. Which support an investment will actually receive is determined by the incentive certificate.

Regional incentives: employer’s share of social security premium support

The employer’s share of social security premium support covers, from the Ministry’s budget, the portion of the employer premium payable for additional employment created by the investment that corresponds to the minimum wage. Under the Decision, this support is provided in full in Region 6 and at 50% in other regions. The support applies provided that it does not exceed the employment figure in the incentive certificate for which the completion visa has been obtained.

In the sectoral system, the duration of the support varies by region. For investments under the Türkiye Century Development Initiative, the duration is 12 years in Region 6 and 8 years in all other regions.

Two details can change the duration. If the investment is made in an organized industrial zone or an industrial zone, or is in one of the districts listed in the annex to the Decision, the social security premium support is applied under the conditions of the region one level below; an investment meeting both conditions benefits from two levels lower. In Region 6, two years are added to the duration in this case.

There is one more support specific to Region 6: social security premium support. Under this support, the portion of the employee’s share of the social security premium payable for additional employment that corresponds to the minimum wage may be covered from the Ministry’s budget on behalf of the employer for 10 years after the completion visa. This is not the same as SGK incentives; these supports are tied to the investment incentive certificate.

Who receives state incentives, and under what conditions?

State incentives are granted to natural or legal person investors who obtain an incentive certificate. To obtain a certificate, the investment must comply with the subjects and conditions in the Decision, meet the minimum fixed investment amount and be found suitable in the Ministry’s sectoral, financial and technical evaluation. The minimum amount is higher in Regions 1 and 2 than in the other regions.

The TL amounts in the Decision are not fixed. They are updated by communiqué at the beginning of each year, taking into account the previous year’s revaluation rate. For this reason, we recommend checking the minimum investment amounts and support caps for the year in which you will apply in the Ministry’s current announcement.

The conditions most often overlooked at the planning stage are:

• Investment expenditures made before the incentive certificate application date are not included in the certificate.
• Intangible assets such as trademarks, licenses and know-how cannot exceed 25% of the total fixed investment amount (except for the Digital Transformation Program).
• As of January 1, 2026, issuing an e-Invoice or e-Archive invoice is mandatory for goods and services purchased domestically under the certificate.
• Investors that are not classified as SMEs and Local Development Initiative investors are required to implement an ecosystem development plan equal to at least 2% of the fixed investment amount (except for investments for which no tax reduction is provided).
• As a rule, an investment receiving support under this Decision cannot benefit from the supports of other public institutions.

The last item is especially important. If you are considering applying for both another public grant and an incentive certificate for the same investment, clarify from the outset which combination is possible. Otherwise, recovery of the supports received may come into question.

How do you apply for an investment incentive certificate?

The investment incentive certificate application is made electronically through E-TUYS (Electronic Incentive Implementation and Foreign Capital Information System), managed by the Ministry of Industry and Technology’s General Directorate of Incentive Implementation and Foreign Capital. First, authorization is obtained for the persons who will carry out transactions on E-TUYS. Then the fields in the system are completed and the required documents are uploaded.

The main outline of the process is as follows:

• The company structure and investment subject are clarified; which program or system the investment will fall into is determined.
• Application documents for E-TUYS authorization are sent to the General Directorate by registered electronic mail (KEP).
• The investment information, the list of machinery and equipment and the required documents are uploaded to E-TUYS.
• If the Ministry’s evaluation is positive, the incentive certificate is issued electronically.
• Expenditures are entered into the system throughout the investment; when the investment is complete, an application is made for the completion visa.

The documents and steps of the application process are the subject of a separate article; here we have only provided the framework. For preparing the incentive certificate, structuring the machinery list and follow-up through the completion visa, you can review our investment incentive certificate advisory service. The official source for current announcements and legislative documents is the Ministry of Industry and Technology investment incentive systems page.

Investments under the Development Initiative have one more reporting obligation. Interest or profit share support and machinery support payments are made based on an investment progress report prepared by a Sworn Financial Advisor (YMM) and submitted to the Ministry in the year following the year in which the expenditure was made. For this reason, keeping the accounting records consistent with the incentive certificate directly affects receiving the support on time.

Can foreign investors benefit from investment incentives?

Yes. A foreign-owned company established in Turkey can apply for an incentive certificate under the same conditions as domestic companies. Invest in Türkiye (the Presidency of the Republic of Türkiye Investment Office) clearly emphasizes the principle of equal treatment of foreign and domestic investors and that no distinction is made between them.

The prerequisite for benefiting from incentives is a legal entity that will make the investment. The parent company abroad generally establishes a limited liability company or joint stock company in Turkey, and the certificate is issued in the name of this company. We explained the formation steps step by step in our article how to set up a company and which documents are required .

According to the Invest in Türkiye incentive guide, 432 incentive certificates were issued to international investors in 2025; the total investment amount of these certificates was 109.5 billion TL, with projected employment of approximately 16,700 people. The figure shows that foreign investors actively use the system.

Let us add two practical notes for foreign investors. First, E-TUYS is used not only for incentive applications but also for notifications that companies and branches established in Turkey by foreign investors make to the Ministry. Second, interest support is also possible for foreign currency loans but is calculated with fewer points; the loan structure should therefore be treated as part of the investment plan.

Mistakes we often see in practice

The question our clients ask most often about investment incentives is “which incentive can I benefit from?” However, mistakes are usually made before the question, at the planning stage. We can summarize our observations as follows:

• Applying for the incentive certificate after placing the machinery order and having it invoiced. Expenditures before the application are not covered.
• Choosing between interest support and machinery support without running the numbers. The two cannot be received at the same time under the Development Initiative.
• Looking only at the region of the province where the investment is located and overlooking the OIZ or district advantage.
• Filling in the employment commitment in the incentive certificate with an unrealistic number.
• Postponing the completion visa. The employer’s share of social security premium support is applied based on the employment in the certificate for which the completion visa has been obtained.

As Akal CPA, we see incentives not as a privilege but as a right that needs to be planned. Full compliance with the legislation comes first, and legal optimization comes after; savings built the other way around come back as recovered support and late payment interest. You can find our other guides on incentives in our Investment Guide category .

Questions to ask yourself before applying

Before applying for an investment incentive certificate, you should have a clear answer to the questions below. If one of the answers is “I don’t know,” postponing the application is often less costly than obtaining an incomplete certificate.

• Does the investment subject fall under one of the Development Initiative programs, or under priority or target investments?
• Which region is the investment in, and is it in an OIZ, an industrial zone or a district listed in the annex to the Decision?
• Does the fixed investment amount meet the updated minimum amount for the application year?
• Is financing mainly loans or equity; is interest support or machinery support more meaningful?
• Is another public support being received or planned for the same investment?
• Are your accounting and e-Invoice systems set up to separate expenditures covered by the certificate?

An incentive certificate is earned at the beginning of the investment, not at the end; a properly built file is the foundation for receiving support for years.