Turkey has long offered various opportunities and incentives in order to attract foreign investors and to support local businesses in order to accelerate economic growth. In 2012, a new incentive regime was implemented with the Decision on the State Investment Incentives numbered 2012/3305 (the "Decision"). The Decision lays the foundation of the current investment incentive regime in Turkey. The Decision was later amended on 7 August 2019 with a Presidential Decree1 which introduced certain amendments to the Decision such as the annulment of the large scale investment incentive scheme. This article provides a brief overview of the current investment incentive system under the Decision.

Investment Regions

The Decision divides Turkey into six regions based on its economic growth and development level. The incentives provided in the less developed regions are more advantageous compared to the ones provided in the developed regions in order to eliminate this regional economic difference between the two and promote investment in the less developed regions.

The map of the investment regions is as follows:

Incentive Schemes

The Decision sets out general, regional and strategic investment incentive schemes as well as a separate system for certain investments in prioritised industries, all of which may benefit from both foreign and domestic investors:

  1. General Investment Incentives: Investments which are not within the scope of other incentive schemes may benefit from VAT exemptions and custom duties exemption under the general investment incentive scheme. In order to qualify for such incentives, the investment must be above a minimum value which is determined by the region and the scope of the investment which must not be among the excluded projects.
  2. Regional Investment Incentives: The incentives which are granted under regional schemes are determined based on the economic growth and potential of each region. In order to benefit from regional incentives, the investments must be within the scope of industries which are promoted in the respective region and should fulfil the criteria as for the volume and the value of investment.
  3. Incentives for Strategic Investments: Such incentives are provided for investments which are aimed towards domestically manufacturing goods that are mainly imported and reducing the imports of such goods. In order to benefit from the incentives under this scheme, the investment must have a minimum value and should fulfil certain criteria which are aimed at reducing import of goods.
  4. Incentives for Priority Investments: Investments in certain industries are classified as prioritised under the investment incentive regime. Such investment may benefit from incentives which are granted in region 5 regardless of the region in which such investments are located.2

Incentives under the Regime

The general overview of the incentives provided under each incentive scheme is as follows:


General Schemes

Regional Schemes

Strategic Investments

Priority Investments

VAT Exemption

Custom Duties Exemption

Tax Reduction

Social Security Premium Support

Income Tax Withholding Allowance3

Interest Rate or Dividend Support

Land Allocation

VAT Refund

How to Benefit from Investment Incentives

Investors wishing to benefit from such investment incentives must obtain an investment incentive certificate by applying to the Ministry of Industry and Technology. Both foreign and domestic investors are eligible for an investment incentive certificate. It is possible to apply online by registering with the E-TUYS platform.


1 Decision Amending the Decision on the State Investment Incentives numbered 1402 dated 7 August 2019

2 If the investment is located in region 6, such investment shall benefit from the incentives granted to this region instead.

3 Applicable only in region 6.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.