I. INTRODUCTION
Decision on State Aids in Investments, published in the Official Gazette No. 32915 dated 30 May 2025 (the "Decision"), establishes the practical implementation of the strategic priorities set out in the development plans. Accordingly, high value-added projects aimed at increasing production and employment have been incorporated into an integrated incentive regime providing tax exemptions, customs-duty waivers, low-interest credit facilities, machinery support, allocation of investment land and support for the employer's share of social security premiums. Ensuring that projects comply with green and digital transformation requirements, and structuring the application, evaluation and monitoring processes in a transparent and traceable manner to clarify investment roadmaps, are also among the Decision's core provisions.
Within its general framework, the Decision seeks to transcend pure economic-growth dynamics by reinforcing Türkiye's position in global production networks, reducing external dependency and enhancing the inflow of foreign direct investment. A transformation process, aligned with sustainable development plans, has been designed through measures to support local capacity in eliminating regional development disparities, increase domestic resource utilization in supply chains and promote innovation-driven production models.
II. FUNDAMENTAL PRINCIPLES
1. Which Investments Are Eligible for Incentives under the Decision?
Eligible investments and the conditions they must satisfy are set out in Annex-3 to the Decision, and as a rule, any investment not listed therein is ineligible for the incentives provided by the Decision. The only exceptions to this requirement are investments carried out under the Century of Türkiye Development Initiative, the Digital Transformation Program, the Green Transformation Program and investments in existing facilities holding an industrial registration certificate that are made to mitigate earthquake or fire risks.
For investments for which no minimum fixed-investment threshold is otherwise specified, the Decision stipulates a minimum fixed-investment amount of 12 million Turkish liras in regions 1 and 2 and 6 million Turkish liras in all other regions, as set out in Annex-2 to the Decision. Moreover, the total cost of machinery and equipment procured under financial leasing must amount to at least 3 million Turkish liras per leasing company. Any investment expenditures incurred before the date of application for the issuance of an incentive certificate are not covered by that certificate.
Additionally, under the Decision, only applications for incentive certificates submitted by 31 December 2030 will be subject to evaluation.
2. What Regulations Are Envisaged under the New Incentive Policy?
The Decision adopts three distinct incentive systems: the Century of Türkiye Development Initiative, the Sectoral Incentive System and Regional Incentives. Investments falling under the Century of Türkiye Development Initiative and Sectoral Incentive System qualify for customs-duty exemption, value-added tax exemption, tax reduction, interest and profit-share support, and allocation of investment land, while those under the Century of Türkiye Development Initiative additionally benefit from machinery support. Regional Incentives allow investments supported under the Century of Türkiye Development Initiative and Sectoral Incentive System to receive employer-share social security premium support and social security premium assistance on a regional basis.
The Green Transformation Program, one of the initiatives comprising the Century of Türkiye Development Initiative, encompasses investments that are aligned with a circular-economy approach, conserve natural resources, contribute to climate and sustainability objectives, and pursue resource-efficient, low-carbon production. Green Transformation Program projects with a minimum fixed investment of 50 million Turkish liras may benefit from incentives without undergoing the detailed evaluation procedures prescribed by the Decision.
Furthermore, the conditions prescribed for investments eligible for the above-mentioned incentives are explicitly set out in the Decision, and key considerations in this regard are as follows:
- Amounts denominated in Turkish liras under the Decision shall be updated annually, effective as of the first day of each calendar year, by applying the revaluation rate for the preceding year.
- Incentive certificate must be issued electronically via the E-TUYS system; all transactions under the certificate and supporting documents, such as customs declarations, electronic invoices or electronic archive invoices, must be submitted electronically to the Republic of Türkiye Ministry of Industry and Technology (the "Ministry").
- To ensure incentives are used proportionately to investment size, the total value of the value-added tax exemption, customs-duty exemption, tax reduction, interest or profit-share support and machinery support provided under the certificate, calculated using the revaluation rate applicable in the benefit year, must not exceed the actual fixed-investment amount.
- Transfers of incentive certificates that have not received completion visa, whether by transferring the entire investment due to a change of title or by partially dividing the certificate on account of legislative or partnership-structure changes, require approval of the General Directorate of Incentive Implementation and Foreign Investment of the Republic of Türkiye Ministry of Industry and Technology. Certificates that have received completion visa may not be transferred in whole to another investor.
- Investment must be executed in the region specified in the incentive certificate; however, if the investment is relocated to a region with lower or no support, relocation requests may be approved provided that the support amount exceeding that available in the new region and any support elements not available there are reclaimed under applicable legislation. For certificates without completion visa, if relocation is to a region that offered higher support under the legislation in force at the date of application, the supports applicable to the relocated region will apply; for certificates with completion visa, if relocation is to a region that offered higher support under the legislation in force at the date of application, approved relocation will not result in any revision of support elements. This provision applies equally to all certificates issued before its entry into force.
- The Decision details the procedure for completion periods: the investor must submit the proposed completion period to the Ministry, the authority of the Ministry to shorten this period up to a maximum of three years in case this period exceeds three years; upon expiry of the proposed period, an additional term equal to half of the original period is granted; and further extensions may be granted where justified by force majeure or delays attributable to public institutions. Failure to apply for completion visa within the prescribed period will result in cancellation of the certificate and any penalties arising from the delay will be borne by the investor, and if, at the completion visa stage, the support conditions cannot be met, incentives will be revised in accordance with the legislation in force at the date of application and any excessive support granted will be recovered pursuant to Law No. 6183 on Procedures for the Collection of Public Receivables (the "Law").
3. What Sanctions Apply for Violation of the Provisions Regulated by the Decision?
Violation of the Decision or related legislation, failure to fulfil the records and conditions set out in the incentive certificate, tampering with the certificate or its annexes, preparation or use of forged or misleading documents, submission of false information, sale of machinery and equipment before the prescribed period or causing such sale, or failure to complete the investment and ecosystem development plan within the prescribed timeframe and minimum amounts will result in immediate cancellation of the incentive certificate. Where cancellation is not applicable, but obligations are only partially met, the relevant incentives will be recovered proportionally to the breach under the Law. All amounts to be collected pursuant to these procedures and cancellation decisions will be determined in accordance with the Law. In addition, incentives granted for machinery and equipment acquired through financial leasing may be recovered, in whole or in part, from the financial leasing companies.
4. What Procedure Will Be Followed for Pending Incentive Applications and Existing Incentive Certificate?
The Decision repeals the Decision on State Aids in Investments No. 2012/3305 dated 15/06/2012 and the Decision on Support for Investments within the Scope of the Incentive Program for Attractive Investment Areas No. 2018/11201 dated 02/01/2018. However, incentive applications pending as of the date of publication of the Decision will continue to be finalised in accordance with the legislation in force at the date of application; at the investor's request, such applications may instead be evaluated under the provisions of the Decision.
With respect to incentive certificates issued prior to the entry into force of the Decision, the former decisions and related legislation forming the basis of those certificates shall continue to apply in full. Accordingly, machinery and equipment acquired under the previous schemes may not be transferred under the Decision, except in cases of legislative amendments or division into independent production units due to changes in shareholding structure, where transfer may be permitted on condition that any excess incentives provided are repaid. Furthermore, no additions of machinery or equipment that would increase capacity may be made to certificates issued under earlier decisions, which fall outside the scope of the Decision and for which a completion visa has not yet been granted.
5. Under Which Circumstances May Investors Benefiting from the Incentives in the Decision Also Access Additional Support Measures for the Same Investment?
Investments that have benefited from support by other public institutions shall not be permitted to apply to the Ministry for incentives under the Decision; any breach of this provision will result in the recovery of the Decision's incentives. Investments that benefit only from subsidized credit support or other support related to the credit used within the scope of the investment from other public institutions and organizations will be able to benefit from other support elements within the scope of the Decision, provided that the credit in question is not provided with interest or profit share support and machinery support regulated in the Decision; this exception also applies to documents issued pursuant to previous decisions that have not been subject to completion visa. Moreover, investments approved for support under the Technology Initiative Program may receive direct support from KOSGEB and/or TÜBİTAK in accordance with their enabling legislation, and such support from these bodies and other public institutions may be regarded as contributing to the integrity of the investment covered by the incentive certificate.
III. CONCLUSION
The restructured incentive regime integrates tax, customs and financing facilitation with digitization, thereby enabling production- and employment-oriented growth strategies to be implemented on a foundation of transparency and traceability. This holistic approach, which safeguards regional and sectoral balances within the framework of innovation and sustainability principles, serves as a catalyst—enhancing Türkiye's international investment appeal and competitiveness while nurturing local development dynamics.
The full text of the Decision can be accessed here.
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.
