Source: Official Gazette - Decree concerning
state encouragements to investments and the investment encouragement fund
Decree No: 10755; Issued: March 25th 1998 Subject and Scope Article
Decree concerning State
Encouragements to Investments - Part I
This decree aims to; encourage, support and orient investments, in-line with international commitments and in conformity with the objects of Development Plans and Annual Programs, reduce regional imbalances, diffuse the capital to a wider base, create new employment opportunities, take advantage of advanced and appropriate technologies with greater added value and to realize international competitiveness.
Within the scope of this Decree, Investment Encouragement Fund (shortly named as “Fund”) has been created. The aim of this Fund is to encourage, support and orient Small and Medium Sized Enterprises (SME’s), along with priority technological investments determined by the High Commission of Science and Technology, Research and Development (R&D), technopark and environment protection investments.Top
Section I; State Encouragements for Investment
Possible State Encouragements for investments are as follows:
- Customs tax exemption,
- Investment allowance,
- Value Added Tax (VAT) support for the purchase of machinery and equipment,
- Taxes duties and fees exemption,
- Energy support,
- Land allocation,
- Credit allocation from the fund,
Application procedures for the above mentioned state encouragements will be determined by the Undersecretariat of Treasury (shortly named as the “Undersecretariat”). Top
Regional Classification of the Encouragement Elements
As for the application of the encouragement elements the following regions have been classified;
Developed regions: Istanbul and Kocaeli provincial boundaries, along with Ankara, Izmir, Bursa, Adana, and Antalya provinces Greater Municipality boundaries.
Normal Regions: Provinces situated outside of the Developed Region and Priority Development Region classifications. Priority Development Regions: Cities which are determined as the Priority Development Regions by the Decision of the Council of Ministers.
Necessary changes to the related Articles of this Decree, resulting from works in relation to the European Community norms, in order to determine sectors subject to regional and special conditions can be realized by the Undersecretariat. Top
Investment Encouragement Certificate
In order to benefit from the elements of encouragement, it is necessary to obtain an investment encouragement certificate, for which the application principles are determined by the Undersecretariat.
In order to receive an encouragement certificate, the investment must have a minimum amount of 25 Billion Turkish Lira (TL) as fixed investment, if the investment is in the Priority Development Region, and a minimum amount of 50 Billion TL for investments in other regions.
While applying for an investment encouragement certificate in the Priority Development Region, an amount of 50 Million TL must be deposited in the Fund account at the Central Bank. The amount of deposit is 100 Million TL if the investment is to take place in Normal and Developed Regions. In regions outside of the Priority Development Region, for investments above 5 Trillion TL, the deposit amount is 300 Million TL. If the project proposal does not receive an investment encouragement certificate, the amounts deposited shall be refunded to the investor.
If a ratification of the certificate is necessary, due to the damage etc. of the investment encouragement certificate itself, a percentage of 0.2 of the total amount written on the certificate must be deposited to the Fund. The total amount to be deposited cannot exceed 50 Million TL for each certificate.
The amounts indicated in this Article can be increased by the Undersecretariat in accordance with the Tax Law No 213 and its related rules which set revaluation percentage.
The Undersecretariat can also issue an encouragement certificate for projects having a positive appraisal from the point of view of macro economic policies, along with supply and demand equilibrium and sectorial, financial and technical criterias, upon evaluation in accordance and conformity with this decree and the articles of the Communique which shall be put in force and issued following this Decree.
The amounts mentioned within this Article shall not be applied to Small and Medium Sized Enterprise (SME) investments. Top
Source: Official Gazette - Decree concerning state encouragements to investments and the investment encouragement fund Decree No: 10755; Issued: March 25th 1998
Subject and Scope