Turkey Unveils Comprehensive Investment Incentives: A Golden Opportunity for Global Investors

An important announcement from the Turkish government on May 30, 2025, marks a significant stride towards boosting the nation's economy and attracting high-value investments. Published in the Official Gazette, the "Decision on State Aid for Investments" (Karar Sayısı: 9903) introduces a comprehensive framework designed to incentivize production, increase employment, reduce external dependencies, and accelerate green and digital transformation across various sectors. This initiative presents a compelling opportunity for both domestic and international investors looking to expand their footprint in a dynamic market.

Key Pillars of Turkey's New Incentive Program

The newly unveiled incentive system is structured around two primary pillars: the Türkiye Yüzyılı Kalkınma Hamlesi (Turkey Century Development Initiative) and the Sektörel Teşvik Sistemi (Sectoral Incentive System), complemented by regional incentives.

1. Turkey Century Development Initiative This overarching initiative is divided into three key programs:

• Technology Initiative Program: Focuses on investments in priority product lists and advanced technologies.
• Local Development Initiative Program: Aims to diminish regional disparities and enhance competitiveness by supporting investments tailored to local socio-economic conditions and potential.
• Strategic Initiative Program: Targets high value-added manufacturing, R&D-intensive projects, and investments contributing to the nation's critical needs, supply security, and international competitiveness. This includes projects under the Digital Transformation and Green Transformation Programs, with minimum fixed investment thresholds of TL 100 million for high-tech products and TL 200 million for other investments.

Investments under this initiative can benefit from a wide array of support, including customs duty exemption, VAT exemption, tax reductions, interest or profit share support, machine support, and investment location allocation.

2. Sectoral Incentive System This system encompasses two distinct schemes:

• Priority Investments Incentive System: Supports a broad spectrum of critical sectors, including digital and green transformation projects, high-tech product manufacturing (especially those exceeding TL 500 million), defense industry initiatives, renewable energy production for self-consumption, mining, R&D activities, data centers, transportation, tourism accommodation, education, elderly care facilities, licensed warehousing, automated greenhouses, and disaster-related investments.

• Target Investments Incentive System: Provides support to specific investment topics outlined in Annex-3 of the decision.

These sectoral investments are eligible for customs duty exemption, VAT exemption, tax reduction, interest or profit share support, and investment location allocation.

3. Regional Incentives Complementing the broader programs, regional incentives provide additional support, such as social security premium employer's share support across all regions and specific social security premium support for investments in Region 6.

Significant Support Elements for Investors

The new decision offers tangible financial and operational benefits for eligible investments:

• Customs Duty Exemption: Imports of machinery and equipment vital for investment projects are exempt from customs duties.
• VAT Exemption: Investors will benefit from VAT exemption on imported and domestically supplied machinery, equipment, software, and intangible rights.
• Interest/Profit Share Support: The government will cover a portion of interest or profit share payments for Turkish Lira-denominated investment loans. The support can cover up to 70% of the fixed investment amount, with varying percentages and maximum limits based on the program (e.g., up to TL 240 million for Technology and Local Development Programs).

• Machine Support: For investments under the Turkey Century Development Initiative, 25% of the cost of eligible machinery and equipment (unit price exceeding TL 2 million) can be covered, up to a maximum of TL 240 million for Technology and Local Development Programs.

Investment Requirements and Application Process

To qualify for these incentives, investments generally need to align with specific topics, and meet minimum fixed investment thresholds (e.g., TL 12 million for Regions 1 & 2, and TL 6 million for other regions). Applications for incentive certificates will be accepted until December 31, 2030, highlighting a significant window of opportunity for investors.

How SAS Can Help

Navigating the complexities of government incentive programs requires specialized expertise. At SAS (Strategic Advisory Services), we specialize in providing unparalleled government relations consulting. Our services are designed to help investors fully leverage these new opportunities by:

• Expert Guidance: Deciphering the intricate details of the "Decision on State Aid for Investments" to identify the most relevant programs and benefits for your specific investment plans.
• Application Facilitation: Assisting with the meticulous preparation and submission of incentive certificate applications, ensuring all conditions and requirements are met.
• Strategic Compliance: Providing ongoing support to ensure compliance with all regulations and reporting requirements throughout the investment lifecycle.
• Tailored Solutions: Developing customized strategies that align your investment goals with the government's priorities, maximizing your eligibility and securing the maximum possible support.

Partner with SAS to transform these new incentives into tangible growth for your investments in Turkey. Visit us at Strategic Advisory Services to learn more about how we can empower your success.

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