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The New Incentive System

Having been promulgated in the official gazette no 27302 dated 28 July 2009,  the new incentive communiqué has gone in effect.
The firms that have benefited from the Incentive Law no 5084 can pass over to the new incentive system and begin utilizing it. Besides, Turkish Statistical Institute will rearrange the incentive regions by revising the development levels of cities at the end of 2010. The Eastern and Southern eastern cities have been emphasized in the new Incentive System where 81 cities have been divided into 4 categories, and the 4th region considered to be the favourable< category includes Trabzon, Giresun, Ordu, Rize and Artvin.
The objectives of the new incentive system are as follows:

  • To decrease differences between regional development levels.
  • To support large scale investments with a great potential of technology and R&D that will develop competitiveness.
  • To support sectoral clustering.
  • To highlight the economic scales concerning the investment areas to support.
  • The incentive tools of the new system in the 4th region including Trabzon are as follows:

  • Tax Reduction: If the investment commences till 31.12.2010, 90 % of reduction will be made on corporate law until the content ratio of 60 % on the the investments is reached. If the investment commences after 31.12.2010, 80 % of reduction will be made on corporate law until 25 % content ratio on the investments is reached.
  • SSI (Social Security Institution) employer’s premium: After the investment is completed, the insurance premium amounting to MINIMUM WAGE of the employer’s share that needs to be paid for employment will be paid by the Treasury for 7 years. This premium is added to the NUMBER OF WORKERS indicated in the document of monthly premium and services presented to the Provincial Directorate of Social Security in 6 months before the start of the investment.
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  • Support for Interest: 5 points of interest for TL and 2 points of interest for the foreign exchange will be applied for the loans with a due date of at least one year that will be used for the investments benefiting from the incentive.  
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  • Customs duty exemption: Customs duty exemption will be applied under certain circumstances when purchasing equipments from abroad.
  • VAT Exemption: Vat exemption will be applied when purchasing machinery and equipments considered to be appropriate within the scope of the incentive system.
  • Great invetsments will be supported in the new system no matter where they will be made.  12 sectors that require high technology and that are chosen from the regions having a high level of foreign trade deficit within the scope of project investments as well as the minimal investment opportunities are mentioned as follows:

    1. Production of chemicals: Investments of minimum 1 billion TL for “the production of basic chemicals”. Investments of minimum 300 million TL for “the production of other chemicals”
    2. Production of refined petroleum products: Investments of minimum 1 billion TL. Hence, the costs of projects of new refined products will decrease.
    3. Transport services through transit pipelines.
    4. Production of motor land vehicles: Investments on automotive of minimum 250 million TL.
    5. Production of locomotifs of railway and tramways and/or wagons. Investments of minimum 50 million TL.
    6. Harbor and services of harbor. Investments of minimum 250 million TL.
    7. Investments on electronic industrial products: Investments on the production of LCD/plasma of minimum 1 billion TL. Investments on the production of module panels of minimum 150 million TL. Investments on laser TVs, three dimensional TVs, OLED and similar TVs. Investments on other electronic sectors of minimum 50 million TL ( including information and communication instruments)
    8. Production of medical instruments, sensitive and optical equipments: Investments of minimum 50 million TL.
    9. Production of medicine: Investments on the production of medicine of 100 million TL and more.
    10. Production of air and space vehicles: Investments of 50 million TL for product diversification and extension.
    11.  Investments on the production of machinery : Investments of more than 50 million TL.
    12.  Investments on mining

    The sectors to be supported in TR90 Region including Trabzon and minimal amounts of investments are set as in the following:

      Investments on mining and quarrying

      Minimum 500 thousand TL except for 1st group metals, stone chips, and royalty mining.

      Production of food products and drinks

      Minimum 1 Milion TL
      Investments on integrated animal husbandry
      300 cattle in the milk dairying integrated facilities including integrated breeding investments, 500 cattle in the cattle breeding integrated facilities, 1000 ovine in ovine integrated facilities for milk and meat production, 200.000 units in the integrated facilities of quadripennate.
      Producing water products:
      Minimum 500 thousand TL
       Production of textile products
      Minimum 15 million TL for the investments on textile finishing and minimum 500 thousand TL for other investments on textile.
       Production of clothes
      Minimum 500 thousand TL
      Production of suitcases, handbags, accessories, shoes etc.
      Minimum 500 thousand TL
      Smart multi-functional technical textile
      Minimum 500 thousand TL
      Production of plates such as flooring parquet, covering, plywood, and chip board, particle board etc.
      Minimum 2 million TL
      Production of paper and paper products
      Facilities of integrated paper production that will start from the production of cellulaze
      Production of non-metalic mineral products
      Minimum 500 thousand TL for lime, plasterwork, prefabricated structures of cement, beton, and artificial stone.
      Revolvers, guns and other wepaons
      Minimum 500 thousand TLRadyo, televizyon, haberleşme teçhizatı ve cihazları imalatı.
      Production of radio, television, communication tools and equipments
      Minimum 2 million TL
      Production of  medical instruments, sensitive and optical instruments
      Minimum 2 million TL except for watches
       Production of furniture
      Minimum 2 million TL except for those manufactured from metal and plastic
      Hotels
      Minimum 3 stars and more
      Student dormitories
      Minimum 100 students
      Services of cold air reservoirs
      Minimum 500 square meters
      Licenced warehousing
      Minimum 1 million TL
       Training services
      Minimum 500 thousand TL except for adult training and other training activities
       Investments on hospitals and nursing homes
      Nursing homes for at least 100 people