Recent Developments
Important amendments were made to the investment incentives legislation through
- The “Presidential Decree No. 1402 Amending the Decision on Subsidies in Investments” (“Decree No. 1402“) and
- The “Presidential Decree No. 1403 Amending the Decision on Supporting Investments on a Project Basis” (“Decree No. 1403“),
both published in the Official Gazette No. 30855 dated 7 August 2019.
The major amendments made to the investment incentives legislation through these Decrees are explained below.
What’s New?
a) Amendments on the Decision on Subsidies in Investments
- The Decision on Subsidies in Investments comprised general, regional, large-scale and strategic investment incentive schemes. The Decree No. 1402 abolished the “large-scale investment incentive scheme”.
- The Decree No. 1402 introduced the “Technology Focused Industry Move Program”. The Technology Focused Industry Move Program refers to a support program aiming to incentivize investments related to products listed in the Priority Products List. The Ministry of Industry and Technology will determine the support program’s principles and procedures. The Ministry of Industry and Technology will publish the Priority Products List, and will include products in the medium-high and high technology sectors and products that are critical for the development of these sectors. The Ministry of Industry and Technology will prepare this list by taking into consideration several criteria such as foreign trade data, demand development, and competition.
- The Program Evaluation Committee will evaluate applications for the Technology Focused Industry Move Program and may decide that certain investment projects will be incentivized within the scope of “strategic investments”. These investment products must concern the manufacturing of products in the Priority Products List within the scope of the Technology Focused Industry Move Program and comply with the criteria set forth by a future communiqué. The Program Evaluation Committee will determine which incentives will be granted to these investment projects. The conditions for the strategic investments are not applicable these investment projects.
- Investments supported by the Technology Focused Industry Move Program will also be eligible for KOSGEB and/TUBITAK incentives.
b) Amendment on the Decision on Supporting Investments on a Project Basis
- The Decision on Supporting Investments on a Project Basis provides incentives for investment subjects determined by the Ministry of Industry and Technology. The Ministry of Industry and Technology determines these investment subjects by considering criteria such as whether it addresses Turkey’s current and prospective critical needs; develops technological capacity in areas where a technological gap exists; and furnishes a high added value. In order for investor firms to make an incentive application within this scope, the Ministry of Industry and Technology should first identify an investment area and convoke one or more companies or make an announcement of the investment area. Before the Decree No. 1403, investments projects with the minimum fixed investment amount of USD 100 million were eligible for the incentives within this scope.
- According to the Decree No. 1403, the Decision on Supporting Investments on a Project Basis will also include the Technology Focused Industry Move Program and the minimum investment amount required is amended.
- Accordingly, in order for the investment projects to be included within the scope of this Decision, a minimum fixed investment amount of TRY 50 million is required for investments falling within the scope of the Technology Focused Industry Move Program for the manufacturing of the products in the Priority Products List, and TRY 500 million for other investment projects.
- The Technology Focused Industry Move Program will be carried out through the announcements that will be conducted by the Ministry of Industry and Technology.
- The Program Evaluation Committee will evaluate and prioritize the incentive applications through the criteria such as market saturation and support need. The Program Evaluation Committee may decide to support the prioritized projects within the scope of the announcement budget and other restrictions.
