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NEW INCENTIVE SYSTEM

THE INVESTMENT INCENTIVE PROGRAM OF TURKEY IN KARAMAN

The new investment incentives scheme is specifically designed to encourage investments with the potential to reduce dependency on the importation of intermediate goods vital to the country’s strategic sectors.

Amongst the primary objectives of the new investment incentives scheme are;

  • to reduce the current account deficit;

  • boost investment support to lesser developed regions;

  • increase the level of support instruments;

  • promote clustering activities,

  • to support investments that will create the transfer of technology.

In order to further accelerate investment decisions, the new investment incentives system grants more advantageous supports for investments to be initiated by the end of 2014. Spending at least 10 percent of the investment amount will suffice for the investment to be considered as started.

Investments are supported through 4 different incentive schemes. 7 different support instruments will be applied in Karaman. Local and foreign investors have equal access to all incentive schemes.

In addition to General, Regional and Large Scale Investment Incentive Schemes, the Strategic Investment Incentive Scheme is put into effect as a new and unique feature.


THE INVESTMENT INCENTIVE PROGRAM AND DEVELOPMENT AGENCIES

The Ministry of Economy, Directorate of Incentive Implementation and Foreign Investment is responsible for the implementation and coordination of investment incentive program at the national level.

Regional Development Agencies (RDAs) are entitled to issue General Incentive Certificates provided that investment costs per project do not exceed TRY 10 million. In addition, if given by Ministry of Economy, Development Agencies could make document closing process.

RDAs are also commissioned to monitor and report the progress of incentivized investments.

Karaman Investment Support Office of Mevlana Development Agency gives information for the investors about investment incentive system and prepares documents in regional level.


SUPPORT MEASURES AND SCHEMES OF THE INVESTMENT INCENTIVES PROGRAM


Supports

General Scheme

Regional Scheme

Large Scale Scheme

Strategic Scheme

VAT Exemption

Customs Duty Exemption

Tax Deduction

 

SSP* Support (Employer’s share)

 

Interest Rate Support

 


 

Land Allocation

 

VAT Refund**

 

 

 

* SSP: Social Security Premium

** For strategic investments with a minimum fixed investment amount of TRY 500 Million.

SUPPORT INSTRUMENTS

Value Added Tax (VAT) Exemption: Investment machinery and equipment imported and/or locally provided within the scope of the incentive certificate will be VAT exempt.

Customs Duty Exemption: Investment machinery and equipment imported within the scope of the incentive certificate will be customs duty exempt.

Tax Deduction: The investor’s income will be taxed at reduced rates until the total value reaches the amount calculated on the basis of government’s contribution rate determined for that specific investment.

Social Security Premium (SSP) Support (Employer’s Share): The Ministry of Economy will assume the costs associated with the social security premium, to be paid by the Employer for the new staff, in the amount corresponding to the legal minimum wage.

Interest Rate Support: This support will be available for investment loans which were borrowed to finance the investment with a term of at least one year and which shall not exceed 70% of the fixed investment amount registered on the certificate. The Ministry of Economy will pay a portion of the interest/profit share of the loan up to certain maximum limits.

Land Allocation: Government land will be allocated for the investments with incentive certificate under large scale, strategic and regional incentive schemes in accordance with the rules and principles defined by the Ministry of Finance, depending on availability of such land at the locations referred by the investor.

VAT Refund: VAT collected on the building and construction expenses made for the strategic investments will be rebated provided that the fixed investment amount is over TRY 500 million for the Strategic Investments.

A-GENERAL INVESTMENT INCENTIVE SCHEME

Regardless of the region where investment takes place, all projects meeting both the specific capacity conditions and the minimum fixed investment amount are supported within the framework of the General Investment Incentives Scheme. Some types of investments are excluded from the investment incentives system and would not benefit from this scheme.

The minimum fixed investment amount is TRY 1 million in Karaman.

Major investment incentive instruments are:

  • Value Added Tax (VAT) Exemption

  • Customs Duty Exemption

B-REGIONAL INVESTMENT INCENTIVE SCHEME

Within the scope of the new Investment Incentives Program, all provinces in Turkey have been grouped into 6 regions. According to this system, Karaman is in the 3nd region.

The sectors to be supported in each region are determined in accordance with regional potential and the scale of the local economy. The minimum fixed investment amount is defined separately for each sector and region.


REGIONAL INCENTIVES MAP

  

The Ministry of Economy Regional Investment Incentives



Strategic and Large Scale Investment Incentives



Terms to Apply Regional Incentives