Foreign Investment Incentives in Turkey: Tax, Land and Subsidies

Scope note. This guide describes the general investment incentive regime under Presidential Decision No. 9903 and the implementing Communiqué No. 2025/1, and the treatment of foreign investors under the Foreign Direct Investment Law No. 4875. It does not cover project-based state aid, free zones, technology development zones, R&D centres, export supports or sector-specific schemes. This guide does not quote current monetary thresholds; these must be checked for the relevant application date. Eligibility and support are governed by the applicable legislation and the conditions recorded in the project’s incentive certificate.

Equal treatment of foreign investors

Under the Foreign Direct Investment Law No. 4875 (adopted 5 June 2003, Official Gazette 17 June 2003, No. 25141), foreign investors are free to make direct investments in Turkey and are subject to equal treatment with domestic investors, unless international agreements or special laws provide otherwise (Art. 3/a). For the purposes of Law No. 4875, a foreign investor is a person making a direct foreign investment in Turkey who falls within the categories listed in Article 2(a): a foreign national, a Turkish citizen resident abroad, a legal entity established under foreign law, or an international organisation. Direct foreign investments may not be expropriated or nationalised except for a public purpose and against compensation (Art. 3/b), and net profits, dividends, sale and liquidation proceeds, compensation, licence and management fees and foreign loan principal and interest may be freely transferred abroad through banks (Art. 3/c). Disputes arising from private-law investment contracts, and investment disputes under public-service concession contracts with the administration, may be referred to national or international arbitration or other dispute resolution methods where the statutory conditions are met and the parties agree (Art. 3/e). The incentive regime described below is therefore available to foreign-owned Turkish companies and, under the Communiqué, to Turkish branches of foreign companies, on the same basis as domestic investors.

The incentive framework: Presidential Decision No. 9903

Investment incentives are governed by the Decision on State Aid for Investments put into force by Presidential Decision No. 9903 of 29 May 2025 (Official Gazette 30 May 2025, No. 32915). The Decision repealed the 2012 incentive decision (Council of Ministers Decision No. 2012/3305) and the 2018 Attraction Centres Programme decision (Art. 34). Its provisions entered into force on publication, except for paragraphs 11 to 14 of Article 5, which entered into force on 1 January 2026 (Art. 35). Applications pending at the entry into force are concluded under the rules in force on the application date, although an applicant may ask for a new certificate to be assessed under the new Decision (Transitional Art. 1). Certificates issued under earlier decisions generally continue under those decisions and other applicable decisions, subject to provisions expressly extended to earlier certificates (Transitional Art. 2). Applications for incentive certificates under the Decision may be made until 31 December 2030 (Art. 5/5).

The system has three layers (Art. 4): the “Türkiye Century Development Move” (Türkiye Yüzyılı Kalkınma Hamlesi), consisting of the Technology Move, Local Development Move and Strategic Move programmes (Arts. 6–8); the Sectoral Incentive System, consisting of the Priority Investments and Target Investments incentive systems (Arts. 9–10); and regional incentives, which are added for investments supported under either of the first two layers according to the investment’s region. For regional application the provinces are divided into six regions by socio-economic development level (Art. 3 and Annex 2). Digital Transformation and Green Transformation programmes are also provided for (Arts. 11–12).

Support elements

Investments supported under the Türkiye Century Development Move may benefit from customs duty exemption, VAT exemption, tax reduction, interest or profit-share support, machinery support and investment land allocation; investments under the Sectoral Incentive System may benefit from the same elements except machinery support (Art. 4/2–3). In addition, regional incentives provide employer’s social security premium support and, for investments in Region 6, employee premium support (Art. 4/4). The elements actually available to a project are those recorded in its incentive certificate, subject to the statutory conditions.

Customs duty exemption may apply to eligible investment machinery and equipment covered by the incentive certificate. Machinery and equipment listed in Annex 4 may be included in the fixed investment amount but do not receive this exemption (Art. 13(1)–(2)).
VAT exemption is among the support elements listed in Article 4 and is subject to its statutory scope and conditions (Art. 14).
Tax reduction. Income or corporate tax relief depends on Article 32/A of Law No. 5520 and Article 20 of Decision No. 9903, including their applicable time limits, transitional rules and investment contribution limits. The certificate does not by itself establish the tax amount that can be used in a particular period. Article 20(3) excludes specified expenditure and investment categories, including land, royalties, spare parts and other non-depreciable expenditure, finance and insurance institutions, joint ventures classified as iş ortaklıkları under Turkish corporate tax law, the projects specified under Laws Nos. 4283 and 3996, and investments carried out under mining royalty agreements (rödovans).
Interest or profit-share support is subject to a request, Ministry approval and the limits in Article 15. For eligible Turkish-lira investment loans with a maturity of at least one year, the supported loan portion cannot exceed 70% of the fixed investment recorded in the certificate. Support may run for no more than five years from first use of the loan, subject to programme-specific amount and rate caps. If the relevant Central Bank repo rate at a payment date is lower than the rate at loan use, the lower rate is used. Other financing arrangements have separate conditions under Article 15.
Machinery support under the Türkiye Century Development Move requires eligible machinery to be procured during the certificate’s investment period. Article 16 provides support on qualifying machinery costs, subject to the applicable unit-price threshold and programme ceilings; other costs do not count towards the unit-price threshold. These Turkish-lira thresholds and ceilings must be checked for the relevant application date. An investment receiving machinery support cannot also receive interest or profit-share support.
Employer’s social security premium support is subject to completion approval and the employment recorded in the certificate. For eligible employment, it covers the portion of the employer premium corresponding to the minimum wage, in full in Region 6 and at 50% in other eligible regions. Under the general schedule in Article 18(2), the duration is one year in Region 2, two years in Region 3, four years in Region 4, eight years in Region 5 and twelve years in Region 6; that schedule provides no ordinary support period for Region 1. Separate programme and location rules can change this result: Türkiye Century Development Move investments have an eight-year period outside Region 6 and a twelve-year period in Region 6. Article 22 improves the employer-premium conditions by one region where either the organised industrial/industry zone condition or the listed-district condition is met, and by two regions where both are met; in Region 6 the applicable duration is extended by two years. Sectoral-system investments that must span several provinces because of their nature do not receive either premium support under Article 18(4). Employee-premium support in Region 6 is limited to qualifying additional employment and the statutory filing and payment conditions (Art. 19).
Investment land allocation. Investment land may be allocated under Additional Article 3 of Law No. 4706 and the procedures set by the Ministry of Environment, Urbanisation and Climate Change. For Türkiye Century Development Move investments, Article 21(2) also provides for allocation under procedures set by the General Directorate of Industrial Zones. Land allocation is unavailable for investments without tax reduction and for electricity generation investments (Art. 21(3)).

Eligibility conditions

Investments must concern the investment subjects listed in Annex 3 and meet the conditions set for them, except for investments supported under the Türkiye Century Development Move, the Digital and Green Transformation programmes and certain priority investments (Art. 5/1). Minimum fixed investment requirements depend on the investment subject and region. The Turkish-lira amounts in Decision No. 9903 and its annexes are updated annually under Article 5(10) and Article 27 of Communiqué No. 2025/1. Check the Ministry’s amount applicable to the application date, including any separate threshold for machinery obtained through finance leasing. Support ceilings applicable on the application date are not revalued for the certificate issued on that application (Communiqué Art. 24(5)). Support is available only where the project is found appropriate in sectoral, financial and technical assessments and an incentive certificate is issued (Art. 5/4). Investment expenditure incurred before the application date is not covered by the certificate (Art. 5/6 and Communiqué Art. 9). Intangible assets such as trademarks, licences and know-how may not exceed 25% of the total fixed investment recorded in the certificate, except under the Digital Transformation programme (Art. 5/8). An investor outside the SME category, or an investor supported under the Local Development Move, must implement a Ministry-approved ecosystem development plan under Article 5(9), unless the investment is not granted tax reduction. The required investment and expenditure under the plan must be completed by the investment completion approval and must amount to at least 2% of the fixed investment.

How the incentive certificate is obtained

Procedures are set by Communiqué No. 2025/1 of the Ministry of Industry and Technology (Official Gazette 21 June 2025, No. 32933); an amending Communiqué No. 2026/1 was published in the Official Gazette of 9 April 2026, No. 33219. Real persons, joint ventures, companies, cooperatives, associations, foundations, public bodies and Turkish branches of foreign companies may apply, through an authorised user, electronically via the Ministry’s system (Communiqué Art. 5/1); applications on behalf of entities whose establishment is not yet completed are not evaluated (Art. 5/2). All certificate transactions are carried out through the Electronic Incentive Implementation and Foreign Capital Information System, E-TUYS (Art. 6). Required uploads include the social security premium debt status, the environmental decision where required, the workplace opening and operating licence where applicable, other permits and, for investments of TRY 1 billion or more, a feasibility report; documents must be retained for 10 years from the application date (Art. 7). Applications with missing or contradictory information are not evaluated, and missing items must be completed within 30 days of the notice unless another period is set (Art. 8). The certificate lists the investment’s characteristics and the support elements available if the investment is carried out as specified; it does not replace permits required under other legislation (Art. 4).

Investment period, completion approval and changes

The investment start date is the date of application to the Ministry (Decision Art. 29/1). The investor proposes the period needed to complete the investment; the Ministry may reduce a proposed period longer than three years to three years, and if the investment is not completed in time an extension of up to half of the initial period may be granted, with further time possible where permits could not be obtained or force majeure is documented (Art. 29/2–3). Investment completion approval (tamamlama vizesi) is the administrative confirmation of the investment’s completion. Under Article 29(6), the ordinary route involves an on-site examination; the General Directorate may also accept a sworn-in certified public accountant’s (YMM) report for investments it considers appropriate. The documents and report format required for the particular investment must be checked before the completion application. Apply for completion approval within three months after the investment period or its extension ends. If no application is filed, the Ministry issues a notice; failure to apply within two months after that notice leads to cancellation under Article 29(5). Changes to recorded values or to the investment subject require a revision application, while changes in the investor’s title, tax office or contact details are updated in E-TUYS (Communiqué Arts. 21–22). Transfer of a certificated investment, and the sale or leasing of fixed assets, are subject to the conditions in Decision Arts. 25–27.

Supervision, sanctions and clawback

The Ministry may audit compliance with the certificate conditions and request additional information, documents and opinions; during audits the investor must allow examination of all documents and on-site inspection (Decision Art. 31). Certificates are cancelled where the investor breaches the Decision or other legislation, fails to meet the certificate conditions, falsifies documents, gives false or misleading information, sells machinery before the prescribed periods, fails to complete the investment or the ecosystem development plan in time, or fails to meet the minimum investment amounts (Art. 32/1). Where obligations are only partly unmet and cancellation is not required, the relevant part of the support is clawed back (Art. 32/2). Support recovered after cancellation or partial sanction is collected under the Law on the Collection of Public Receivables No. 6183 (Art. 32/3), and sanctions relating to leased machinery may also be applied to the leasing company (Art. 32/4). Under the Communiqué, late payment of employer premiums covered by the support gives rise to late-payment interest collected from the employer (Communiqué Art. 17/2).

Practical steps for foreign investors

Complete the establishment of the Turkish company or branch before applying: applications for entities whose establishment is incomplete are not evaluated.
Do not incur investment expenditure before the application date; such expenditure is excluded from the certificate.
Determine the applicable Development Move programme or Sectoral Incentive System and any accompanying regional support before finalising the business plan, and check the minimum fixed investment amount applicable on the application date.
Calendar the investment period and any extension. Apply for completion approval within three months after the investment period or its extension ends. If no application is filed, the Ministry issues a notice; failure to apply within two months after that notice leads to cancellation under Article 29(5).
Retain E-TUYS documents for ten years from the application date and check whether a YMM report is required for the completion procedure.
Check the clawback consequences before transferring the investment, selling or leasing certificated machinery or changing the investment subject.

Frequently Asked Questions

Can a foreign-owned company benefit from Turkish investment incentives?

Yes, on the same basis as domestic investors. Law No. 4875 provides for equal treatment of foreign and domestic investors unless international agreements or special laws provide otherwise (Art. 3/a), and Communiqué No. 2025/1 lists companies and Turkish branches of foreign companies among the applicants for an incentive certificate (Art. 5/1). Eligibility still depends on the investment subject, region and minimum amounts and on the issuance of a certificate for the specific project.

What is the minimum investment amount?

There is no single minimum for every investment. The applicable amount depends on the investment subject and region, and a separate minimum applies to machinery acquired through finance leasing. Turkish-lira amounts under Decision No. 9903 are updated annually; check the Ministry’s threshold applicable on the application date (Art. 5(2), (3) and (10); Communiqué No. 2025/1, Art. 27).

Which taxes are reduced or exempted?

Depending on the programme and the project, an incentive certificate may provide customs duty exemption, VAT exemption and income or corporate tax reduction. Customs exemption does not cover the machinery and equipment in Annex 4. VAT and tax reduction remain subject to their statutory scope and conditions, including Article 32/A of Law No. 5520; the certificate alone does not determine the amount of tax relief available in a particular period (Decision No. 9903, Arts. 13, 14 and 20).

How long do we have to complete the investment?

The period is proposed by the investor; the Ministry may reduce a period longer than three years to three years, and an extension of up to half of the initial period may be granted if the investment is not completed in time, with further time possible for documented permit delays or force majeure (Decision Art. 29/2–3). The completion-approval application must be filed within three months after the period ends (Art. 29/5).

What happens if the certificate conditions are not met?

The certificate is cancelled for the breaches listed in Decision Art. 32/1, or the relevant part of the support is clawed back where cancellation is not required (Art. 32/2). Recovered support is collected under Law No. 6183, and sanctions relating to leased machinery may also be applied to the leasing company (Art. 32/3–4).

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