The investment environment in Turkey stands out by having one of the most competitive incentive regimes in global competitiveness indexes and within the emerging markets category. The data clearly proves the operational success of this strategy; according to 2025 data, 432 investment incentive certificates were issued for international investors, a total of 109.5 billion Turkish Lira (TL) in fixed investment commitments were received under these certificates, and the creation of 16,700 new jobs was projected. In the previous reference period of 2020, this figure was realized as 358 certificates with 22.6 billion TL of investment and 16,048 jobs. This massive volume increase in just five years is a direct indicator of the confidence in macroeconomic policies and the multiplier effect of the incentive system.
In order for investors to become operational rapidly without facing bureaucratic obstacles, the “One-Stop Shop” model has been implemented. Within the framework of this model, company establishment, obtaining work permits, residence permits, tax registrations, incentive applications, and environmental permit processes are coordinated from a single center. The Presidential Investment Office is at the center of this coordination, designing tailor-made investment packages for companies, presenting detailed feasibility reports, conducting market analyses, and providing completely free, confidential, and fully comprehensive consultancy (Incentive Team) services regarding communication with official institutions. This institutional guidance eliminates the problem of asymmetric information for international capital unfamiliar with market dynamics and minimizes market entry costs.
Turkey’s investment incentive system has a flexible and dynamic structure that differentiates according to the capital scale of the investments, the geographical region where it is located, the level of technology it contains, and its strategic importance in line with the country’s macroeconomic targets. The system is generally carried out by the General Directorate of Incentive Implementation and Foreign Capital, which are units under the responsibility of the Ministry of Trade and the Ministry of Industry and Technology. However, in order to localize and accelerate bureaucracy, Development Agencies or Chambers of Industry in the provinces where the investments will be made are also authorized as application authorities and certificate issuers for projects within the scope of General Incentives that do not exceed 10 million TL and have specific US 97 codes (for example, US 97 Code 15: Manufacture of food products and beverages and US 97 Code 17: Manufacture of textiles and modernization investments).
Incentive Applications
General Incentive Applications: Regardless of the sector and the region where the investment will be made, it provides standard VAT and Customs Duty exemption to all domestic and foreign investments that only meet the determined minimum investment amount. This is a universal support that directly reduces hardware and infrastructure costs.
Regional Incentive Applications: Turkey is divided into 6 different investment regions according to socio-economic development indices. The basic philosophy is to direct the FDI flow towards the relatively disadvantaged eastern and southeastern regions rather than the western regions where capital accumulation is dense, and to reduce inter-regional income inequality. As the development level decreases, the duration and intensity of the supports provided increase.
Priority Investment Subjects (Century of Turkey Initiative): These projects, designed for the production of high and medium-high technology products, are directly benefiting from the 5th Region support elements, which is one of the most advantageous packages, regardless of where they are made in the country. This application ensures that high value-added production is encouraged without spatial constraints.
Strategic Investments: It covers massive, high value-added, and R&D-intensive projects that aim to increase the domestic production of products for which the country has a current account deficit and high import dependency.
Exemptions and Deductions
The incentive instruments offered to foreign investors aim to lighten the financial burdens (CAPEX and OPEX) in a broad perspective, starting from the feasibility and construction phase of the investment to the rotation of working capital and the transition to the profitability phase.
VAT Exemption and Customs Duty Exemption: Under the investment incentive certificate, Value Added Tax is not paid for the main machinery and equipment to be procured domestically or from abroad and for building-construction expenditures for the realization of the project. Additionally, equipment imported from abroad is completely exempt from customs duty. This application provides liquidity relief by directly reducing the initial capital (CAPEX) requirement of the project by up to 20% at the beginning of the investment.
Corporate Tax Deduction: Until reaching the “Investment Contribution Rate” ceiling determined according to the nature and region of the investment, the corporate tax to be paid over the commercial profits to be obtained by the investor is applied at discounted rates of up to 100% or can be completely exempted in strategic projects.
Employment and Social Security Supports: In order to increase the competitiveness of labor-intensive investments, the state covers the Social Security Institution (SGK) premiums falling on the employer’s share for the additional employment provided by the investment under the incentive certificate from its own budget for periods up to ten years depending on the investment region. In strategic and regional investments, not only the employer’s share, but also the employee’s share calculated over the minimum wage and the income tax withholding are undertaken by the public sector. For qualified personnel (white-collar and researchers) to be employed in projects requiring advanced technology, direct wage subsidies of up to 20 times the gross minimum wage can be provided for 5 years.
Interest and Dividend Support: It is especially important in reducing the cost of capital during periods of high inflationary pressures. With the 2026 updates, maximum interest support amounts have been increased up to 301,000,000 TL in Technology Move projects and up to 226,000,000 TL in Strategic Move projects.
Infrastructure, Energy, and Capital Supports: The state allocates land, provides infrastructure connections (electricity, natural gas, etc.) free of charge or at a discount, subsidizes the bills of energy-intensive enterprises at a certain rate, and can even become a partner with a direct capital contribution of up to 49% of the investment amount in some strategic situations. Furthermore, the public sector can provide “purchase guarantees” for the products to be produced within the scope of the investment.
Turkey has created various investment areas with special legal statuses in order to encourage sectoral clustering in different branches of industry, to deepen the R&D culture through university-industry cooperation, and to increase export capacity. With their ready infrastructures and centrally managed bureaucracies, these regions serve as safe havens for foreign investors both operationally and fiscally.
Technology Development Zones (Technoparks – TDZs)
Technoparks, which are designed to host software development, industrial design, and advanced technology R&D activities, constitute the heart of Turkey’s innovation infrastructure. According to current data, there is a total of 101 Technology Development Zones (TDZ) throughout Turkey, 87 of which are actively operating and 14 of which are in the construction and projection phase. The financial incentives provided by Technoparks are highly comprehensive and their validity is guaranteed by current legal regulations until December 31, 2028:
Corporate and Income Tax Exemption: Corporate profits derived from licensed software, R&D, and design projects carried out within the zone are 100% exempt from all kinds of corporate and income taxes.
VAT Exemption: Deliveries of software produced and sold within the zone in areas such as system management, data management, military command and control systems, business applications, and mobile internet applications are completely exempt from VAT.
Wage Tax (Withholding) Exemption: As one of the most important incentives, an exemption is provided from income tax and all other types of withholding calculated over the salary payments of R&D and design personnel. While this situation reduces the net salary cost of the companies, it allows them to offer more competitive packages to their employees over the gross salary. Moreover, administrative and support personnel working in the zone are also benefiting from this tax exemption, provided that it does not exceed 10% of the total number of R&D personnel.
Social Security Support: The state covers 50% of the employer’s share of the SGK premiums of the personnel in the zone.
Customs and Stamp Duty Exemptions: Testing devices and consumables imported from abroad within the scope of R&D projects are exempt from customs duty, and the prepared contracts are exempt from stamp duty.
Integration of Production Facilities: Great flexibility has been provided for the transformation of theoretical R&D into practice, and production facilities approved by the Ministry of Industry and Technology can be built directly in or near the Technopark borders for the mass production of technological products resulting from R&D projects.
Organized Industrial Zones (OIZ)
Organized Industrial Zones (OIZs), which are the building blocks of traditional and technological production sectors, offer industrialists the opportunity to start production instantly with their land allocated, roads, wastewater treatment plants, electricity, and natural gas networks established ready infrastructures. Spread across 81 provinces of Turkey, 274 of the 392 OIZs are currently serving investors at full capacity. If foreign investors prefer to establish a factory within the OIZs, the advantages are as follows:
Land Purchase and Real Estate Tax Advantages: Land purchases by investors are exempt from Value Added Tax (VAT). After the factory construction is completed and the occupancy permit is obtained, the facility is exempt from Real Estate Tax for exactly 5 years.
Low Operating Expenses (OPEX): Since OIZs purchase energy and infrastructure resources wholesale, investors within the zone pay natural gas, water, and telecommunication costs over discounted tariffs compared to enterprises outside the zone.
Municipal Tax Exemptions: No fees are charged for land amalgamation and subdivision (division) processes. Exemption is provided from structuring taxes paid to municipalities during the construction and usage phase of the factory. If the OIZ has its own waste management system, companies are also exempt from the solid waste taxes of the municipalities.
Integrated Incentive System: Facilities established within the OIZ automatically have the right to benefit from employment and R&D supports as well as general, regional, or strategic investment incentives of the region they are located in.
Free Zones and Export-Oriented Production Centers
There are 19 Free Zones strategically located right next to international trade routes, seaports (Mediterranean, Aegean, and Black Sea coasts), and air cargo centers. Although these zones are physically located within the borders of Turkey, they are considered outside the Turkish customs territory in terms of customs law, offering unique freedoms to international companies completely focused on export-oriented and foreign currency-based production.
Capital and Profit Transfer: In free zones, the transfer of company profits, dividends, and capital abroad or to other regions of Turkey is completely free and unrestricted, without being subject to the permission of the Central Bank or any other authority.
Full Tax Exemptions: For companies engaged in manufacturing activities, the Corporate Tax rate is 100% exempted; that is, the tax is zero. In addition, a 100% exemption from Customs Duty, Value Added Tax (VAT), and Special Consumption Tax (SCT) is applied to raw material entries and product exits.
Tax Zeroing on Employee Salaries: Provided that the company exports a minimum of 85% of the free on board (FOB) value of the products it produces, a 100% exemption is applied to the income tax collected over the salaries of all personnel working in the factory or facility. This situation reduces the labor cost compared to international competitors.
Logistical and Operational Advantages: Export-oriented logistics service providers are also completely exempt from corporate and income taxes in free zones. Exemption from title deed fees is provided in real estate buying and selling. There are no restrictions on the storage period of imported goods in the zone; they can stay as long as desired. Furthermore, the importation of second-hand used machinery, which may be prohibited in other regions, can be made freely into free zones.
Industrial Zones and Investment Site Allocation Mechanism
There are 40 Industrial Zones designed for the rapid realization of massive and integrated industrial investments on a large scale that will change the face of the country’s economy. In these zones, investors can establish very long-term easement rights on Treasury lands at prices 8 to 10 times more discounted compared to market precedents. Some parts of the projects can be supported by public investment funds allocated from the budget of the Ministry of Industry and Technology. Bureaucratic processes have been extraordinarily accelerated, and the Ministry or the zone operating company operates as the sole authorized body. In addition, extra special incentive packages can be added to the Industrial Zones subject to the approval of the President.
The transformation of foreign capital or domestic companies producing in Turkey into main playmakers in global markets is guaranteed by the innovative export and branding support of the Ministry of Trade. Pursuant to the Decision on Export Supports No. 5973, the Turkish State provides significant support not only for factory investments within the borders of the country but also for the organic or inorganic growth (M&A) of Turkey-based companies abroad.
Foreign Investment and Company/Brand Acquisition (Interest Support): When a company resident in Turkey wants to acquire an international company with advanced technology or a brand with global recognition located abroad in order to develop its own technology or increase its market share, the financing costs are subsidized by the state. An interest support of 5 points for Turkish Lira loans and 2 points for foreign currency loans is allocated. While the total amount of interest support in company acquisitions can reach up to 45,000,000 TL, this amount is limited to 30,000,000 TL in brand acquisitions. This support, which covers a maximum of 50% of the paid interest expense, continues for exactly 5 years.
Global Supply Chain and Compliance with the Green Deal: Consultancy service expenses within the scope of the “Global Supply Chain Competence Project” are paid by the state at a rate of 50% for 5 years and up to a total of 10,000,000 TL.
TURQUALITY and Branding Vision: Under the state-supported corporate branding program TURQUALITY, companies are supported in overseas market research, corporate infrastructure, exclusive consultancies, brand registration, and promotional activities.