The new "Decree on State Aids in Investments", which entered into force with the Presidential Decree No. 9903 (Decree) published in the Official Gazette dated May 30, 2025, introduced a significant change in Turkey's investment incentive system. This new regulation, which supersedes previous Decree, aims to increase production and employment and encourage high value-added investments that will meet critical national needs, ensure security of supply, reduce foreign dependency and increase international competitiveness. Furthermore, accelerating the green and digital transformation of enterprises is among the main objectives of the Decree.
A- Structure of the Investment Incentive System
The new system is built on three main structures: "Türkiye's Century Development Move" (Türkiye Yüzyılı Kalkınma Hamlesi), "Sectoral Incentive System" (Sektörel Teşvik Sistemi) and "Regional Incentives" (Bölgesel Teşvikler). These structures offer different support elements according to the nature and regional location of investments. In particular, the "Machinery Support" introduced within the scope of the "Turkish Century Development Move" stands out as a new and important support element that provides direct cash grants for the purchase of machinery and equipment with high unit prices.
The table below summarizes the three main structures of the new incentive system and the main support elements offered under each system:
|
Support Element |
Türkiye's Century Development Move |
Sectoral Incentive System |
Regional Incentives |
|
Customs Duty Exemption |
✓ |
✓ |
|
|
VAT Exemption |
✓ |
✓ |
|
|
Tax Reduction |
✓ |
✓ |
|
|
Interest or Dividend Support |
✓ |
✓ |
|
|
Machine Support |
✓ |
||
|
Investment Location Allocation |
✓ |
✓ |
|
|
Social Security Premium Employer’s Share Support |
✓ (within the scope of Regional Incentives) |
✓ (within the scope of Regional Incentives) |
✓ |
|
Social Security Premium Support (For Region 6) |
✓ (within the scope of Regional Incentives) |
✓ (within the scope of Regional Incentives) |
✓ |
B- Türkiye's Century Development Move
Türkiye's Century Development Move consists of three sub-programs: [1] Technology Initiative Program, [2] Local Development Initiative Program and [3] Strategic Initiative Program. This thrust supports more strategic and high value-added investments. The project-based evaluation of investments shows that the government has adopted a more nuanced approach to risk management and strategic impact assessment. To briefly mention the sub-programs;
1- The Technology Move Program supports investments in products or technologies included in the priority product list. This priority product list is determined by the Ministry of Industry and Technology and includes products in medium-high and high-tech sectors and products critical for the development of these sectors.
The machinery support offered under this program was introduced as a new cash support element. The investor is paid 25% of the cost of machinery and equipment with a unit price of TL 2 million or more, procured within the term of the incentive certificate, from budget resources. This support amount cannot exceed 240 million TL, provided that it does not exceed 15% of the fixed investment amount. However, machinery support is not provided for investments that benefit from interest or profit share support under this program. This implies that investors have to choose between these two important capital incentives.
2- The Local Development Initiative Program are evaluated on a project-by-project basis by the Local Development Initiative Program Evaluation Committee and incentive certificates are issued for eligible projects. The "list of local investment topics" to be determined for each province is published by the Ministry's communiqué and can be updated in January each year. The conditions and upper limits for interest or profit share support and machinery support are the same as for the Technology Move Program.
3- The Strategic Move Program supports investments in the manufacturing sector with high added value, which will meet the country's critical needs, ensure supply security, reduce external dependency, increase international competitiveness and increase research and development (R&D) content, as well as investments within the scope of the Digital Transformation Program and the Green Transformation Program. The "strategic move investment topics list" is determined by the Ministry and can be updated in January each year.
The minimum fixed investment amount for investments to be supported under this program is set at 100 million TL for investments in the production of high-tech products and 200 million TL for other investments. Applications go through a preliminary evaluation process and are expected to meet at least three of the following five criteria:
a) The investment subject is included in the list of strategic move investment subjects.
b) The ratio of exports to imports of the main product(s) planned to be produced in the last year must be at least 70%.
c) A minimum value added rate of 30%.
d) Equity up to 20% of the investment amount.
e) The total amount of imports realized in the last year for the product subject to investment is USD 50 million or more.
It should be noted that investments under the green transformation program and digital transformation program with a minimum amount of 50 million TL can be directly supported under the Strategic Move Program without going through the detailed pre-assessment process mentioned above.
C- Sectoral Incentive System
This system includes two subsystems, namely [1] Priority Investments Incentive System and [2] Target Investments Incentive System, and supports investments in specific sectors according to specific criteria. To briefly mention the subsystems;
1- According to Article 9 of the Decree, the Priority Investments Incentive System supports the investment topics listed in the table below:
|
No |
Investment Subject |
|
a |
Investments decided to be supported under the Digital Transformation Program or Green Transformation Program. |
|
b |
Investments for the production of high-tech products specified in the priority product list published within the scope of the Technology Move Program or investments for the production of high-tech products with a minimum amount of 500 million TL. |
|
c |
Investments for the production of medium high technology products specified in the priority product list published within the scope of the Technology Move Program or investments for the production of medium high technology products with a minimum amount of 1 billion TL, except for investments to be realized in Istanbul. |
|
ç |
Investments made in the 6th region, investments evaluated within the scope of the provisional 3rd and provisional 4th articles, excluding the investments with a joint character. |
|
d |
Investments in the field of defense to be realized based on the project approval to be obtained from the Presidency of Defense Industries. |
|
e |
Solar energy-based electricity generation facility investments and wind energy-based electricity generation facility investments, provided that they are limited to the contract power in the connection agreement within the scope of the energy generation activity to be realized for the self-consumption of manufacturing industry enterprises. |
|
f |
Electricity generation investments in which minerals in the 4-b group of Article 2 of the Mining Law No. 3213 dated 4/6/1985 are used as input within the scope of a valid mining license and permit issued by the Ministry of Energy and Natural Resources. |
|
g |
Nuclear power plant investments. |
|
Ğ |
Liquefied natural gas (LNG) investments and underground natural gas storage investments with a minimum amount of TRY 500 million. |
|
h |
Mineral extraction investments and/or mineral processing investments. |
|
ı |
Law No. 3213 on mineral exploration investments to be made in licensed areas by investors holding a valid exploration license or certificate issued pursuant to the Law No. 3213. |
|
İ |
R&D investments. |
|
j |
Investments outside the province of Istanbul related to R&D or design projects carried out in R&D centers or design centers. |
|
k |
Investments for the production of products for which a Technological Product Experience Certificate has been issued. |
|
l |
Test center investments for medium high technology and high technology products and test center investments to be made by exporters' associations to support foreign trade. |
|
m |
Investments in the production of software and IT products to be realized in specialized free zones without the requirement of minimum investment amount. |
|
n |
Data center investments that meet the technical conditions and standards to be determined by the Communiqué and meet the minimum installed capacity requirement of 3 megawatts. |
|
o |
Investments of at least TRY 200 million to be made by cloud service providers in data centers that provide services according to the technical conditions and standards to be determined by the Communiqué. |
|
ö |
Investments subject to environmental license under the Environmental Permit and License Regulation. |
|
p |
Investments in transportation by rail, sea or air. |
|
r |
Port investments for freight transportation (excluding marinas and marinas). |
|
s |
Tourism accommodation investments in culture and tourism protection and development zones, tourism centers, within the borders of the affiliated / related area directorates of the Ministry of Culture and Tourism or in thermal tourism. |
|
ş |
Private sector investments in nursery and day care centers, pre-school education, primary, secondary and high school education investments and training investments for the use, repair and maintenance of aircraft. |
|
t |
Elderly and/or disabled care centers with a minimum capacity of 100 persons or more. |
|
u |
Licensed warehousing investments. |
|
ü |
25 decares or more of soilless greenhouse investments based on automation (including computer-controlled air conditioning, irrigation, fertilization and spraying systems) containing domestically produced greenhouse technologies. |
|
v |
Investments made against earthquake or fire risk in existing facilities with industrial registry certificate. |
|
y |
Investments in the field of disaster technologies to be realized based on the letter of conformity to be obtained from the General Directorate of Industry. |
2- Target Investments Incentive System
The Targeted Investments Incentive System supports the investment topics listed in Annex-3, provided that they meet the specified conditions. However, there are some important exceptions in this system:
- Investments in electricity generation, electricity energy distribution, electricity energy storage and distribution of gaseous fuels over the main grid and investments to be realized in Istanbul cannot benefit from tax incentives.
- Interest or profit share support is provided only for investments to be realized in the 4th, 5th and 6th regions.
- Investments in electricity generation, electricity distribution, electricity storage and distribution of gaseous fuels through the main grid are not eligible for interest or dividend support.
The amount of interest or profit share support under this system cannot exceed 12 million TL, provided that it does not exceed 10% of the fixed investment amount.
D- Regional Incentives
These incentives are implemented by dividing the country into six regions according to socio-economic development levels in accordance with Annex-2. Regional incentives are applied to investments supported under both the Turkish Century Development Initiative and the Sectoral Incentive System, according to the region where the investment is realized.
Compared to the tiered regional incentive system, it has set a lower minimum investment threshold, especially for Region 6. This demonstrates that by encouraging economic employment in less developed regions, it aims to achieve a more balanced growth across the country.
E- Technology Classification and Supported Sectors
The Technology Move Program supports products or technologies included in the priority product list. These are categorized under two headings as follows in Annex-1 of the Decree:
- High Technology Products: Manufacture of basic pharmaceutical products, manufacture of computer, electronic and optical products, manufacture of air and space vehicles and related machinery.
- Medium-High Technology Products: Manufacture of chemicals and chemical products, manufacture of arms and ammunition, manufacture of electrical equipment, manufacture of machinery and equipment not elsewhere classified, manufacture of motor vehicles, trailers and semi-trailers, manufacture of railway locomotives and wagons, manufacture of military land combat vehicles, manufacture of transport equipment not elsewhere classified, manufacture of medical and dental instruments and equipment.
Details on the supported sectors and the incentives offered to these sectors are set out in Annex 3 of the Decree. Some of the noteworthy investment topics in the list of different sectors are as follows:
- Agriculture, Forestry and Fisheries: Greenhouse investments, cattle breeding (dairy and other), sheep and goat breeding, poultry breeding, aquaculture.
- Mining and Quarrying: Investments made for group I and II mines defined in the Mining Law.
- Manufacturing: Meat and meat products, fish processing, fruit and vegetable processing, vegetable and animal oil production, dairy products, bakery products, beverages, textiles, clothing, paper, chemicals, pharmaceuticals, rubber and plastic products, metal products, machinery and equipment, computer and electronic products, motor vehicles, other means of transportation, furniture.
- Electricity, Gas, Steam and Air Conditioning Production and Distribution: Electricity generation from renewable sources, storage of electrical energy.
- Water Supply; Sewerage, Waste Management and Remediation Activities: Waste collection, recovery activities.
- Transportation and Storage: Rail, maritime, pipeline transportation, storage activities, port and airport management.
- Accommodation and Food Service Activities: Hotels and similar accommodation, student dormitories.
- Telecommunications, computer programming, consulting, IT infrastructure and other information service activities: Computer programming, computing infrastructure, data processing.
- Professional, scientific and technical activities: Technical testing and analysis activities, animal hospitals.
- Administrative and support service activities: Call centers.
- Education: Some programs are excluded, along with investments made by public institutions.
- Human Health and Social Work Activities: Hospital services (excluding public), residential care activities, child day care (nursery) activities.
The sectors and their conditions listed in Annex-3 are important to determine which investment can benefit from which incentive system (Regional, Priority, Target).
F- Conclusion
The new investment incentive system, which entered into force with the Presidential Decree No. 9903, sets a strategic orientation for the Turkish economy in the areas of high technology, green and digital transformation. The dual structure of the project-based "Türkiye's Century Development Move" and the criteria-based "Sectoral Incentive System" offers a multifaceted approach to economic growth, supported by regional benefits. In addition to traditional incentives, direct "Machinery Support" is introduced, offering flexible financial support.
A careful evaluation process is important for investors to take full advantage of the opportunities offered by this new system. In particular, projects should be scrutinized for compliance with detailed criteria such as NACE codes for technology classification and specific investment topics under the Priority and Target Investments systems. Understanding regional classifications is critical to maximizing benefits, especially for projects considering investments in less developed regions. Moreover, the transition to electronic processes such as E-TUYS makes it imperative to be familiar with digital application and reporting requirements. With an application period until 2030, it is important to strategically review the implementation principles of the Decree and optimize investment plans accordingly.
You can review the full Decree (in Turkish) at this link.