New investments have taken attention in in weaving and clothing industries in Turkey. The Ministry of Economy, with its attractive investment incentives directed at domestic and foreign capital owners whom are considering their future investments in Turkey, support new investment decisions and efforts to expand existing ones in many sectors.
Financial support provided with the Ministry of Economy in areas such as exemption of VAT, customs duty, tax reduction, interest support, location based financial support for the allocation of investment, employer's insurance premium support, VAT refund and the support for the entrepreneurs and businessmen to attract new investments.
In order to access these incentives, an “Investment Incentive Certificate” must be issued first. The incentive certificate is a document that contains the characteristic values for the investment and serves as a complimentary in cases where investments made in accordance with these values and pre-determined conditions and in this way, allows for the privilege to benefit from registered support elements and applied for investments to be made in accordance with the purposes of the decision.
When we look at the investment classification by company, in the first nine months of 2021, for the companies whom awarded for investment incentive certificate and completing their investments, it is apparent that specifically the eastern and southeastern Anatolia regions carrying out the investments the most in investment completion visas. Due to the fact that the provinces in the Eastern and Southeastern regions are ranked at the sixth stage in the list classification by region to receive the incentives, the attractiveness of these cities may be increased.
Kahramanmaraş, as the fifth in textile investments gaining momentum recently, is considered as another center of attraction. In accordance with the first nine months investment incentive completion visas revealed by the Ministry of Economy, Kahramanmaraş ranked as the leader. When we look at the figures a year prior, amongst the investment incentives granted with a completion visa by region, it can be seen that sixth region was taken the lead amongst others. In these figures, especially in the field of weaving and apparel manufacturing, most of domestic investments are getting their power from the Eastern and Southeastern Anatolian Regions that is distinctive.
What is the coverage of these investments?
Amongst the companies that apply for an incentive certificate to the Ministry of Economy, those whom met with the pre-defined conditions can access investment incentives by region and the scale of investments to be made accordingly. Actual investors, ordinary partnerships, capital companies, cooperatives, unions, business partnerships, public institutions and organizations (institutions and organizations with general and special budgets, special provincial administrations, municipalities and public financial enterprises and institutions and organizations with a share ratio in their capital composition exceeding fifty percent) ) and public institutions, professional organizations, associations and foundations, and branches of foreign companies abroad can apply for an incentive certificate. The scope of the incentives given by the Ministry of Economy involves:
Within the scope of general incentive practices: Customs duty exemption, value added tax (VAT) exemption, income tax withholding support (for investments to be made in the sixth region) and employer's insurance premium support are provided.
Within the scope of regional incentive applications: Customs duty exemption, value added tax (VAT) exemption, tax reduction, employer's insurance premium support, and location based financial support for the allocation of investment. Interest support (for investments in the third, fourth, fifth and sixth regions), income tax withholding support (for investments to be made in the sixth region) and insurance premium support (for investments to be made in the sixth region) are provided.
Within the scope of large-scale investment incentives: Customs duty exemption, value added tax (VAT) exemption, tax reduction, employer's insurance premium support, location based financial support for the allocation of investment, income tax withholding support (for investments to be made in the sixth region), insurance premium support (to be realized in the sixth region) for investments).
Within the scope of incentives for R&D and environmental investments: VAT exemption, customs duty exemption and interest support supports are to be benefited from.