What is Investment Incentive Certificate?
State Incentives and Incentive Certificate Transactions Consultancy… Investment Incentive Certificate is a document that must be obtained in order to benefit from the incentives and governmental subsidy provided by the Turkish state for investments to be made in various sectors such as industrial products, agriculture and agro-industrial products, energy and mining investments, as well as investments in service sectors. In order to have an Investment Incentive Certificate, it is necessary to apply in accordance with some binding terms within the investment period and to act in accordance with all provisions regulated in the legislation. According to the provisions of the legislation, there are some issues to be considered not only during the investment period but also within the 5 years following the completion of the investment process. If these issues are not taken care of, there might be serious penalties arise.
A document called “Investment Incentive Certificate” is required in order to benefit from state subsidies and incentives applied to investments planned to be made within the borders of Turkey. In order to obtain and use this document, the Decree No. 2012/3305 on State Aids in Investments and the Communiqué No. 2012/1, which includes the procedures and principles regarding the implementation of this Decision applies. Investments are encouraged and supported by the state within the framework formed by the provisions of the mentioned legislation.
Investment Incentive Certificate is a document issued by government institutions to encourage investments to be made in Turkey under various conditions and in accordance with the relevant legislation. Investors with Investment Incentive Certificate are supported by many support mechanisms and incentive applications. It is a significant tool to increase the rate of development of the Turkish industry and increase the level of economic development. It is essential to have detailed information about incentive packages before starting the investment. You can examine our page in detail or contact us directly for all other incentive applications and related legislation. Detailed information about the process and all other steps to follow for obtaining an Investment Incentive Certificate and all other packages of governmental support is given below.
Government Incentives Consultancy Services
Our services are including but not limited to Government Incentives to our Entrepreneurs, SMEs and Large Investors and export companies with our expert teams in all provinces of our country, including leading companies in their sectors, and supports consultancy services and contributes to our country’s economy. With our expert team on Government Incentives and Supports, AG Audit remains as the closest business partner of your company.
Government Incentives, Supports, Grants and Aids vary depending on Ministries, Institutions, Provinces, Subjects and Sectors. The support and incentives given by different institutions and ministries create a situation that will make it difficult for entrepreneurs, investors and exporters to manage and cause them to not benefit enough from the incentives. With the service we provides at this very point, your company’s budget will be increased whereas you will benefit from the incentives to the maximum extent.
you can visit AG Audit for Incentive and Grant Advisory Services and comprehensive consultancy services on evaluation of your compliance with incentives, determination of appropriate incentives (incentive control), determination of incentives that can be used by the companies that will purchase your products.
What is an Investment Incentive Certificate?
The question of what an Investment Incentive Certificate is not is more crucial than the definition of this document. Today, there is a good deal of false information available on the issue from a variety of sources. The Investment Incentive Certificate offers you a lot of benefits, but you must be very aware of its restrictions.
What is Not an Investment Incentive Certificate;
Investment Incentive Certificate is not a loan given to you. Although there is interest or dividend support within the scope of the document, this document is not an investment loan or a loan with another name. There is no low interest or cost effective loan. People who provide this information should not be trusted.
While your Investment Incentive Certificate will not be issued under normal circumstances, some people cannot be sure that it has been. The legislation is very clear and the Ministry carries out its activities in full transparency. The applications are evaluated and concluded as a result of a good analysis of the provisions of the legislation, under the conditions that the project is prepared in accordance with the procedure, the application is made completely and the additional information and documents requested by the Ministry are submitted on time. Briefly; The arrangement of the document does not depend on the applicant, but on the compliance of the application with the legislation in terms of content and form. Do not trust people who claim to have edited your document themselves.
It is not possible to guarantee the receipt of documents. It can be guaranteed to make a complete and complete application, to carefully examine and follow all stages of the project, to submit additional information and documents to the Ministry in a timely manner, to provide honest and clear information to the investor and the Ministry, but the final decision is at the Ministry and therefore we guarantee to issue or receive a certificate. should not be trusted.
Within the framework of the document, no free or no-cost investment opportunity is provided. There is a support element within the scope of the document called Investment Site Allocation, and having an Investment Incentive Certificate that contains this support element is a very important criterion in the allocation of Treasury lands. People who claim to have found a free investment area shouldn’t be trusted. However, it should be understood that this support component alone does not grant the power to allocate, and anybody who claims otherwise should be taken with a grain of salt.
You cannot receive illegal support items or higher rates. It can be extracted more for you than is written in the legislation, or it is not written in the legislation, because these incentives are insufficient.
As can be understood from here; These people, who do not comply with moral values, temporarily give false information in various cities at various times, to gain unfair advantage, and to carry out various activities under the name of consultants; Try puts both real consultants and Ministry employees in a difficult situation. We recommend that you give importance to the question of what is an Investment Incentive Certificate as much as you are looking for an answer to the question of what is an Investment Incentive Certificate.
How to Obtain Investment Incentive Certificate?
In order to obtain the Investment Incentive Certificate, first of all, it is necessary to apply to the Turkish Ministry of Industry and Technology, General Directorate of Incentive Implementation and Foreign Capital. A certificate for investment incentives can be obtained in one of two methods. Depending on the application date, these two approaches differ. All applications submitted after this date began to be made electronically, even though applications submitted before February 7, 2018, used a separate process. Applications submitted after this date must be submitted via E-TUYS, and all applications will be electronically reviewed. Speaking of these two application methods, they can be briefly summarized as follows;
– All applications that were to be submitted before February 7, 2018, had to be done so physically. Specifically, the person or people authorized to represent and bind the investor had to sign and stamp the required information and papers, which were selected according to the investment type and numerous features, and submit them in printed form to the general directorate. All Investment Incentive Certificate applications submitted up until this point have been completed in a physical setting, and all essential transactions during the investment period have also been completed physically, i.e., by presenting all required data and paperwork on printed paper.
* All transactions involving documents received before to 02/07/2018 are still physically completed using printed paper. As with the production and submission of wet signed papers, completion visa procedures—that is, the closure or valuation process that must be carried out after the investment is finished—will also continue. Applications submitted after this date will go through the whole procedure electronically.
– After February 7, 2018, all applications must be submitted online using the E-TUYS, the Electronic Incentive Application and Foreign Capital System. All wet-signed material and paperwork must be electronically signed and delivered to the general directorate via the E-TUYS system by accredited individuals or groups. When the investment is finished, the papers needed for the completion visa or closing process are supplied through E-TUYS. All work and transactions relating to the documents to be issued on the basis of applications to be made after this date are conducted through E-TUYS. e-TUYS platform
Who Can Obtain Investment Incentive Certificate?
Investment Incentive Certificate for all types of domestic and foreign companies and real persons, ordinary partnerships, cooperatives, unions, associations and foundations, public institutions and organizations, municipalities, professional organizations, and branches of foreign companies considering investment incentives and government support within the borders of public institutions and for the benefit of the country.
Any type of business, including corporations and natural people, may qualify for an investment incentive certificate, regardless of whether its capital is domestic or international. Companies with 100% foreign ownership are also eligible for incentives as long as they invest inside our nation’s boundaries and follow the rules outlined in the relevant law.
Domestic and foreign companies and real persons operating in Turkey’s Free Zones also have the right to have an Investment Incentive Certificate in order to benefit from the incentives.
What Information Does the Investment Incentive Certificate Include?
The purpose of this document, investment, production, and investment, financial information of the investment (i.e., the total investment amount realized at the end of the production capacity anticipated to be established and this amount within the product in question, the Investment Incentive Certificates), investor information (i.e., name or title, address, phone number, and fax number, contact information, and e-mail address, such as website, support staff);
In addition to these, it also includes a section with special conditions. In these special conditions, there are some very important details in terms of incentive applications in some cases. If these details are not taken care of, some supports cannot be benefited and in some cases, penalties may be incurred. For this reason, as in the other sections, the special conditions section of the Investment Incentive Certificates should be read very carefully and attention should be paid to the issues specified in this section.
What are the Incentive Elements within the Scope of the Investment Incentive Certificate?
There are many government incentives and encouragements implemented within the scope of the Investment Incentive Certificate which are as follows;
1- VAT Exemption; Equipment that permits the provision of investment machines excluded from Value Added Tax (VAT), i.e., regardless of the VAT rate applied to the machines, without paying this price, and listed and approved in local and/or imported Machinery Equipment Lists. When locally produced machinery are employed, they are not seen as falling inside the incentive’s purview and are not eligible for the incentives. However, imported machinery and equipment might be considered within the context of incentives when specific prerequisites and features are met.
2- Customs Duty Exemption; It is an incentive that offers a customs tax exemption for qualified machinery and equipment that is imported and is on the Imported Machinery and Equipment List. Even if some items, like forklifts, are thought to fall under the investment umbrella, there is no mention of a customs exemption or any other justification in the list of imported machinery and equipment. In addition to this, machinery and equipment that has been certified and delivered can be imported with a 100% duty-free exemption regardless of the level of the customs tax, and secondhand machines may qualify for incentives under specific circumstances.
3- Tax Reduction; It is applied in the form of non-payment and discounting of corporate tax and income tax at varying rates and upper limits depending on the type of investment. In order to benefit from the tax deduction, it is necessary to have a document issued in the regional system, and the amount called investment contribution rate, which determines the upper limit of the tax deduction, varies according to the region where the investment is made, as well as the percentage (%) tax deduction. Less support is applied in advanced zone 1, while support density is higher in less developed zone 6.
4- Investment Site Allocation; For investments that require a lot of lands, such as integrated livestock investments, treasury lands can be allocated. It is a very difficult task and process to make the allocation successfully together with the support element of the investment location-allocation. The successful conclusion of this process is possible by analyzing a large number of data together and sharing it simultaneously and effectively with more than one relevant institution and following the process very closely. Investors can benefit from very advantageous conditions by providing investment place allocation.
5- Interest Support or Profit Share Support; With this support element, which is created to contribute to the financing needs of investments, the interest or dividends applied to investment loans to be taken from banks, participation banks or financial institutions (contracted institutions) are determined by certain amounts. It is a system that works in the form of support by paying a part of it to the investor in 3-month periods. Interest support or dividend support is applied in varying amounts depending on the region where the investment is made, for example, 7 points for an investment in the 6th region.
6 – Employer’s Share of Insurance Premium Support; More employment-intensive businesses such as textiles-employment created to support garment investments, This incentive is given to the Social Security Institution by the General Directorate of Incentive Practice and Foreign Capital on behalf of the investor from 2 to 12 It is applied as Insurance Premium Employer’s Share payment, which is applied at rates varying from year to year. By eliminating the SSI premium burden on the company, it provides the company with the opportunity to increase its production and marketing power.
7- Insurance Premium Support; Similar to the Insurance Premium Employer’s Share Support, this time it is a support element implemented in the form of the employee’s share of the SGK premium covered by the state. Thanks to this incentive mechanism, the burden of SSI premiums up to 10 years is taken from the investors. In this way, it is possible to increase production capacity and develop new marketing opportunities with the additional fund created. Insurance premium support is applied for the amount of employment determined by loss adjusters after visa completion.
8- Income Tax Withholding Support; It is also an employment incentive application and in the regional system, the investments to be made in the 6th region. The income tax arising from investment-related employment is applied by the state in the form of withholding for a long period of 10 years. For this reason, it is necessary to determine the employment related to the investment by making a completion visa. Unfortunately, this support element cannot be used during the investment period and is an incentive element applied for employment determined after the valuation process.
9 – VAT Refund; this incentive element was actually established for investors with Strategic Investment Incentive certificates. Although it is a support mechanism; As practised in previous years, Added Value on Investment (VAT) Taxes related to building construction expenditures returned for the investor in 2020 and 2021 as well. Building construction expenditures are expenditure items for which VAT exemption is not applied under normal conditions, but thanks to this incentive, it is possible to benefit from an additional incentive element by returning the VAT amount paid.
Investment Incentive Certificates; General, Regional, Priority, Strategic, Large-Scale (Large-Scale Investment Incentive Certificate is not issued as of 2019.) and Project Basis, although there are multiple support elements applied for all document types, the support elements are different from each other. The support elements within the scope of the Investment Incentive Certificate differ according to the incentive system and type of certificate. This situation also shows how important it is to manage the practices and the whole process by people or organizations who have a good command of the legislation in order to make the most accurate and maximum use of the support elements that can be benefited from within the scope of the Investment Incentive Certificate.
Incentive mechanisms and support elements explained in this section are mainly; These very specific and specific incentives Incentive system consists of General, Regional, Priority, Strategic and Major, much more flexible and changeable according to investment needs-Based (now regulated) Scale document types and Project being implemented. In order to benefit from these, a very detailed feasibility study is required. Investors cannot benefit from all necessary incentives at the maximum level due to reports that are not prepared in sufficient detail.
Investment Incentive Certificate Consultancy
It is the entirety of corporate activity necessary for the completion of all transactions involving Investment Incentive Certificates and other related transactions on behalf of investors. First and foremost, comprehensive knowledge of the legislation needs to be acquired in order to deliver this service at the institutional level. Numerous applications based on law have been created in practice. These application techniques have to be grasped as well. For each area, specialized departments have been created, and each department has its own procedures and expectations. These applications should be looked at and dealt with before receiving an Investment Incentive Certificate. To provide business consulting services in this respect, it is vital to direct the investors in accordance with both the law and the implementation procedures; this will guarantee that the investments receive the maximum amount of support.
The consultant’s responsibility is to safeguard the benefit and make sure investments benefit as much as possible from the assistance and incentives. However, long-term harm will undoubtedly result from ensuring that the investment receives excessive support that is illegal, whether through information manipulation or the preparation of false information. Therefore, it is advisable to avoid consulting such research and to have little faith in those who do so. The Investment Incentive Certificate may be used wisely to increase your benefits. All of these investigations should, however, be conducted in accordance with the legal requirements.