On 26 November 2016, the decision of Council of Ministers dated 17 October 2016 regarding project based investment aid structure has been published in the Official Gazette and became effective.
Abdülkadir
Güzeloğlu & Fatma Esra
Güzeloğlu
2 December 2016
In order to create value added investment
projects that includes innovative, R&D focused and sustainable elements and
targets, Council of Ministers of Republic of Turkey has developed a new scheme
that will allow investors to benefit from a myriad of exemptions and
incentives, including;
i.
VAT
exemption,
ii.
VAT
refund,
iii.
Tax abatement
or exemption,
iv.
Insurance
premium incentive for employer shares,
v.
Income
tax withholding incentive,
vi.
Interest
incentive or grants,
vii.
Contribution
to capital,
viii.
Contribution
to energy consumption and storage,
ix.
Guarantee
on public acquisitions,
x.
Assignment
of investment zones and land,
xi.
Assistance
for establishment of infrastructure, and,
xii.
Establishing
necessary steps in order to simplify administrative or legal process or to
making exceptions while resuming procedures regarding permits, licenses,
approvals or similar types of processes.
That said, a potential
investor who desires to benefit from abovementioned must respond announcement
or invitation of the Ministry of Economy with necessary documents, e.g. a
prepared feasibility report, impact analysis of the project and requests of the
investor. After this application, the Ministry of Economy will commence its
evaluation and reach a decision whether to transfer application with an
affirming opinion for approval of the Council of Ministers. Then, the latter
will take a final decision whether to issue the decision to support the
application, which, by the way, must reflect a minimum amount of USD 100
Million.
Apart from these, there are
other vital elements that should be taken into consideration in terms of different
areas of law. For instance, transfer of investment cannot be completed without
permission of the Ministry of Economy and confirmation of the Prime Ministry.
Add to that, apart from shares that are listed in Borsa Istanbul (‘‘BIST’’)
share market, investor company cannot transfer its shares before completion of
the investment without permission of the Ministry of Economy.
Having said these, it is
anticipated that the relevant decision issued by the Council of Ministers will
improve the pace of investments made in Turkey in a sustainable fashion by
providing a secured and solution-oriented climate.
In this regard, should you
have any further queries regarding legal infrastructure of foreign investment in Turkey, please do not
hesitate to contact us at info@guzeloglu.legal