Financing a Business in Turkey
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Financing A Business in Turkey
Government Finance and Incentives
The Turkish government offers a number of finance and tax incentives for UK businesses looking to start up or expand a business in Turkey. Information and contacts can be found at www.invest.gov.tr
Support for SME (Small and Medium Enterprises)
Aimed at companies working in education, healthcare, mining, agro-industry, tourism and software development. The business must employ less than 250 employees and have an annual turnover of less than TYR25million. The benefits include:
- Exemption from custom duties
- No VAT taxation
- Credit allocation from the company budget
- New credit guarantee support
The KGF (Credit Guarantee Fund) offers financial support and the KOSGEB (Small and Medium Sized Industry Development Organization) offers support in areas such as research and development, marketing and training.
Industrial Thesis Program (SANTEZ)
With the intention of stimulating investment in new technologies, funding and support is offered for businesses working on scientific or technical projects. This also covers process development, quality improvement and modification projects and the following incentives are offered:
- Up to 75% financial support for a project through direct grants
- Laboratory, materials and equipment support
- Approval for a project proposal in 4 months by an independent commission.
The TTGV (Technology Development Foundation) was established to encourage the development of environmental technology. The fund covers renewable energy production, energy efficiency improvement and environmental impact-reducing projects. The foundation offers the long term interest-free loans to companies looking to invest.
Free Trade Zones
The government has set up special areas to encourage foreign investments with the following incentives:
No customs duties and other assorted duties.
- No corporate income tax for manufacturing companies.
- No VAT or special consumption tax.
- No income tax on employees salary (subject to export conditions).
- No foreign exchange controls
There are also general exemptions from import duties and VAT for UK businesses investing in Turkey, although this varies depending on the location, scale and subject of the investment.
Credit from financial institutions is available from a variety of private financial institutions such as the HSBC, which have branches in the country. As with all commercial loans, a strong business plan and an understanding of the local business conventions and etiquette are important if pursuing this form of finance. It is also advisable to secure the services of an accountant.