The current incentive regime is in line with Turkey's commitments under the WTO and customs union, hence, it does not breach the international liabilities and commitments of Turkey.

There is no discrimination between the local and foreign investors with respect to the application of incentives.

Incentives generally comprise a mix of tax and non-tax incentives. The investors may qualify for the following general incentives based on the location, scale, and other qualifications of the investment;

1. Exemptions From Customs Duties And Fund Levies
2. VAT Exemption For Machinery And Equipment
3. Exemption From Certain Taxes, Duties And Fees
4. Regional Investment Incentives (Grant Of Subsidized Credits)

In order to qualify for the above incentives (except for investment allowance), it is necessary to obtain an incentive certificate before the investment is initiated.

An investment must meet;

• TRY 400K (USD285K) for the normal regions and developed regions
• TRY 200K (USD140K) for priority development regions, and regional requirements to be granted with an incentive certificate.

The application for incentive certificate is made to the Undersecretariat of the Treasury by the foreign investors. Obtaining an incentive certificate is an easy procedure. However, the major incentive item, namely the investment allowance, neither requires an incentive certificate nor needs to meet the above criteria.

For the investment incentive purposes, Turkey is divided into three regions;

Developed Regions ; include Istanbul and Kocaeli provinces where bulk of Turkish manufacturing is located, and the municipalities of Izmir, Ankara, Bursa, Antalya, Adana,

Priority Development Regions ; mainly the provinces in the eastern and northern Turkey.

Normal Regions ; include those areas outside the developed regions, which include much of western and central Turkey.

As a rule, incentive measures - other than the investment allowance - are applicable only to the investments in the normal regions and priority development regions. The investments in the developed regions do not qualify for the investment incentives. Although this is the general rule, investments in certain regions -in the so-called ‘’industrial belts’’ and ‘’technology belts’’- within the developed regions are granted the incentives as well.

Furthermore, there are some special sectors of importance for which incentives are granted regardless of the location of the investment. The investment in the developed regions in these sectors also qualifies for the incentive measures.

The list of special sectors of importance;

SECTORS OF SPECIAL IMPORTANCE *
Research and development	Software development
Environmental protection	Rehabilitation centers
Infrastructure (including energy)	Ship and yacht building
Education	Shipyard
Health	Aircraft and helicopter production
Tourism	Electronics industry
Mining	Priority technological investments
Information technology
Investments exceeding USD 50 million and having at least one of the following criteria; advanced technology, high value added, increasing tax revenues and employment opportunities
* These sectors are granted the investment incentives regardless of the region of the investment