Turkey: Energy and investments

Turkey offers a range of investment incentives to both local and foreign investors in less developed regions and supports the renewable energy sector in the form of guaranteed prices

(PresseBox) ( Munich, )
Turkey is a country with many opportunities for investors. Its geographically perfect position functions as a gateway between Asia, Europe and the Middle East. Also the Turkish government offers significant opportunities for investors. Therefore, investing in Turkey is very attractive.

Investment Incentives
The Turkish government offers investment incentives for local and foreign investors who consider investing and doing business in Turkey. These incentives aim at increasing investment in the less developed regions of the country and at encouraging technology and investment transfer into the country. Turkey has various investment incentives: general, regional, largescale and strategic investment incentives. This support varies according to the region and the manner the incentives mentioned above are offered.

Incentives are given in the following ways: VAT exemption, customs duty exemption, tax reduction, social security premium support (employer’s and employee’s share), income tax withholding, low interest rate financing, land allocation and VAT refund.

Turkey also supports the energy sector to increase renewable energy production. The Turkish government provides this support through guaranteed purchase at prefixed prices of electricity produced from renewable energy sources. In law No. 5346 on The Use of Renewable Energy Sources for Electricity Production, the Turkish government gives support and guaranteed purchase for electricity produced from renewable energy (see table).

As can be seen, the Turkish government guarantees a fixed price of 13.3 USD cent/kWh for solar energy. To benefit from this support, the investor must be in possession of a renewable energy sources licence and be included in the support mechanism. Also, the Technology Development Foundation of Turkey (TTGV) offers long term interest-free loans for technology developments, renewable energy production, energy efficiency improvements and environmental impact-reduction projects.

Exemplary types of support for environmental projects include:
• a maximum contribution rate of 50% per project
• a maximum budget of USD 1 million per project
• The pay-back term is in total 4 years after the start of the project, including one year without pay-back period.

As mentioned above, the Turkish government offers very attractive incentives for foreign and local investors who are interested in investing in the renewable energy sector in Turkey. Turkey's perfect geographic location is among the reasons to do business in this country.

“Turkey’s TTGV offers long term interest-free loans for technology developments, renewable energy production and environmental impact-reduction projects.”
Zehra Isıksoy (L.L.M.), Tax Law Consultant, ECOVIS Kapital SMMM & Denetim A.S., Istanbul, Turkey, zehra.isiksoy@kapitalnetwork.com
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