Tax Incentives in Türkiye for Foreign Companies in 2025
Türkiye continues to support international entrepreneurship by offering a broad range of tax incentives and investment advantages for foreign companies in 2025. These policies are designed to accelerate economic development and enhance competitiveness in priority sectors. Below is a comprehensive overview of the current incentives tailored for international investors operating or planning to operate in Türkiye.
1. Tax Advantages for Capital Investments
- tax exemptions: Companies investing through capital increases in new business areas benefit from partial or full income and corporate tax exemptions for a limited duration. A portion of the investment amount can be deducted from the corporate income tax base.
- VAT and customs duty exemptions: Foreign-owned companies holding an investment incentive certificate are exempt from VAT and customs duties on imported machinery and equipment.
2. Green and Sustainable Investment Incentives
- incentives for renewable energy: Projects involving wind, solar, and low-carbon manufacturing can qualify for up to 50% tax reductions. Priority is also given in land allocation for these projects.
- support for sustainable production: R&D expenses related to eco-friendly and resource-efficient production are fully deductible from corporate tax bases.
3. Digital Transformation and Technology Investment Incentives
- corporate tax reduction for tech projects: Investments in software development, e-commerce platforms, and data centers enjoy a reduced corporate tax rate of 10%.
- e-export incentives: Exports of digital services are completely exempt from VAT. Additionally, up to 30% of digital marketing expenses are government-funded.
4. Special Tax Incentives for Foreign Investors
- corporate tax discounts: In certain regions, the corporate tax rate is lowered from 25% to between 5% and 15% for foreign-capital companies.
- reduced withholding tax rates: Under double taxation treaties, the dividend and interest withholding tax can be reduced from 15% to between 5% and 10%.
- unrestricted capital transfers: There are no limitations on the repatriation of profits or proceeds from the sale of business operations.
5. Incentives for R&D and Technological Development
- tax support for R&D: The employer’s share of social security premiums for staff employed in R&D projects is fully covered by the state.
- TÜBİTAK funding programs: The government offers non-refundable grants and low-interest loans through national programs, such as Tech-InvesTR, which guarantees up to 75% of technology-focused investments.
6. Regional and Sector-Based Incentives
- support in priority regions: In underdeveloped areas like Eastern and Southeastern Türkiye, companies can receive up to 90% support on social security premiums and receive free or discounted land allocation.
- benefits in organized industrial zones (OSBs): Companies operating in OSBs are eligible to get up to 30% of their energy costs reimbursed for a 10-year period.
Application Requirements and Process
- Investment incentive certificate: Investors need to obtain this certificate from the Ministry of Industry and Technology. Applications are evaluated based on economic contributions and are generally finalized within 60 business days.
- Minimum capital and employment: To be eligible for a work permit and some incentives, a company must have a minimum paid-in capital of 100,000 TRY and employ at least five Turkish citizens within the first six months of operation.
Conclusion
Türkiye’s investment climate in 2025 offers significant opportunities for foreign companies, especially in high-potential sectors such as green energy, digital transformation, and R&D development. The combination of tax reductions, operational incentives, and government-backed funding mechanisms provides a solid foundation for sustainable business growth. International investors exploring opportunities in Türkiye can leverage these incentives to optimize their costs and boost their competitive edge in regional and global markets.