INCENTIVES OF TURKEY

Turkey is a peninsular country surrounded on three sides by sea which, because of its geographical position on the Eastern Mediterranean, links Asia with Europe and which has an area of 774,815 km² and a population of 70 million (most of whom young and well educated).

Turkey provides various incentives and grants to the investors for the purpose of facilitating larger investments and capital contributions by the local and foreign investors and eliminating regional imbalances. 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.

A. INVESTMENT 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;

· Investment allowance

· Exemptions from customs duties and fund levies

· VAT exemption for machinery and equipment

· Exemption from certain taxes, duties and fees

· 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 a minimum equity ratio of 20% and minimum value of 600.000 YTL (USD420K) for the developed regions, 400.000 YTL (USD285K) for the normal regions and 200.000 YTL (USD140K) for priority development regions, and regional requirements to be granted with an incentive certificate.

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 east, south east, east central 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.

1. Investment Allowance

This incentive provides deduction of 40% of purchase price of the brand-new fixed asset purchases exceeding 500,00 YTL, from the corporate tax base. Incentive certificate is not required for investment allowance. Taxpayers are allowed to apply the investment allowance to their corporate income automatically, provided that the qualifications of the fixed asset(s) purchased meet the criteria set forth in the Law. The investment allowance system does not have an impact on the depreciation. In other words, investment allowance is given in addition to the depreciation of the asset for tax purposes.

2. Exemptions from Customs Duties and Fund Levies

This incentive measure ensure that the imported machinery and equipment within the scope of an incentive certificate are imported to Turkey with full exemption from custom duties and fund levies. Since most machinery and equipment imported from EU has been exempt from customs duties due to the customs union, this exemption applies to imports from outside the European Union.

3. VAT Exemption for Machinery and Equipment

Machinery and equipment within the scope of incentive certificate, both imported and purchased from domestic market, are exempt from VAT.

4. Exemptions from Certain Taxes, Duties and Fees

The investors who undertake an export commitment of USD 10,000 upon the completion of the investment are granted exemptions from stamp taxes, duties, and fees related to the company establishments, land registration, capital-in kind contributions transactions. There are also exemptions from taxes on credit charges for investment credits with at least one-year term.

5. Subsidized Credits

Credits may be granted to following investments based on certain criteria;

· Research and development

· Environmental protection projects

· Priority technological investments determined by the Science and Technology High Council

· Investments in technology parks

· Regional development investments

6. Regional Investment Incentives

For the purpose of increasing the new investments and employment opportunities in provinces where the per capita share of GDP is USD 1,500 or less, following incentives has been provided to the investors to be applied on regional basis;

· Cancellation of all or up to 80% of the salary withholding taxes of the newly hired personnel (applicable until end of 2008)

· Treasury pays all or up to 80% of the employer’s share of social security premiums for the newly hired personnel (applicable until end of 2008)

· Reimbursement of 20%-50% of electricity bills by the Treasury to the investors, depending on the number of the new employees hired. (applicable until end of 2008)

· The allocation of Free Public Land as Investment Sites

B. EXPORT INCENTIVES

Current export incentive measures indirectly assist the exporters through extending export credits and insurance and providing some aids for certain export related expenses. There are also exemptions from taxes, charges and fees.

1. Export Credits

Turkey’s efforts in promoting exports are mainly concentrated on facilitating credits through Turk Eximbank (the export credit bank of Turkey) to exporter companies or to the manufacturers of export goods. Turk Eximbank has fully adapted its credit conditions to that of EU after the customs-union agreement. Exporters may obtain pre-export loans both in YTL and foreign exchange.

2. Exemption from Taxes, Duties and Charges

All types of export credits, including letters of guarantee, letters of credits and all other export-related transactions are exempt from all taxes and charges.

3. Insurance of Export Receivables

Turk Eximbank insures receivables of exporters, which are derived from export proceeds, against commercial and political risks. Exporters, who have their export proceeds insured, may also use these insurance policies as collateral in obtaining export loans from other commercial banks.

4. Exemption from VAT and Customs Duties for Raw Materials and Intermediary Goods

Import raw materials, intermediary goods, packaging materials to be used in the production of goods to be exported are exempt from customs duties, VAT and other charges. A letter of guarantee is submitted to the customs authorities during the importation of these materials, which is returned to the exporter when the goods are exported.

5. State Aids for Certain Expenses

State aids are provided for, management and promotional expenses for new foreign offices, registration expenses of patent and other industrial property rights, personnel training expenses, trade fair and show expenses. However, these subsidies are only minor measures.

6. Inward Processing Regime

The “Inward Processing Regime” has been planned in order to boost the export by providing raw material from abroad, to reinforce the export goods in international markets, to develop the export market, and to enhance the export goods.

C. FREE TRADE ZONES

Turkey has had a very attractive application of Free Trade Zones (FTZ) until recently. FTZ were known to be the regions where a more attractive investment climate is offered to investors. The most important advantage given to investors in the free trade zones was the exemption from all kinds of taxes. Profits derived from commercial activities in the zones were exempted from corporate and any other income taxes. Furthermore, salaries paid to employees working in the zones are exempted from income tax.

D. TECHNO PARKS

Law no 4691 concerning Technology Development Regions has granted significant advantages to investors who will carry out research and development activities in the science and technology field in special zones, known as techno parks. The incentives provided to techno parks are as follows;

· The earnings derived from the software or products developed as a result of the research and development activities are exempt from corporate income tax for 5 years following the establishment of a techno park.

· The salaries of researchers, software developers, and research and development personnel are exempt from income tax for 10 years following the establishment of a techno park.

E. RESEARCH AND DEVELOPMENT (R&D) INCENTIVES

1. State Aids for R&D Activities

The state aids for R&D activities comprise a mix of reimbursement of certain expenses and grant of Subsidized credits. The R&D activities to benefit from state aids are the following;

· Concept development

· Technological and economic feasibility studies

· Design and drawing studies

· Prototype production

· Establishment of pilot facility

· Pilot production

· Patent and license studies

· Post-sales solutions studies for problems arising from product design

· Laboratory studies in the transition stage from design to implementation

The personnel expenses, cost of machinery, equipment and software, consultancy and other service fees, fees paid to scientific institutions, registration fees for patent and industrial designs to the Patent Institution, cost of R&D related materials are reimbursed up to 60%, as a State aid to the R&D activities. State aid is provided for 3 years for each project.

2. Corporate Tax Deferral

For the purpose of encouraging the companies to engage in R&D activities, Corporate Tax Law provides a deferral of 20% of corporate tax, not exceeding the annual R&D activities of the taxpayers in a tax year. The deferred tax is payable in 3 years in equal installments, free of interest.

ALL INCENTIVES MENTIONED ABOVE ARE AVAILABLE IN AKSARAY

E-mail: 68info@icisleri.gov.tr

ADVANTAGES OF AKSARAY

REGIONS THAT CAN BE REACHED FROM AKSARAY

1. Investment Climate

Aksaray, situated in the very middle of Turkey, has many attractions for investors. With the proclamation of the republic, the company “The Resolution of the Nation” (in Turkish “Azm-i Milli”) was set up and this formed the basis of the future industry of Aksaray (1920’s). This company was based on the German technology, and by producing its own electricity, it not only provided extra electricity to itself, but also gave an extra support in electricity to the city. The contribution to the high level of “industrial culture” in today’s Aksaray was made by “The Resolution of the Nation” Company and Mercedes-Benz Turk Inc. and The Organized Industrial Zone. With the help of this “industrial culture” in Aksaray, opportunities for foreign investors have become widespread and the people of Aksaray have accepted foreign investors more easily.

Transportation: Aksaray is very close to the air, maritime, and railway transportation points (60-220 km.). In land transportation Aksaray has many advantages. The high way that connect the western parts to the eastern parts and the one that connect northern parts to the southern parts are all here in Aksaray.

Geographical Situation: Aksaray, situated in the very middle of Turkey, is on a wide plain. This area receives the least rain in Turkey. It has the typical characteristics of a climate of inner lands - cold in winters, hot in summers.

Energy Resources: Aksaray does not have an energy problem. Natural gas is available. Jeo-thermal (vapor) as an extra energy resource will soon be available too.

The Availability of the Public Organizations: All organizations that are necessary for manufacturing, environment, customs, export & import etc. are available in Aksaray.

Industry and By-Industry Branches: Mercedes-Benz Turk Inc. has a truck factory in Aksaray. And there is a by-industry of automotive. And main industries of metallurgy, textile, and food are all available in Aksaray. And from the point of view of “Just-in-time” production, Aksaray has many advantages.

Human Resources and the Potential of Qualified Personnel: For the investors, the availability of qualified staff plays a crucial role in the decisions of the investors. Aksaray does not have a qualified personnel problem. There are many courses to train the required staff in Aksaray. Adults can be educated after studying at school by private and state sectors. Furthermore technical high schools and universities offer education on demand of investors.

The Proximity to Raw Materials: Especially those sectors in which transportation has a greater cost, the location of the company plays a great role in the decisions of the investors. Aksaray has many advantages in closeness to raw materials.

Potential for Agriculture and stockbreeding: Aksaray which is situated in the middle of vast plateau, is also a centre of agriculture, horticulture and stockbreeding. By-branches of industry based on agriculture are suitable a specially organic agriculture in terms of food industry. All the incentives mentioned above are also applied in agriculture, horticulture and stockbreeding.

The Aksaray Organized Industrial Zone (OIZ)

Why is Aksaray OIZ an Ideal Center of Your Investment in Turkey?

· Its distance to local, national and international hubs,

· Its distance to the market,

· Support for innovative service and production of goods,

· Potential for qualified manpower,

· All incentives in Turkey mentioned above are available in Aksaray

Some advantages Aksaray OIZ brings are;

·Low prices for the electricity and gas per unit,

·Use of permanent electricity. The electricity network of OIZ is underground and it has a substitute.

·Low prices for water and waste water per unit,

·OIZ has ISDN and adsl lines, (telephone & internet)

·The roads at OIZ have high way standards.

·Under the framework of law 5188, OIZ established private security forces to ensure the outer security of the zone

·Snow shoveling, clearing of the roads, collection of solid waste, applying insecticides, planting trees free of charge and international guidance are some of the services offered to OIZ.

· Industrial plots are leased when the acceptance criteria are fulfilled.

· The geological structure of the region is very strong.

Industrial Area

Under constructing with Mercedes-Benz Turk A.Ş.

TOURİSM & HISTORY OF AKSARAY

Aksaray From Past To Today

Aksaray, history of which dating back to Christ 8.th thousand, coming up to now preserving all its civilizations cultural existence, with natural beauty and with being trade centre, has not lost importance from any period. Aksaray as being a door to Capadoccia, with cultural existence also with natural richness has been offering visitors different holiday possibilities. Aksaray is in Middle part of Anatolia and also one of the most important centre of historical Silk Road. Aksaray is located on junction of east-west and north-south connected roads. Aksaray with Güzelyurt, Ihlara Valley, Sultanhanı, Crooked Minaret, declared as Winter Sports Tourism Centre Hasandağı and with Ziğa Hot Springs have been one of the most attractive centres in middle part of Anatolia.

Ihlara Valley

Hasandağı and its surrounding has have been in existence since the time of Neojen and IV. Hasandağı, as spraying volcano and result of tectonic movement has been coated with surrounding surface volcanic layer.

Ihlara Valley, with its old name “Peristrema” from Ihlara town up to Selime the length of which comes up to 14 km., goes as the place expands to 80 m. In Valley there are 5000 settlement places and 105 churches. At present there are 14 churces to be visited.

Ihlara valley is located in region of Capadoccia. In valley there are many ornamented churches that have been into carved the rocks by the people lived there and crusader of Christianity, rich with Melendiz Brook and valley sides, with plant cover and wild life.

Region’s Cuisine

As production of grains spreads around Aksaray there are many kinds of food made from these grains. As stockbreeding have been developed, it is reflected to food culture. These regional dishes are bun, şepe, vermicelli, couscous, fermented, stuffed meat pasty, with onioned, sarığıburma, höşmerim.

Accommodation: All the hotels from one to four stars are available in Aksaray. You can make reservation through the internet or get into contact with tourism information bureau

BEFORE YOU RETURN, DON’T FORGET YOU

Visit Ihlara Valley and (made of red bricks, just like Pisa Tower) Güzelyurt,

See Crooked Minaret,

Taste trout in Helvadere,

Taste food in frying-pan at Ihlara Valley

Buy Taşpınar Carpet

Watch Ihlara, Old and New Gelveri Festivals arranged at Güzelyurt in between 15–30 August

You must come, see and investigate its Historical, Touristic, Culturel and Natural Beuty of Aksaray.

Municipality of Selime with historical place, hot springs and Melendiz brook going from centre of city and with marvelleous air,drinking water and with greenery. For these reasons, this place is used by people as picnic erea ecpecailly in summer season. There are hundreds of tourist attractions, historical and touristic places in Selime. For investors Selime,Uzunkaya and Çeltek could be adviceable for any kind of investment especially for entertaintment tourism. These places are in the region of Capadocia, and 30 Km.far away from Aksaray. Also adviceable 65- for investment as entertaintment tourism could be areas of Altınkaya, Sariyahşi,Ağaçören and around Salt Lake. As a smooth area, Sultanhanı(Famous city with its carpets and on the way of Silk Road with its historical and Selcukian Sultan Caravanies and Eskil, Eşmekaya are famous with their bird paradise could also be adviceable for investers.

HASANDAĞI

Hasandağı with its height 3268 mt. is the second highest mountain in middle part of Anatolia and has volcanic structure, it is covered with oak forest up to 1750 mt. Far away from Aksaray 28 Km and 15 Km to Ihlara and close to E-90 Highway. There is no problem of connection. Road has been opened up to Skiing Cente. Electricity and drinking water have been connected.

HEALTH(HOT SPRING) AND OPPORTUNITIES OF MOUNTAIN TOURISM:

Hot Springs:

When it is said Thermal Tourism in Aksaray firstly ZIGA HOT SPRING comes to in mind it is for away 35 Km from Aksaray, on the way to Ihlara. There are thosands of people around visiting this place especially in summer season and they stay there. If not reserved before there is no possibility to find accommodation.

People coming here firstly take benefit against rheumatism diseases, defection of metabolism, digestive system diseases, skin diseases, eye diseases and gynaecological diseases with neuralgia, broken-prominent and people coming here have opportunities to visit historical and natural beauty of Ihlara Valley.

Water of Zıga Hot Spring contains group of Sodium Chlorine, Sodium bicarbonate and Calcium carbonate. In water there is between 200–250 mg. free Carbondioxide. One of the benefits of it that it is rich of iodine and bromine. Water is extracted from 234 meters with its temperature 47 degree with 150 lt/scnd. İnterms of temperature, water can be prouped into hot waters. despite insufficient establishment a 200-bed hotel and a cure center will be built there. Project is ready, will be adjudicate as system of Built-Manage-Return.