Investment Incentive Program in Turkey; Lessons for Iran in developing less developed regions

Investment incentives are measurable economic benefits that governments provide to specific firms or groups of firms with the goal of directing investment to targeted sectors or areas or influencing investor behavior. These incentives can be financial, tax, customs, social, and so on. Successful examples include Turkish Investment Incentives, which have been implemented since January 2012 and include a variety of incentives and support measures that support investors according to the program. The axes of the program include public, regional, macro, strategic and priority investment incentives, which are:

– General incentives include investments that meet a certain capacity and have a minimum fixed amount of investment.

– Regional incentives, those industries that should be supported through relevant incentives and are determined based on the province’s competitive potential and the minimum fixed amount of investment for each industry. In this program, Turkey is divided into 6 regions, each of which includes several provinces, and based on the intended divisions, incentives and support are allocated.

– Large incentives support macro and industrial investments at rates at a more favorable level than regional investments.

– Strategic incentives support investments that are based on Turkey’s business strategy and aim to reduce the current account deficit as well as reduce dependence on imports.

Priority incentives, within the framework of Turkey’s requirements, support priority investments such as tourism, mining, rail and maritime transport, pharmacy, etc.

Support measures in the Turkish Investment Incentive Program include tax exemptions, customs duty exemptions, and support measures for the payment of employer and employee insurance contributions. In addition to the above, support measures and support rates in the Turkish Investment Incentive Program contain the following lessons for the Iranian economy:

– The Turkish Ministry of Economy supports investors by paying part of the interest on the loan. This includes those loans that are borrowed for the purpose of financing the investment and for one year, and a maximum of 70% of the fixed amount of the investment registered in the relevant certificate, in which case up to a certain ceiling to pay part of the interest share. Supports loans.

– The Turkish Ministry of Economy, depending on the availability of government land in the area of ​​the investor, in accordance with the rules and principles of the ministry will transfer the land to investors.

Other support measures include VAT refunds to investors, which only include a strategic investment incentive program and are subject to an investment of at least 500 million Turkish lira, in which case VAT refunds on construction and construction costs will be refunded. It will be given.

– Due to Iran’s unique geographical location in the center of the Middle East, Asia and Europe and the vast and growing domestic market and rapid access to neighboring markets, a huge stock of trained manpower as well as a network of infrastructure developed throughout In the fields of telecommunications, energy, and road and rail transportation, it is essential that the design of investment incentive packages commensurate with regional and provincial potentials be put on the agenda.