Special Program For Incentives And Supports On Medium-High And High-Tech Sectors And Products

19.09.2019 - Elmas&Yeşiloğlu

Yesterday, the Turkish Ministry of Industry and Technology issued a Communiqué (the “Communiqué”) on the Code of Practice for Technology-Driven Industrial Move Program (the “Program”) as an extension of Turkish Government Investment Incentive Decision based on the Turkish Council of Ministers Decision Nr. 2012/3305 dated 15th June 2012 and Turkish Government Investment Incentive Decision on Project Base entered into effect further to the Turkish Council of Ministers Decision Nr. 2016/9495 dated 17th October 2016.

The Ministry will intensify supports and investments in medium-high and high-tech sectors and products! A priority product list shall be put together!

The Communiqué is aiming to determine the code of practice for conducting the Technology-Driven Industrial Move Program in order to increase the merchandise of high value-added products in the medium-high and high-tech sectors and products that are critical to the development of these sectors.

Project Supports of KOSGEB and TUBITAK shall benefit from the Program too!

This special Program aims to increase the production capacity of high-quality products in the country by intensifying supports and incentives granted by the Ministry of Industry and Technology (the “Ministry”) and it's affiliated/related incorporations to medium-high and high-tech sectors and products. In this context, investment incentives provided by the Ministry for the Priority Product List determined by the Ministry considering various criteria such as reducing import dependency, concentration of competition, domestic production competencies, development trend of global demand and future potential together with project supports given by KOSGEB and TUBITAK are granted within a “sole window mechanism”. It is aimed to realize investment projects that will contribute to the technological development needed by our country with an end-to-end governance and support model within the scope of the Program.

All applications will go through a sole window mechanism!

The Priority Product List shall be published by the Ministry through a special communiqué. However, the above-given criteria shall be taken into consideration while assembling such a list. Applications, evaluation, and monitoring processes within the scope of the Program shall be conducted through a program portal to be run by a program management office to be established by the Ministry, which will be assigned to coordinate all actions in relation to investment projects to be supported within the Program and to conduct the related secretarial work. The program portal shall be a web-based application to be specially developed by the Ministry in coordination with it’s affiliated/related incorporations, which will work on the “sole window mechanism”.

Project stakeholders are sought for investors, who will benefit from the Program!

The investor, who will benefit from the support under the Program, is expected to cooperate with one or more project stakeholders. Project stakeholders can be any public institutions / organizations or medium or large-sized businesses resident in Turkey acting with the intention to cooperate with the investor to buy the product, which will benefit from the Program.


Items required for the eligibility and information / documentation that need to be submitted by the project stakeholder are listed under the Communiqué. However, at least, the project stakeholder must have the technical steering capacity and purchase requisition for the product to be produced.

Beginning with a letter of intent as in a typical mergers and acquisitions transaction!

It seems that this process will also begin with a letter of intent as in a typical mergers and acquisitions transaction. Nevertheless, there will be standard forms for such a letter of intent to be uploaded under the Program Portal. Namely, a consensus protocol between the applicant and the project stakeholders, in which the stakeholder specifies its will and intention to purchase the priority product, shall be signed by completing the consensus protocol published in the Program Portal and the stakeholder declaration form. If the project stakeholder is a public institution / organization, it is not necessary to submit a consensus protocol and it is sufficient to obtain a letter indicating the intention of the stakeholder to purchase the priority product. This tool seems to be a convenience for the investor and its potential stakeholder, however, certainly in sophisticated investments the parties would be freely entitled to support such standard forms with back-to-back agreements.

Calls for the Priority Product List shall be announced by the Ministry!

The Ministry shall be calling applicants for benefiting from the Program by placing announcements from time to time within the Program Portal as per a calendar to be determined by the Ministry. However, only equity companies resident in Turkey shall be entitled to apply to the Program. As its known, as part of Direct Foreign Investment policy of Turkey, foreign investors having a residence in the country are not differentiated from Turkish investors since 2003.

Each project will require a project feasibility study and an independent audit report!

The Ministry requires that each project that will benefit from the Program submits a project feasibility report to include matters prescribed by the Ministry. Additionally, applications without an independent audit report to be conducted by one of the independent audit / consultancy companies to be assigned by the Ministry shall be deemed to be rejected if such a report would not be uploaded within the Program Portal as per the calendar announced by the Ministry. Similar to project feasibility reports also independent audit reports shall be required to include certain matters listed in the Communiqué.

TUBITAK and KOSGEB Projects shall be evaluated based on certain criteria and specific rules!

Research and development supports shall be given by TUBITAK within TUBITAK supports program, which will be evaluated by TUBITAK as per terms and conditions stipulated in the relevant legislation.  If the applicant to the Program is a middle-size company, it will only benefit from the Program within KOSGEB strategic product supports program. Such applicants have (i) to conduct their activities within sectors announced by the Turkish Ministers of Council Nr. 2009/15431 dated 5th of August 2009, (ii) to be established at least within one year prior to the Program application; and (iii) to cooperate with a project stakeholder.

Projects that will benefit from the Program will be decided by the Ministry’s committee specially established for the evaluation of the applications made within the Program.