Quake-hit cities to get investment support


The scope of the Attraction Centers Program, which is aimed at making up the development disparities between regions and is implemented in 24 provinces currently, will be enlarged to cover all cities hit by twin quakes. The regulation announced by President Recep Tayyip Erdogan last week will be upgraded with a Presidential decree. Investments in Adiyaman, Diyarbakir, Malatya, and Sanliurfa are already supported as part of the program. Adana, Gaziantep, Hatay, Kahramanmaras, Kilis, Osmaniye, and Elazig will be included in the program with the new regulation.

A proposal for these cities to benefit from the Region 6 incentives was previously brought to the agenda to recover the quakehit region. However, no change was made for the incentive regulation as regions are determined in line with the ranking of cities in the socio-economic development index.

Businesses that benefit from the Attraction Centers Program are provided with all support elements given for Region 6 in the current investment incentive regulation.

The Attraction Centers Program stipulates a support program to promote private sector investments for reducing inter-regional development disparities through the hike in employment, production, and exports by stimulating the investment environment in the less developed regions. Here are the supports given for investments:

► 30% of energy expenses are met for three years during the operation period if they don’t exceed TRY 10m.

► The Value-Added Tax (VAT) for machinery and equipment purchases and customs duty for imported machinery are exempted.

► The Corporate Tax is levied with a 90% deduction in line with the 50% investment contribution rate.

► The social security premium paid by the employer and the employee will be subsidized for ten years.

► The land for the investment will be allocated by the government.

► A discount of seven points for TRY loans and two points for FX loans are given with an upper limit of TRY 1.8m.

► The VAT is refunded for the construction expenditures towards investments in the manufacturing industry.

► The constructed buildings will be exempted from the building tax for five years and the land tax until the end of the incentive period.

Moreover, President Erdogan also announced that KOSGEB (Small and Medium Enterprises Development Organization) payments will be cancelled for 2023 in the quake-hit provinces. All KOSGEB debts of those who died due to the earthquake will be written off. The public banks have recently started implementing special support programs for the region, while the Banking Regulation and Supervision Agency (BDDK) recommended to banks to facilitate payments in the disaster-hit region.

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