INCENTIVES
GRANTED TO SMALL AND MEDIUM SIZED
ENTERPRISES’ (SMSEs) INVESTMENTS |
| (Pursuant
to Decree No/ 2000/1822 dated: December
21, 2000) |
| Last
updated on March 21, 2005 |
A |
What is a medium or small-sized
company? |
Companies operating in
the manufacturing, agro-industry, tourism,
education and health, mining, software industries
with 250 or less employees are called small
or medium-sized enterprises (SMSEs):
Number
of employees |
Definition |
1-9
|
Micro-sized |
10-49
|
Small-sized |
50-250
|
Medium-sized |
An addition, besides the
above employment figures, companies operating
in the manufacturing
and agro-industrial sectors
are required to own tangible assets (excluding
land and building) including
worth YTL
950,000 or less.
B |
What incentives are granted? |
SMEs making fixed investments
benefit from the following encouragement elements:
a) Exemption
from Customs Duties
b) Value
Added Tax Exemption for imported and domestically
purchased machinery and equipment
c) Credit
allocation from the General Budget
The SMSEs’ purchase
of machinery-equipment and raw materials are
supported by the State by means of an incentive
certificate granted by the Undersecretariat
of Treasury.
In order to be eligible for the incentives,
machinery-equipment and/or raw material investment
subject to the Incentive Certificate can not
exceed YTL 950,000.
The potential investors
are to apply to
-
Turkish
Development Bank for the investments to
be made in the tourism, education, health
and agro-industry,
-
Halkbank
or Turkish Industrial Development Bank for
the other sectors.
The relevant branch of
the assigned intermediary bank receiving the
application is to evaluate the project in
question and upon the intermediary bank’s
approval, the necessary documents are submitted
to the Undersecretariat of Treasury for the
issuance of an incentive certificate following
a final evaluation.
Thus, the holder of such
document becomes eligible for tax exemptions
mentioned above.
D |
How are credits granted? |
The parameters with regards
to the credits granted to SMSE investment
projects are presented below.
i)
Interest rates: There
are certain ceilings applied to the interests
for credits to be granted:
|
Credit Type |
Region |
Interest
Rate (ceiling) |
|
Investment |
Priority
Development |
10% |
|
Other |
15% |
|
Operational |
Priority
Development |
15% |
|
Other |
25% |
ii)
Ceiling for the amount of credits to be granted:
Credits
for investment projects in these two sectors
are capped as follows:
a) Maximum
amount of Credit in percent of the fixed investment
cost*
|
|
Priority
Development
Region |
Normal Region |
Developed
Region
|
|
Micro-sized |
60% |
50% |
40% |
|
Small-sized |
50% |
40% |
30% |
|
Medium-sized |
40% |
30% |
20% |
(*) Applicable only to the
manufacturing and agro-industry sectors
b) Maximum amount
of credits in YTL terms
|
|
Credit Type |
Maximum Amount
of Credit (in YTL) |
|
When only one type of credit
is granted (either 'investment'
or 'operational')
|
Investment
|
475,000 |
|
Operational |
75,000 |
| When both 'investment' and'operational' credits are granted |
Investment
|
475,000 |
|
Operational
|
190,000 |
Applicable to all investments made
by SMSEs.
iii)
Maturity period:
The credits granted are to be paid back to
the creditor within a period ranging between
2 and 4 years depending on the nature and
location of the investments:
|
Credit Type |
Maturity Period
(in years) |
When re-payment starts |
|
Investment |
4 |
1
year from the use of credit |
|
Operational |
2 |
Immediately |
|
