Industry

Turkey offers incentives to support regional industry

June 3, 2025, 2:49 PM

Mehmet Kacır, minister of industry and technology, said incentives would include funding of up to 25 percent of machinery costs

Government unveils scheme
Pushing production beyond Istanbul
Companies eligible for $6m support

Turkey has unveiled an investment incentive scheme to foster industrial growth, with a key pillar of the programme to encourage a shift in production capacity away from the country’s main economic centre of Istanbul to underdeveloped regions.

Four sectors that have strong investment potential will be identified in each of Turkey’s 81 provinces, Mehmet Kacır, minister of industry and technology announced on May 31.

Investments that can boost foreign trade and accelerate the country’s digital and green transformation are to be prioritised, he said.

Among the incentives to be offered will be funding of up to 25 percent of machinery costs and 15 percent of investment outlays, with direct tax relief for new projects, the minister said. Corporate taxes will be reduced by between 20 and 50 percent, with companies eligible for up to $6.1 million of funding support.

“By offering an advanced regional incentive to 289 districts that are significantly less developed than the provincial centres, we will spread development and welfare more rapidly to the entire country,” Kacır said.

While the scheme will offer incentives to industrial projects across the country, additional incentives will be provided to companies prepared to establish their production base in regions away from the Sea of Marmara basin, including Istanbul.

Higher levels of assistance will be given to companies moving to districts identified as more disadvantaged.

Istanbul and its surrounding districts account for about 40 percent of Turkey’s industrial capacity, with more concentrated production around the inland Sea of Marmara, taking advantage of easier access to land, air and seaborne trade routes.

However, the region is a high-risk earthquake zone, prompting concerns that a major seismic event could cripple the economy.

The incentive scheme could solve one of the main issues facing industries in Turkey’s southeast, according to Mustafa Fidan, president of the Diyarbakır Organised Industrial Zone, in the southeast of the country.

“At the moment industry large and small is struggling to access finance. This is their biggest problem at the moment and some are going under,” he said. “Having government incentives is important as it shows the state sees how dire the situation is.”

With recent developments to end a long-standing conflict with Kurdish separatists in the southeast and the change of government in Syria, there is an increase in investor interest in the region, said Fidan, although uncertainty remains.

“There is huge potential due to our location bordering Syria but the details for the investment programme have not been fully formulated yet,” he said. “However, if Turkey can take a share of the rebuilding of Syria, our region will attract investment.”