United Nations Conference on Trade and Development (“UNCTAD”) has made a 2015 World Investment Report which indicates that Turkey has become the largest recipient of Foreign Direct Investment (“FDI”) in West Asia, ahead of the United Arab Emirates. Turkey has tried to establish a series of legislative reforms to facilitate the reception of foreign investment. One of these steps is Investment Support and Promotion Agency of Turkey (ISPAT) which is a showcase to catch foreign investors’ eyes. Most of states has started to regulate foreign investment issues with the aim of getting a share of the cake. In line with this idea, states have tried to attract foreign investors’ attentions by using Investment Incentive System which is another opportunity for foreign investors.
Investment Incentive System includes incentives that called support measures. These incentive tools generally contain; income tax withholding support, vat refund, free land allocation, social security premium support (employer’s share), social security premium support (employee’s share), tax deduction, customs duty exemptions and interest support. (Please see our related articles…) The information contained in this article is an explanation for the investors who need to have an idea about these support measures. The recent Investment Investment System in Turkey provides many of these support measures for foreign investments. One of these support measures is Social Security Premium Support that explained in this article.
Social Security Premium Support measure is separated in two ways according to classification of share. The first class is employee’s share and the other one is employer’s share.
Social Security Premium Support which is employee’s share stipulates that for the additional employment created by the investment, employee’s share of social security premium on portions of labor wages corresponding to amount of legal minimum wage, will be covered by the Ministry. The measure is applicable only for the investments to be made in Region 6 (Please see our related articles…) within the scope of an investment encouragement certificate. Moreover, this measure is available for 10 years.
The second class is employer’s share of social security premium required that for the additional employment created by the investment, employer’s share of social security premium on portions of labor wages corresponding to amount of legal minimum wage, will be covered by the Ministry. This measure is available up to 12 years.
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