- 21 February 2020
- Posted by: ayberk
- Category: Invest in Turkey
Turkey has an important potential for the concept of mining investments. There are many rich reserves of mineral and Turkey is to become a center of attraction for foreign investors in the mining sector.
In this article, we’ve given information about the incentives provided to investors with some of the basic legal conditions for foreign investors related to the search for mineral resources extraction in Turkey.
The Mineral Resources of Turkey
Turkey is located on the part of Tethy-Eurasian Metallogenic Aqueduct, as well as having the potential mining of various mineral resources and ranked tenth in the world in terms of the diversity of mine. The main mineral resources in Turkey are boron, marble, kaolin, bentonite, halloysite, magnesite, clay, perlite, wollastonite, gold, silver, copper, zinc, antimony, manganese, iron, chromium, mercury, amethyst, zeolite and lignite.
According to Article 6 of the Turkish Mining Law, the mining rights are given to Turkish citizens and Turkish legal persons. However, foreign investors can acquire the same mining rights as Turkish citizens or legal entities by establishing a Turkish company to obtain mining licenses and permits. Related Articles of Association of the Turkish legal entity, shall ensure that conduct mining activities in Turkey. In terms of mining applications, operating in Turkey, according to Turkish law and the Turkish capital to companies carrying out mining activities by foreign investors, they are given the same rights as other Turkish companies.
Turkish Government intents on increasing the mining avtivities and works on some regulations about mineral exploration and mine hoisting in Turkey. With the required reforms, Turkey still needs to be done within the legal framework is expected to move to a higher level with this objective.
The government has announced in recent years that the country will use its natural resources to the maximum and focus on mineral exploration, processing and extraction activities to add value to the economy by reducing mine imports. Turkey aims to move national export volume of 500 billion dollars in 2023 to the mining sector and the export share of the 15 billion dollars in mining and relevant secots.
In this context, Turkey, foreign investment in the mining sector in particular performed as evidenced by the creation of a comprehensive incentive policies encouraging. Moreover, Turkey in order to reduce dependence on energy aims to increase electricity production by lignite and coal-fired power plants. This situation shows that foreign investments will be needed especially in operating rich lignite deposits.
Are there any restrictions on foreign capital companies relating with the exploration and extraction of mineral resources in Turkey?
As mentioned above, exploration and extraction licenses are granted only on behalf of natural persons or legal entities. Foreign legal entities cannot have direct mining rights. Foreign investors, for mining activities in setting up a company in Turkey with the mineral exploration and extraction licenses and permits to mine is able to obtain the same rights that the Turkish investors. Therefore, there are no restrictions applied to Turkish companies with foreign capital.
Are there any restrictions or restrictions on the sale, export and import of extracted or processed mines?
According to the Mining Law, there is no general restriction on the export or import of minerals. In this context, Customs Law No. 4458, Customs Regulation No. 4875, Foreign Direct Investment Law, Foreign Exchange Legislation etc. The general provisions of the export and import legislation that apply are implemented.
What are the Incentives Provided by Government?
The Ministry of Economy also provides incentives for foreign investments to reduce regional development disparities, increase value-added investments, improve production and employment figures and expand R&D efforts that increase international competitiveness.
Customs Duty Exemption
The machinery and equipment to be imported for the investment that will benefit from this incentive are exempted from customs duty.
For the investment that will benefit from the incentive, purchased machines and equipments are exempted from VAT.
Employer’s National Insurance Contribution Incentive
The insurance premium employer’s share accrued as a result of additional employment created within the scope of the investment is paid by the Ministry, provided that it does not exceed the minimum wage per employee.
Income and corporate tax is paid at discounted rates at the rates stipulated separately for the investment areas.
Investment Place Allowance
In investments made with an incentive certificate, in some cases, investment place is allocated to speed up the investment.
Interest rate reduction support is provided for investment loans with a maturity of at least one year to be used within the scope of regional investment incentives.