The Implementation Procedures and Principles Communiqué of the Local Development Initiative Program Has Been Published

In order to support local and regional development, reduce intra-regional and inter-regional disparities, utilize the potential of the regions, and enhance the level of technology production, the Communiqué on the Implementation Procedures and Principles of the Local Development Initiative Program (“Communiqué”) was published in the Official Gazette dated 09.07.2025 and numbered 32951. This Communiqué has been prepared based on Articles 385 and 394 of Presidential Decree No. 1 on the Presidential Organization and Article 7 of the Decision on State Aids for Investments, which was enacted by Presidential Decision No. 9903 dated 29/5/2025.

Investments to Be Supported

Within the scope of the Program, except for investments that have already been granted an investment incentive certificate and projects currently benefiting from public support programs, the following investments may be supported: entirely new investments, and capacity increase investments in existing facilities, provided that they meet the minimum requirements set out in the Program, and result in at least a 75% increase in current production capacity and at least a 50% increase in registered employment.

In this context, the Program introduction, call announcements, application collection, evaluation processes, and announcement of results will be carried out through the internet-based platform (“Portal”) developed by the Ministry of Industry and Trade (“Ministry”) for purposes of Program promotion, information dissemination, application, and announcement procedures.

Processes related to incentive procedures, monitoring, reporting, and completion of the Program will be managed through the Electronic Incentive Implementation and Foreign Capital Information System (“E-FCIS”), which is administered by the General Directorate of Incentive Implementation and Foreign Capital (“GDIIFC”).

Collateral Requirement

Applicants whose projects are approved by the Local Development Initiative Program Evaluation Committee (“Committee”), which is established with the approval of the Minister to evaluate applications on a project basis and to make support decisions within the scope of the Program, are required to submit a letter of guarantee amounting to 2% of the total fixed investment amount.

This letter of guarantee must be irrevocable and unconditional, and shall be delivered to the development agency (“Agency”) located in the region where the relevant investment will be implemented.

If, within one year from the date the investment incentive certificate is issued, fixed asset expenditures amounting to at least 10% of the investment are not made or if the investment is not completed, the guarantee will be converted into revenue on behalf of the Agency.

If the investment is duly completed in accordance with the procedures, the guarantee will be returned to the investor.

Call and Application Processes

The objectives of the Program, the investment areas to be supported, the eligible provinces for application, the timeline of the call, and implementation details will be determined by the General Directorate of Development Agencies and announced via the Portal.

The call announcement may cover all or only part of the investment areas listed in the Communiqué on the List of Local Investment Areas. In addition, certain requirements (e.g., minimum equity, investment amount, number of employees, production capacity, etc.) may be set for specific investment areas.

The Development Agency will evaluate the applications based on the following criteria: (i) whether the investment subject is among the eligible investment areas specified in the Communiqué, (ii) whether the minimum requirements stated in the call announcement are met, (iii) compliance in terms of form and content.

Applications that are deemed eligible or made eligible will be accepted, and the applicant will be required to upload the following documents to the system within 60 days:

• - Project feasibility report,

• - If applicable, protocol, letter of intent, or other supporting documents signed with the project partner,

• - Other information and documents specified in the call announcement.

For applications that are incomplete or contain errors, applicants will be granted a one-time extension of 10 days to make the necessary corrections.

Applications will be rejected in the following cases:

• - Applications not in line with the call announcement,

• - Failure to submit the required documents within 60 days,
• - Failure to make the necessary revisions within the 10-day extension period.

Evaluation of Applications

Projects with completed application processes will be evaluated by the Board of Directors of the Development Agency and the Evaluation Committee.

This evaluation will be carried out by considering the following criteria:

• - Significance in terms of local development, such as addressing local needs, creating new opportunities and sectoral diversity at the local level, introducing new technologies, and enhancing the local area's competencies and technological production capacity;

• - Utilization of local potential resources, including the use of existing physical and social resources and activation of idle resources;

• - Support for upstream and downstream sectors to improve the local production/service potential;

• - Ability to meet current or future critical needs of the country;

• - Reduction of import dependency in areas with foreign trade deficits (e.g., production of imported inputs, high value-added products in sectors facing raw material shortages and negatively affecting the current account balance, and ensuring supply security for products with insufficient production capacity);

• - Enhancement of technological capacity, including accelerating technological transformation in sectors, supporting the development of related industries, and enabling production using new-generation technologies with limited availability;

• - High value-added potential;

• - Ability to enhance the country's competitiveness across various sectors;

• - Innovative nature and potential to stimulate R&D activities;

• - Integrated production features that enable the utilization of raw material potential;

• - Sufficiency of the project owner's financial structure and technical capacity;

• - Projects supported by a purchasing commitment from a stakeholder or targeting products with sufficient, accessible, and growing market potential;

• - High export potential;

• - High employment capacity;

• - Short investment payback period;

• - Short project duration;

• - High investment amount;

• - High production capacity.

These characteristics will guide the assessment process for each application.

Projects are evaluated by the Committee, which is the final decision-making authority. The Committee consists solely of representatives from the Ministry. The Committee convenes with at least three members, including the Committee Chair, and decisions are made by a majority vote of at least three members voting in the same direction.

Each member scores the project out of 100 points. A project can be approved positively if more than half of the members give a score of 70 or above and the average score of all members for the project is at least 70.

Projects approved for support by the Committee will be announced through the Portal. The Committee’s support decisions are binding for the relevant units of the Ministry. For projects approved by the Committee, an investment incentive certificate will be issued by GDIIFC without requiring a separate application or evaluation.

Document Revisions

Investors may submit requests for changes to their projects through the E-FCIS system. If the request concerns only a price update without any change in the content of the investment—for example, if the prices of the same machines or equipment have increased—this will be approved directly by GDIIFC without any limit assessment. However, if changes involve adding or removing certain investment items, a calculation will be made considering the price increases from the year the project was first approved up to the year of the requested change. The total amount of the changed items will be compared to the original investment amount to determine whether it exceeds a ±25% threshold. If the change remains within the ±25% limit, it will again be approved directly by GDIIFC. After such revisions, GDIIFC will notify the Ministry of the changes within 10 business days.

Termination of Support

Support for a project under the Program may be terminated by the Committee if certain conditions occur. These conditions include, but are not limited to: the investor’s failure to submit requested information and documents to the Agency, GDIIFC, the General Directorate of Development Agencies, or the Committee on time or in full, hindering or obstructing access to investment implementation and management areas during monitoring visits, determination that the project is not being properly carried out, discovering that the information and documents submitted during the application phase were later found to be inaccurate or misleading.

However, except in cases where it is found that the information provided during the application process was false, the Committee may grant the investor a one-time period to correct the situation. If the obligations are still not fulfilled by the end of this period, the support may be terminated.

If the investor has previously applied to the Ministry for an investment in the same province and on the same subject under the Project-Based State Aid Decision dated October 17, 2016, and numbered 2016/9495, or for another implementation based on this decision, they will no longer be eligible to apply to the Program for the same investment.

Visibility of Supports

If the investor receives financial support from this program, they will be obliged to ensure that the support provided by the Ministry is visible and recognizable by everyone. In this context:

• - From the start of the investment and for at least 5 years after the investment is completed, all facilities, machinery, and equipment procured with the support must display the Ministry’s and Agency’s logos along with a statement such as: “This investment has been realized with the support of the Ministry.”

• - The investor may publish articles, make presentations, or participate in competitions domestically or abroad related to the project supported by this program. However, in such cases, a copy of the related work must be sent to the General Directorate of Development Agencies within 1 month.

Effective Date

This Communiqué, whose provisions are enforced by the Minister of Industry and Trade, entered into force on the date of its publication, 09.07.2025.