Introduction: What Should a Foreign Investor Check Before Building a Factory in Turkey?

Turkey remains an important manufacturing location for international investors seeking access to the European, Middle Eastern, North African and Central Asian markets.

Its industrial infrastructure, customs integration with the European Union for many industrial products, developed automotive and machinery supply chains, organized industrial zones, large workforce and investment incentive programs make the country particularly attractive for manufacturing projects.

However, establishing a factory in Turkey is very different from incorporating an ordinary trading company.

A foreign investor can establish a Turkish company relatively quickly.

A factory project, by contrast, may require legal analysis concerning:

land ownership → zoning → Organized Industrial Zone rules → environmental impact assessment → construction permit → occupancy permit → workplace opening and operating licence → environmental permits → utility connections → fire and occupational safety → sector-specific production permits → foreign employee work permits → Investment Incentive Certificate → machinery imports → tax and social security incentives.

The order of these steps matters.

A foreign investor may purchase land worth millions of euros and later discover that the intended manufacturing activity is not permitted under the applicable zoning plan.

The investor may sign machinery purchase contracts before determining whether the machinery can benefit from an investment incentive.

A factory may complete construction but still be unable to start commercial production because its environmental or workplace licence has not been obtained.

For environmentally sensitive projects, the risk is even greater. Under Turkey’s Environmental Impact Assessment framework, projects falling within the applicable EIA regime cannot receive certain approvals, construction/use permits or commence investment until the required “EIA Positive” (ÇED Olumlu) or “EIA Not Required” (ÇED Gerekli Değildir) decision has been obtained.

Foreign investors should therefore approach factory investment in Turkey as a regulatory project, not simply a real estate and construction project.

The safest strategy is:

Choose the location only after confirming that the factory, production process and incentive structure all work together legally.

This guide explains the principal permits, approvals and investment incentives a foreign manufacturer should check before committing to a Turkish factory investment in 2026.

1. Start With the Manufacturing Activity, Not the Land

The first question should not be:

“Where can we find cheap industrial land?”

The first question should be:

“What exactly will the factory manufacture, using which process, at what annual capacity?”

This determines much of the regulatory analysis.

For example, a factory assembling electronic equipment may be regulated very differently from a facility producing:

• chemicals;
• batteries;
• pharmaceuticals;
• food products;
• steel;
• cement;
• automotive components;
• plastics;
• paint;
• medical devices;
• fertilizers;
• recycling products;
• or defence equipment.

The following factors can change permit requirements dramatically:

production capacity, raw materials, emissions, wastewater, hazardous chemicals, energy use, waste generation, storage volumes and product category.

Before selecting a site, the investor should therefore prepare a basic technical investment file identifying at least:

• planned products;
• NACE/industrial classification;
• annual production capacity;
• production flow;
• raw materials;
• machinery;
• electricity and natural-gas demand;
• water consumption;
• wastewater;
• emissions;
• waste;
• hazardous materials;
• storage;
• number of employees;
• and intended export markets.

That technical description should then be tested against Turkish zoning, environmental and incentive rules.

2. Should the Factory Be Built in an Organized Industrial Zone?

For many foreign manufacturers, an Organized Industrial Zone — Organize Sanayi Bölgesi (OSB/OIZ) should be one of the first location options investigated.

Turkey’s official investment guidance describes OIZs as industrial areas designed to provide companies with ready infrastructure such as:

• roads;
• water;
• natural gas;
• electricity;
• communications;
• wastewater treatment;
• and other industrial services.

This can materially simplify greenfield factory development.

A factory built on isolated non-industrial land may require the investor to solve infrastructure questions independently.

Inside an established OIZ, many of those systems are already planned for industrial use.

3. OIZs Can Also Provide Additional Financial Advantages

Location affects not only licensing but also operating cost.

Turkey’s official investment guidance identifies additional advantages available in OIZs, including benefits such as VAT advantages on qualifying land acquisitions, a five-year real estate tax exemption following completion of factory construction and lower costs for certain infrastructure services such as water, natural gas and telecommunications.

The precise availability of each benefit should be confirmed for the specific transaction and OIZ.

An investor should therefore compare locations based on:

land price + incentive region + infrastructure + logistics + labour + permitting + tax incentives.

The cheapest land is not always the cheapest factory.

A more expensive OIZ parcel may produce a lower total investment cost if it substantially reduces:

• infrastructure spending;
• licence risk;
• environmental treatment costs;
• utility connection delays;
• and operating expenses.

4. OIZs Can Simplify the Construction and Licensing Authority Structure

One practical advantage of an OIZ is that the OIZ administration itself performs important regulatory functions.

Under the OIZ framework, construction permits, building-use permissions and workplace opening and operating licences within the zone are issued and supervised through the OIZ under the applicable zoning and licensing legislation.

This can make the authority map considerably clearer than a project involving multiple ordinary municipal structures.

A foreign investor should nevertheless obtain written confirmation from the relevant OIZ concerning:

• whether the planned activity is permitted;
• parcel allocation conditions;
• construction deadlines;
• building parameters;
• infrastructure capacity;
• wastewater acceptance;
• electricity demand;
• natural-gas connection;
• and any sector-specific conditions.

Never rely solely on an estate agent saying:

“It is industrial land, so any factory can be built.”

Different industrial activities can still face different OIZ and environmental restrictions.

5. Foreign-Controlled Turkish Companies Should Check Special Real Estate Procedures

A Turkish company with foreign shareholders is legally a Turkish company.

However, Article 36 of the Land Registry Law creates a special regime for certain foreign-controlled Turkish companies.

Current official investment guidance states that where foreign investors hold 50% or more of the shares, or have the right to appoint or remove the majority of the board, the company falls within the relevant foreign-capital real-estate framework and may need to follow the applicable governorship procedure when acquiring real estate for activities specified in its articles.

There is an important practical exception.

Official guidance states that acquisitions in:

organized industrial zones, industrial zones, technology development zones and free zones

do not require the same prior governorship permission procedure.

This can be another significant reason why an OIZ is attractive to a foreign manufacturer.

6. Conduct Full Land and Title Due Diligence Before Purchase

Whether the factory is inside or outside an OIZ, the investor should conduct legal due diligence on the land.

At a minimum, counsel should verify:

• registered owner;
• parcel boundaries;
• mortgages;
• attachments;
• injunctions;
• easements;
• usufruct rights;
• expropriation risks;
• zoning status;
• permitted industrial use;
• floor-area ratio and building conditions;
• access roads;
• utility easements;
• environmental restrictions;
• agricultural or forestry status;
• protected-zone status;
• and relevant security-zone restrictions.

Official Turkish investment guidance specifically recommends checking mortgages, liens and similar title restrictions before proceeding with property acquisition.

For a factory, zoning due diligence must go beyond confirming that the title deed says “land.”

The investor needs confirmation that the specific industrial activity can legally operate on that parcel.

7. Check the Environmental Impact Assessment Before Buying the Land

Environmental Impact Assessment — Çevresel Etki Değerlendirmesi or ÇED — is one of the most important factory-development issues in Turkey.

The current EIA system separates projects according to the lists and thresholds contained in the EIA Regulation.

Projects within the relevant Annex I framework undergo the full EIA process.

Projects falling within the other relevant screening framework may receive either:

“EIA Required”

or

“EIA Not Required.”

The required procedure depends heavily on:

• sector;
• production technology;
• capacity;
• raw materials;
• and environmental impacts.

The Ministry defines EIA as the process of identifying positive and negative environmental effects, identifying measures to prevent or minimize harmful effects, evaluating site and technology alternatives and monitoring the project.

For a foreign investor, this analysis should occur before final land commitment.

8. Why EIA Timing Is Critical

Turkey’s current EIA framework contains a particularly important rule.

For projects subject to the Regulation, an investor cannot obtain the relevant incentive, approval, permit, building or use licence or begin the investment before obtaining the required EIA Positive or EIA Not Required decision, although applications for the other permits can proceed in parallel.

This makes environmental review a critical path item.

Example

A foreign chemical group:

1. buys the land;
2. signs a construction contract;
3. orders machinery;
4. begins site work;
5. and only then checks EIA.

This sequence can be disastrous.

The better sequence is:

technical project → site screening → EIA classification → environmental process → construction/permit implementation.

The Ministry also states that projects commenced without the required EIA decision can be stopped until compliance is achieved, with further consequences under environmental legislation.

9. Capacity Increases Can Trigger a New Environmental Review

Environmental compliance does not end when the original factory opens.

A manufacturer may later want to:

• add another production line;
• double furnace capacity;
• expand chemical storage;
• build another building;
• or increase annual output.

The Ministry’s current guidance provides that where a project with an existing EIA decision is expanded or its capacity increased, the proposed expansion is evaluated cumulatively with the environmental effects underlying the existing decision, and a further application may be required depending on the applicable thresholds and original decision.

Therefore, a foreign investor acquiring an existing factory should review not only the current permit but also:

whether the planned post-acquisition expansion fits within that environmental approval.

This is a major M&A due diligence issue.

10. Environmental Permit and EIA Are Not the Same Thing

A frequent mistake is assuming:

“We received EIA approval, therefore all environmental permits are complete.”

That is incorrect.

EIA is primarily concerned with assessing the proposed project’s environmental impact before or during development.

Operational environmental permits are separate.

The Ministry’s Environmental Permit and Licence framework covers subjects including:

• air emissions;
• environmental noise;
• wastewater discharge;
• deep-sea discharge;
• and specified waste-management/licensing activities.

Facilities falling within Annex 1 or Annex 2 of the environmental permit regime must first obtain the applicable Temporary Activity Certificate and then obtain the required environmental permit or permit-and-licence document within one year.

Accordingly, an industrial project may need both:

EIA approval before investment

and

environmental operating permission before/while commencing production.

11. Wastewater Is Often a Deal-Breaker

Foreign manufacturing investors frequently focus on electricity but underestimate wastewater.

A factory may generate:

• ordinary domestic wastewater;
• process wastewater;
• chemical wastewater;
• heavy metals;
• oils;
• high-temperature discharge;
• or other industrial effluent.

Before buying an OIZ parcel, the investor should ask:

Can the OIZ wastewater plant legally and technically accept our discharge?

The answer may determine whether the investor needs its own treatment facility.

This has direct effects on:

• land requirement;
• CAPEX;
• operating cost;
• environmental permitting;
• and project timeline.

The same principle applies outside OIZs, where discharge permissions and receiving-environment requirements can be more complex.

12. Air Emissions and Chimney Requirements Should Be Designed Early

Factories involving:

• combustion;
• furnaces;
• paint;
• solvents;
• metal treatment;
• chemical reactions;
• boilers;
• thermal processes;
• or dust-generating operations

may require air-emission controls and environmental permits.

The process engineer and environmental consultant should therefore coordinate before building design is frozen.

Otherwise, the investor may complete the architectural project and later discover that additional:

• chimney height;
• filtration equipment;
• scrubbers;
• monitoring equipment;
• or separation distances

are needed.

Regulatory engineering should precede construction engineering.

13. Obtain the Correct Construction Permit

A greenfield factory will generally require a building permit — yapı ruhsatı under the zoning framework before lawful construction.

The project will typically need appropriate:

• architectural;
• structural;
• electrical;
• mechanical;
• fire;
• infrastructure;
• and other technical documentation

according to the project’s characteristics.

Within an OIZ, the OIZ is the relevant authority for building permits and building-use permissions under the applicable framework.

Outside an OIZ, the competent municipality or other relevant local administration generally becomes important depending on the location.

The construction contract should expressly allocate responsibility for:

• licence documents;
• design compliance;
• contractor qualifications;
• occupational safety;
• completion documents;
• and defects preventing occupancy.

14. The Factory Also Needs a Building Use/Occupancy Permission

Completing construction physically is not enough.

The completed building normally needs the relevant building use/occupancy permission — yapı kullanma izin belgesi, confirming that it can be used in accordance with the permitted project.

Within an OIZ, this permission is issued through the OIZ under the applicable zoning legislation.

Foreign investors acquiring a completed factory should therefore verify:

Does the existing building actually have a valid occupancy document consistent with its current physical configuration?

Illegal mezzanines, extensions, warehouses or production halls can create significant licensing problems.

15. Check the Workplace Opening and Operating Licence

Commercial production generally also requires an İşyeri Açma ve Çalışma Ruhsatı — Workplace Opening and Operating Licence.

Factories are frequently classified as gayrisıhhî müessese, broadly meaning establishments whose activities may cause biological, chemical, physical or environmental effects on their surroundings.

The licensing regulation divides such establishments into different classes according to their potential impact.

For first-class facilities, additional concepts such as:

site selection and establishment permission

may become relevant before the factory is built.

The correct classification must therefore be established at the beginning.

Inside an OIZ, the OIZ itself is the competent licensing authority for the workplace opening and operating licence.

16. Fire Compliance Should Be Designed Into the Factory

Fire compliance should never be left to the final licence inspection.

A factory may require design measures concerning:

• fire compartments;
• emergency exits;
• sprinkler systems;
• hydrants;
• fire-water storage;
• smoke control;
• alarm systems;
• hazardous-material storage;
• explosion risk;
• electrical systems;
• evacuation routes;
• and emergency access.

These requirements can materially affect construction cost.

A foreign investor should therefore have fire compliance reviewed during the project-design phase.

Retrofitting an inadequate fire system after construction can be substantially more expensive than designing it correctly from the beginning.

17. Occupational Health and Safety Obligations Begin Before Production

Manufacturing facilities commonly fall within dangerous or very dangerous workplace categories depending on the activity.

Turkey’s Occupational Health and Safety Law applies broadly.

The Ministry confirms that risk assessment is required in all workplaces covered by Law No. 6331.

Depending on workplace risk category and employee numbers, the employer may also need:

• occupational safety professionals;
• workplace physicians;
• other health personnel;
• employee training;
• emergency plans;
• health surveillance;
• professional competency documentation;
• and periodic equipment controls.

The Ministry notes, for example, that employers may fulfil relevant occupational health and safety professional requirements through authorised Joint Health and Safety Units where appropriate.

Factory employment planning should therefore include occupational safety cost from the beginning.

18. Electricity and Natural Gas Capacity Should Be Confirmed Before Land Purchase

A parcel can be legally suitable but commercially unusable if sufficient energy cannot be supplied.

An investor should determine:

• required electrical connection capacity;
• transformer requirements;
• natural-gas capacity;
• connection cost;
• connection timeline;
• backup energy;
• and potential renewable-energy solutions.

For energy-intensive manufacturers, this may determine location more than land price.

A factory may also consider rooftop or land-based solar production for self-consumption under Turkey’s unlicensed electricity generation regime. EPDK maintains the applicable unlicensed generation application and connection framework.

This should be evaluated during roof and electrical design rather than after completion.

19. Sector-Specific Production Permits Must Be Checked Separately

A general factory operating licence does not authorise every product.

Depending on the industry, additional regulation can apply to activities such as:

• food production;
• pharmaceuticals;
• medical devices;
• cosmetics;
• chemicals;
• petroleum;
• mining;
• waste processing;
• electricity;
• defence products;
• automotive manufacturing;
• tobacco;
• alcohol;
• fertilizers;
• or hazardous substances.

The investor should build a sector permit matrix identifying every authority whose approval is required:

before construction, before trial production and before commercial sale.

This is especially important when purchasing an existing factory.

A permit may be:

• company-specific;
• site-specific;
• product-specific;
• capacity-specific;
• non-transferable;
• or subject to notification following a shareholding change.

20. Foreign Engineers and Managers May Need Work Permits

Factory projects often involve foreign:

• plant managers;
• production directors;
• engineers;
• commissioning specialists;
• technicians;
• and quality-control personnel.

Foreign nationality does not itself create a right to work in Turkey.

Current work-permit criteria contain financial, employment and salary thresholds.

For example, the current Ministry criteria provide salary multipliers by position, including a minimum of four times the gross minimum wage for engineers and architects and five times the minimum wage for senior executives and pilots.

For a foreign shareholder who actively works in the company, the current ordinary company-partner criteria generally require at least TRY 500,000 company paid-up capital, at least TRY 500,000 attributable to the foreign partner and at least a 20% shareholding; the five-Turkish-employee requirement generally applies beginning with the seventh month of the first permit. Foreign partners with at least USD 100,000 capital participation benefit from the specific exemption stated in the current criteria.

These rules should be considered when planning the management structure.

21. The Investment Incentive Certificate Should Be Planned Before Procurement

For many manufacturing investments, the Investment Incentive Certificate — Yatırım Teşvik Belgesi is financially crucial.

Since 2018, applications for new Investment Incentive Certificates and related transactions are processed electronically through E-TUYS.

Foreign and domestic investors are eligible on an equal basis for the incentive framework. Current official guidance expressly emphasises equal access for international investors.

In practical terms, incentive planning should occur before the investor begins ordering major machinery or committing to the final project budget.

The certificate should correctly reflect the:

• factory location;
• investment subject;
• capacity;
• machinery;
• imported machinery;
• domestic machinery;
• construction;
• financing;
• and employment assumptions

on which the incentive package depends.

22. Turkey Introduced a New Investment Incentive Architecture

Turkey’s current incentive framework is more selective than the older regional-only model.

Official investment guidance currently groups support under areas including:

Türkiye Century Development Initiative

Covering schemes focused on strategic and high-value development, including technology, local development and strategic investments.

Sectoral and Regional Incentives

Including Priority Investments and Target Investments.

Project-Based Incentives

Including the HIT-30 Program.

R&D and Design Center Incentives

For qualifying innovation and design activities.

Free Zone Incentives

Particularly relevant for export-oriented manufacturers.

The correct incentive category should be identified based on the actual factory, not simply based on the province.

23. What Incentives Can a Factory Potentially Receive?

The exact package depends on the program and project.

Current official guidance lists potential support instruments including:

• VAT exemption for qualifying machinery and equipment;
• customs duty exemption for qualifying imported machinery and equipment;
• corporate income tax reduction;
• social security premium support for the employer’s share;
• employee social security premium support in applicable programs;
• income tax withholding support where applicable;
• interest or profit-share support;
• investment land allocation;
• VAT support/exemption for qualifying construction expenditures;
• infrastructure support;
• energy support;
• qualified personnel support;
• R&D/design deductions;
• and, in specialised project-based structures, forms of capital contribution or purchasing guarantees.

A foreign investor should not assume every factory receives all of these.

The incentive package depends on:

sector + location + technology level + investment size + program + employment + project characteristics.

24. Machinery VAT and Customs Exemptions Can Produce Major Upfront Savings

Consider a factory importing EUR 20 million of production machinery.

If the machinery qualifies under the relevant Investment Incentive Certificate, the VAT and customs treatment can have a major effect on initial cash requirements.

Current official guidance confirms that qualifying machinery and equipment may benefit from VAT exemption and that qualifying machinery imported from abroad can receive customs duty exemption under the incentive framework.

For machinery-heavy manufacturing investments, these can be among the most valuable incentives.

The machinery list should therefore be prepared carefully.

Incorrect customs classification or purchasing equipment outside the approved framework can materially reduce expected incentives.

25. Location Changes the Level of Employment Support

Under the regional component of Turkey’s incentive system, location can affect the duration and level of employment-related support.

This means two identical factories constructed in two different provinces may receive different effective incentive packages.

The investor should therefore model at least:

Region A factory

versus

Region B factory

using:

• logistics cost;
• labour availability;
• wages;
• supplier base;
• export route;
• energy;
• land cost;
• tax reduction;
• and SGK incentives.

It is rarely sensible to select a province based only on the headline incentive percentage.

A factory must remain economically efficient after the incentive period ends.

26. High-Technology Manufacturing Can Receive Stronger Incentives

Current official investment guidance places particular emphasis on high- and medium-high-technology manufacturing.

Under the current Priority Incentive framework, official guidance identifies minimum project sizes of TRY 500 million for qualifying high-technology investments and TRY 1 billion for qualifying medium-high-technology projects within the relevant priority product system.

Potentially relevant areas include:

• advanced electronics;
• machinery;
• batteries;
• medical technologies;
• mobility;
• digital technologies;
• and other strategic production categories.

Foreign investors should therefore check the precise GTIP/product and technology classification of the product before assuming the project receives only ordinary regional support.

27. Large High-Tech Factories Should Examine HIT-30

For major technology investments, the HIT-30 High Technology Investment Program can be particularly important.

The Ministry describes HIT-30 as a program designed to attract major high-technology projects in priority areas including:

• semiconductors;
• mobility;
• green energy;
• advanced manufacturing;
• healthy living;
• digital technologies;
• communications and space;
• and investments completing critical value chains.

The official HIT-30 FAQ currently states that high-technology projects generally need a minimum fixed investment amount of TRY 2 billion for consideration under the program.

The program aims at large projects rather than ordinary SME manufacturing.

28. HIT-30 Can Provide Tailor-Made Incentives

Unlike a standard incentive certificate, project-based high-tech support can be heavily customised.

Current official HIT-30 materials describe potential support including:

• reduced corporate tax;
• social security support;
• qualified personnel support;
• customs exemption;
• VAT exemption;
• market-development support;
• public procurement guarantees;
• investment land opportunities;
• favourable financing;
• interest support;
• and potentially capital contribution mechanisms.

The Ministry states that project-based support packages are designed according to the strategic value and characteristics of the individual investment.

A foreign manufacturer planning a billion-euro battery, semiconductor, robotics or advanced manufacturing plant should therefore not limit its analysis to the ordinary incentive schedule.

29. Free Zones May Be Attractive for Export-Oriented Manufacturing

A foreign investor expecting to export most of its production should also evaluate Turkey’s Free Zones.

Current official investment guidance identifies major benefits available under the free-zone regime, including customs and tax advantages for qualifying activities, and notes that export-oriented manufacturing can receive particularly favourable treatment.

Among the benefits identified in the current official guidance are:

• customs duty advantages;
• VAT advantages;
• stamp duty and certain tax exemptions;
• real estate tax advantages;
• corporate income tax advantages for qualifying manufacturing;
• and income tax exemption on employees’ wages for qualifying manufacturers meeting the applicable export threshold.

However, a Free Zone is not automatically superior to an OIZ.

The choice depends heavily on whether the business is:

export-oriented or domestic-market-oriented.

30. Industrial Zones Can Be Relevant for Very Large Projects

Turkey also has designated Industrial Zones — Endüstri Bölgeleri designed particularly for large-scale and integrated investments.

Current official investment guidance identifies advantages including:

• streamlined administrative processes;
• easement rights;
• Ministry/operator coordination;
• infrastructure opportunities;
• and the possibility of additional incentives.

For very large factory investments, the investor should therefore compare:

ordinary industrial land vs OIZ vs Industrial Zone vs Free Zone.

This comparison can fundamentally change both the permitting and incentive structure.

31. Do Not Forget Industrial Registry Obligations After Production Starts

Receiving construction and operating permissions is not necessarily the end of the administrative process.

Manufacturing businesses also interact with Turkey’s Industrial Registry Information System — Sanayi Sicil Bilgi Sistemi, through which the Ministry of Industry and Technology maintains administrative records concerning industrial enterprises.

The finance and operations teams should therefore include industrial registry compliance in the factory-opening checklist.

Different manufacturing sectors may also have:

• capacity report;
• chamber registration;
• product certification;
• conformity assessment;
• and statistical reporting obligations.

These are operational compliance issues rather than real-estate permits, but failure to address them can still affect production.

32. A Foreign Investor Buying an Existing Factory Needs Different Due Diligence

Buying an operating factory is not necessarily safer than constructing one.

A brownfield acquisition should verify whether the target actually possesses valid:

• title or lease rights;
• building permits;
• occupancy permission;
• workplace operating licence;
• EIA decision;
• environmental permit;
• wastewater permission;
• emission permission;
• fire compliance;
• industrial registry;
• sector permits;
• machinery documentation;
• and incentive certificate.

The investor should also determine whether permits survive:

• a share sale;
• an asset sale;
• change in company name;
• capacity increase;
• production change;
• or change of control.

An old environmental licence does not necessarily cover a new production process that the foreign buyer intends to add after closing.

33. Practical Example: Automotive Component Factory

Assume a German automotive supplier wants to build a EUR 50 million factory in Turkey.

The project requires 30,000 m² of industrial land and will employ 400 people.

A proper legal sequence could include:

Phase 1 — Investment structuring

Establish the Turkish subsidiary and determine foreign shareholder and management structure.

Phase 2 — Location comparison

Compare OIZs in several provinces using logistics, labour, incentive region, land cost, utilities and customer location.

Phase 3 — Regulatory screening

Confirm zoning, EIA classification, wastewater capacity and industrial licence classification.

Phase 4 — Incentive modelling

Determine eligibility for the applicable Target/Priority Investment or other incentive route and prepare the Investment Incentive Certificate application through E-TUYS.

Phase 5 — Land

Complete legal due diligence and sign the parcel acquisition/allocation agreement.

Phase 6 — Design

Prepare factory plans incorporating fire, environmental, occupational safety and utility requirements.

Phase 7 — Construction permits

Obtain the building permit and begin authorised construction.

Phase 8 — Machinery

Purchase/import machinery consistent with the approved incentive framework.

Phase 9 — Operational permissions

Obtain occupancy, workplace opening licence and applicable environmental permits.

Phase 10 — Production

Complete employment, foreign personnel work permits, industrial registry and ongoing environmental/SGK compliance.

This sequence is significantly safer than:

“Buy land first and solve the permits later.”

34. Practical Example: Chemical Factory

A foreign chemicals investor faces a higher regulatory burden.

Before acquiring the land, counsel should determine:

• EIA classification;
• industrial facility class;
• hazardous chemical storage requirements;
• wastewater composition;
• air emissions;
• emergency planning;
• fire/explosion risks;
• environmental permit requirements;
• transport requirements;
• and sector-specific chemical regulation.

A plot that is perfectly suitable for an electronics assembly factory may be inappropriate for a chemical plant.

The regulatory analysis must therefore follow the actual process, not simply the term “factory.”

35. Practical Example: Export-Oriented High-Tech Factory

Assume an Asian technology group plans a large advanced manufacturing plant producing primarily for export.

The investor should compare at least three alternatives:

OIZ

Strong industrial infrastructure and potentially attractive regional incentives.

Free Zone

Potentially stronger tax/customs benefits where the export model satisfies the relevant conditions.

HIT-30 / project-based model

Potentially appropriate where the project is sufficiently large and technologically strategic.

The correct structure may save substantially more than negotiating a modest reduction in the land price.

For large investments, location and incentive law are therefore part of the investment’s core economics.

Factory Investment Checklist for Foreign Investors

Before committing capital to a Turkish manufacturing project, a foreign investor should be able to answer the following questions:

If several of these questions are unanswered, the project is not yet ready for irreversible capital expenditure.

Frequently Asked Questions

Can a foreign investor own 100% of a factory company in Turkey?

Generally yes for ordinary manufacturing activities. Foreign investors are generally treated equally with domestic investors, subject to sector-specific restrictions.

Is an Organized Industrial Zone mandatory?

No. A factory can be established outside an OIZ where the land, zoning, environmental and licensing requirements are satisfied. However, OIZs often provide significant infrastructure and administrative advantages.

What is the main advantage of an OIZ?

Ready industrial infrastructure, industrial zoning, a clearer permit authority structure and certain additional tax and operating-cost benefits can make OIZs attractive.

Does a foreign-controlled Turkish company need permission to buy factory land?

Special Article 36 procedures can apply where foreign investors hold at least 50% or control board appointments. However, current official guidance states that acquisitions in OIZs, Industrial Zones, Technology Development Zones and Free Zones are exempt from the prior governorship permission procedure.

Does every factory need a full EIA report?

No. The applicable procedure depends on the sector, capacity and Annex classification. Some projects require a full EIA process, while others may receive an “EIA Not Required” decision.

Can construction begin before the EIA decision?

For projects subject to the EIA Regulation, the required EIA Positive or EIA Not Required decision must be obtained before investment can commence and before specified approvals and construction/use permits are granted.

Is EIA approval enough to operate the factory?

Not necessarily. Separate environmental operating permits can apply to air emissions, wastewater, noise and specified waste activities.

Does a factory need an operating licence?

Generally yes under the workplace opening and operating licence framework. The precise classification and requirements depend on the activity.

Who issues factory licences in an OIZ?

The OIZ issues and supervises building permits, building-use permissions and workplace opening and operating licences under the applicable framework.

Can foreign manufacturers receive Turkish investment incentives?

Yes. Turkey’s incentive regime applies to both domestic and international investors, subject to project eligibility.

What incentives can a manufacturing investment receive?

Depending on the program, potential instruments include VAT exemption for machinery, customs duty exemption, corporate tax reduction, social security support, financing support, land allocation and other project-specific support.

How is an Investment Incentive Certificate obtained?

Applications and related transactions are handled electronically through E-TUYS.

Can imported machinery be exempt from customs duty?

Qualifying imported machinery and equipment included within the applicable incentive framework can receive customs duty exemption.

Can machinery purchases be exempt from VAT?

Qualifying machinery and equipment under the incentive framework can benefit from VAT exemption.

What is HIT-30?

HIT-30 is Turkey’s high-technology investment program providing tailored support for major projects in strategic technology areas.

What is the minimum investment size for HIT-30?

The Ministry’s current FAQ states that projects in the program’s high-technology fields generally require at least TRY 2 billion of fixed investment.

Can foreign engineers work in the factory?

Yes, but foreign employees generally need the appropriate work authorisation. Current work-permit rules also contain salary and employment criteria depending on the employee’s position and status.

Conclusion: What Is the Safest Legal Strategy for a Foreign Investor Building a Factory in Turkey?

Building a factory in Turkey can be a highly attractive investment, particularly for international groups looking for a manufacturing base with access to major export markets.

However, the project should not begin with:

“We found a good piece of land.”

It should begin with:

“We have mapped the production process, location requirements, permits and incentives.”

The first stage is location due diligence.

A foreign investor should compare OIZs, Industrial Zones, Free Zones and ordinary industrial parcels based not only on land price but also on:

zoning + utilities + environmental capacity + logistics + workforce + incentives + licensing.

For many manufacturers, an OIZ can offer a particularly effective combination.

Current official guidance identifies ready infrastructure including electricity, water, natural gas, communications and waste treatment, together with additional location-related advantages.

The second stage is real estate legal due diligence.

Foreign-controlled Turkish companies must consider the special Article 36 framework for property acquisition.

Importantly, current official guidance provides a simplified position for acquisitions in OIZs, Industrial Zones, Technology Development Zones and Free Zones.

The third stage is environmental screening.

This should occur before land acquisition becomes irreversible.

Turkey’s EIA regime can prevent an investor from commencing the project or obtaining key construction/use approvals until the necessary environmental decision is received.

This makes EIA one of the most important early legal questions for any substantial manufacturing project.

The fourth stage is incentive structuring.

The investor should determine before large-scale procurement which current incentive regime applies.

Turkey’s current incentive architecture includes:

development incentives + priority/target incentives + project-based HIT-30 + R&D/design support + Free Zone incentives.

Depending on the project, support may include:

VAT exemption + customs duty exemption + corporate tax reduction + SGK support + financing support + land allocation + infrastructure/energy support.

For a manufacturing investment involving tens or hundreds of millions of euros, this analysis can materially alter project economics.

The fifth stage is permit sequencing.

A successful greenfield project normally follows a sequence similar to:

technical feasibility → site selection → EIA → incentive structure → land → design → building permit → construction → machinery installation → occupancy permission → environmental operating permits → workplace licence → commercial production.

Some procedures may run in parallel.

But they should not be performed randomly.

The sixth stage is operations compliance.

Opening the factory does not end the regulatory burden.

The company must maintain:

• environmental compliance;
• industrial registry records;
• occupational health and safety;
• employee registrations;
• foreign work permits;
• product licences;
• incentive certificate conditions;
• and any sector-specific approvals.

Expansion requires particular attention.

A factory that doubles its production capacity may trigger a new environmental review even if the original plant already had a valid EIA decision.

Finally, foreign investors should remember that incentives should influence the investment—but should not distort sound commercial logic.

A factory should not be built in a location solely because that province offers stronger tax or social security support.

If the investment then suffers permanently from:

• logistics problems;
• insufficient skilled labour;
• high transport cost;
• unreliable supply;
• or weak supplier infrastructure,

the value of the initial incentive may quickly disappear.

The correct approach is to calculate total lifecycle cost.

For a foreign manufacturer, the strongest decision process is therefore:

define product and capacity → shortlist locations → conduct regulatory due diligence → compare OIZ/Free Zone/Industrial Zone → identify EIA path → secure incentive strategy → complete land due diligence → obtain permits → construct → complete environmental/operating licences → commence production → maintain compliance.

A foreign investor should ultimately be able to answer five questions before approving the investment:

Can this exact product legally be manufactured on this exact parcel?

Can the project obtain its environmental approvals?

Can sufficient electricity, gas, water and wastewater infrastructure support the planned capacity?

Which investment incentives are available if the application is structured correctly?

Which licences must be obtained before construction, trial production and commercial production?

If those five questions are answered before the first major capital commitment, the legal risk of building a factory in Turkey becomes significantly more manageable.

If they are ignored, even a technically excellent and well-financed manufacturing project can face expensive redesigns, delayed production, lost incentives or an inability to lawfully operate.

This article reflects Turkish foreign investment, industrial, environmental, zoning, employment and investment incentive rules and publicly available official guidance as of August 2026. It is intended for general informational purposes only and does not constitute project-specific legal, tax, environmental, engineering or investment advice. Factory permit and incentive requirements vary according to location, product, production capacity, environmental impact, technology level, investment amount, ownership structure and sector.