3/5/2008

Turkey decisive to attract foreign R&D investments

Bloomberg / Today's Zaman -Turkey expects more investment by auto and technology companies under a new law offering incentives for research and development, the head of the country's investment agency said. "A lot of companies were expecting this law to pass, and now they're very interested in coming to Turkey,'' Alpaslan Korkmaz said in an interview in Istanbul. Magna International Inc., Canada's biggest auto-parts maker, plans to spend as much as C$500 million ($506 million) expanding its plant in Turkey, the National Post reported in March. Other car and parts-makers are planning to set up research and engineering centers in Turkey, said Korkmaz, who was in Detroit last week for talks with auto companies. Korkmaz said his agency has also held talks with two international companies that may build a factory in Turkey to make liquid-crystal display or LCD screens with local partners. He didn't name any of the companies involved. NEW INCENTIVES FOR R&D INVESTORS The law passed in Turkish Parliament last week introduces incentives and supports for investors who want to make research and development investments, regardless of sector or industry, up until 2024. The main goal of the new law is to increase exports of high-technology products and draw the research and development departments of multinational companies to Turkey. According to the new law, companies will have to employ at least 50 staff members in their research and development departments to receive the incentives. The new law allows companies to deduct their research and development investments from their tax base. Previous incentives only allowed for exemptions of around 40 percent of the research and development investments. The effects of the incentives on employment and exports are expected to be visible in three to four years.