Turkey: Technoparks In Turkey - Collaboration Between Science And Industry

Article by Demet Karataş

Technology clearly has become a focal point in most of our lives. Therefore, countries which seek such development must have the ability to transform research into technology and technology into useful commercial products.

Turkey recognizes the importance of collaboration between academia and industrial sectors in this regard. Technoparks have been established where universities and research institutes - in collaboration with commercial companies - have started to create a competitive technology-based industry, as well as procure the technological infrastructure which will ease the access of foreign capital for high-technology.

These Technoparks have obtained legal status with the Technology Development Zones Code ("TDZC") adopted in 2001.

A Technopark is a site where academic, economic and social structures are integrated. High technology companies develop technology and software and carry out R&D by utilizing the facilities of a university or a high technology institute or R&D center/institute. It has to be established in or near a university, a high technology institute or a R&D center/institute according to the TDZC.

Applications for the establishment of a Technopark are made by a Founding Committee, one of whose members must be a representative of a university, a high technology institute or a R&D center/institute. Foreign legal entities of private law can be members of the Founding Committee. The final decision regarding the establishment of a Technopark is made by the Council of Ministers.

Thereupon, a Management Company is established in the form of a joint stock company, responsible for the establishment, management and operation of the Technopark.

Members of the Founding Committee are also the shareholders of the Management Company. Therefore, a foreign legal entity of private law may also be a founding shareholder or later become a shareholder of the Management Company. Although the Articles of Association of a company are not generally subject to prior authorization according to the Turkish Commercial Code, it is required for the Articles of Association of the Management Company to get advanced authorization from the Directorate General of Research and Development.

TDZC is flexible with respect to the procurement of the land needed for the Technoparks (the Code even makes possible land expropriation).

It should also be mentioned that the TDZC provides for the ability to employ foreign directors and qualified research and development personnel in the Technoparks to encourage foreign investment.

Regarding companies that wish to conduct R&D activities in Technoparks, there are two major steps of the application process which take approximately 6 to 10 weeks. Firstly, a preliminary application is filed with the authorized board of the Technopark administration. If this preliminary application is approved by the board, a more detailed secondary application must be filed with the same board to make a final determination. Upon approval, the participant company may commence its activities in the Technopark.

Techno parks have been established not only in Ankara and Istanbul but also in different regions of Turkey such as İzmir, Eskişehir, Konya, Kayseri, Kocaeli, Antalya and Mersin.

Technoparks provide various consultancy and incubator services as well. The EU center, venture capital consultancy, access to financial and donation sources consultancy and life-long education center are the main services that companies may benefit from in the Kocaeli University Technopark.

The Ankara Cyberpark, incorporated with the participation of the well reputed Bilkent University, offers specialization in the fields of nanotechnology, financial consultancy, Labor Law, trademark, patent and tax management consultancy, business and project development consultancy, enterprise consultancy and human resources.

At the Arı Teknokent -Istanbul Technical University’s Technopark, technical and legal consultancy, marketing consultancy, information technologies consultancy, publicity and advertisement consultancy, venture capital consultancy, permanent education services and incubator services are available.

The Gebze Organized Industrial Zone Technopark has been established with contribution from Israeli Stef Wertheimer and sets a  good example of Technoparks founded in cooperation with foreign capital.  Its most important service is the entrepreneur development program. Thanks to this program - realized by Sabancı and Tel Aviv Universities - entrepreneurs benefit from assistance in business planning, feasibility preparation, marketing and management strategies development in accordance with their needs.

3. Financial Supports And Tax Exemptions

The Management Company is exempt from all tax, duty and fee concerning its activities encompassed in the TDZC.

Moreover, the Management Company may receive a governmental grant for the procurement of land and construction of the infrastructure in the event of financial difficulties.

Finally, according to the TDZC, the Management Company through the establishment, management and operation of the Technopark is not subject to corporate income tax.

The relevant legislation provides any interested third parties with support and exemptions in order to encourage them to invest in Technoparks.

For instance; the entrepreneurs are not liable to corporation or revenue tax for the income they earn from their R&D or software activities in Technoparks until the end of the year 2013.

The researchers, software engineers and R&D personnel in Technoparks do not have to pay income tax for their earnings based on their activities at the Technoparks until the end of the year 2013.

In addition to those exemptions, the Companies in Technoparks are also exempt from VAT for their deliveries or services in terms of system software, data management software and internet, mobile or military command control software they produce in said Technoparks until the end of the year 2013.

According to Corporation Tax Communiqué № 86, forty percent of the R&D expenses spent by Companies (including Technoparks) shall be subject to a Revenue/Corporation Tax Abatement unless the entrepreneurs benefit from the Revenue/Corporation Tax Exemption for their earnings concerning their R&D and software activities in Technoparks in compliance with TDZC.

In addition to the above exemptions and support, the SME’s (Small and Medium Size Enterprise) also benefit from non-repayable Technopark rent subsidies and financial support for the construction of production plants and R&D offices in Technoparks in accordance with the Regulations for the Support of Presidency of Small and Medium-Scale Industry Development and Support Administration (KOSGEB).

Finally, there is also non-repayable support for various R&D activities granted by Presidency of Technology and Innovation Support Programs (TEYDEB), the interest-free credits granted to companies entitled to a certificate of industry register or to software companies for various R&D activities by Technology Development Foundation and long-term credits with low interest rates given by the European Investment Bank, as other important support to companies in Technoparks.

In conclusion, due to the promulgation of TDZC and the establishment of Technoparks in various parts of the country, Turkey has taken a crucial step forward in its’ technology-centered industrial and economic policy.

The support and exemptions provided by Technoparks to both foreign and domestic entrepreneurs as well as the high quality services offered in Technoparks will cause more entrepreneurs to invest in Technoparks and thus increase the importance of Technoparks to Turkey’s economy.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.