HOW TO OPEN AN OFFICE IN A TECHNOPARK: A COMPREHENSIVE GUIDE
Within the scope of the Law No. 4691 on Technology Development Zones, Law No. 5746 on Supporting Research, Development and Design Activities and the Regulation Amending the Implementing Regulation on Technology Development Zones (“Regulation”), this information note discusses the ways to open an officein a Technology Development Zone (“Technopark”)1, the support and exemptions that can be utilized, and the contractual processes for opening an office.
Definitions
- Managing Company: The company responsible for the management and operation of the Technopark zone.
- Zone: The technology development zone to be applied for.
- Project Evaluation Commission: Usually consisting of three members, one of whom is a sector expert and two of whom are faculty members, and which plays a role in the evaluation phase of the projects.
- Research and development (“R&D”): Research and development is the creative work carried out on a systematic basis to increase the body of knowledge of culture, people and society and to use it to design new processes, systems and applications, including software.
- R&D Personnel: Researchers, software developers and other personnel directly involved in R&D activities.
- Firma: It is the organization that wants to realize R&D projects in Teknopark.
1.What is the Purpose of Establishment of Technopark?
The purpose of establishment of Technology Development Zones is defined as “creating investment opportunities in technology-intensive areas, creating job opportunities for researchers and skilled people, assisting technology transfer and providing technological infrastructure to accelerate the entry of foreign capital that will provide high/advanced technology” in Article 1/1 of the Law No. 4691 on Technology Development Zones (“Law”). The same subject is regulated in Article 1/1 of the Law No. 5746 on Supporting Research, Development and Design Activities as “ to support and encourage the acceleration of foreign direct capital investments in R&D, innovation and design , and to increase the employment of R&D and design personnel and qualified labor force”.
2.Who can take part in Technoparks?
Pursuant to Article 5/4 of the Law, foreign private law legal entities may participate in the management company within the framework of the provisions of the Foreign Direct Investment Law dated 05/06/2003 and numbered 4875 and the relevant legislation. In this context, domestic and foreign companies that want to realize R&D projects in the Technopark and whose projects are suitable for the Technopark can take place.
3. Can Companies Operating in Technoparks Employ Foreign National Personnel?
Pursuant to Article 7 of the Law, personnel are employed in the management company and the activities in the zone in accordance with the applicable labor and labor legislation. Foreign national managers and qualified R&D personnel may be employed in the zones within the framework of the provisions of Law No. 4875, Law No. 4817 dated 27/02/2003 on Work Permits of Foreigners and related legislation.
4.Is it necessary to move the company headquarters to the region to start operating in Technopark?
Although it is not mandatory to have the company headquarters in the region, the R&D and software office in the region must be a “workplace” according to the Turkish Commercial Code No. 6102. For companies whoseheadquarters are not located within the provincial borders of the region , the regional offices must be branches in order to fulfill this requirement.
Although Technology Development Zones are referred to as Technoparks in this information note , Technoparks may be referred to as Technopolis in some regions.
5.How to Apply to Technopark?
Although the steps to be followed in theapplication processes may differ in each Technopark , the road map to be followed in general is tried to be drawn below :
- Applications are received by filling out the Online Application Candidate Formon the relevant Technopark website.
- If the online application is found sufficient, the necessary forms are sent to the candidate by contacting the candidate in order to transmit the information of the R&D project to the Technopark.
- The relevant forms are filled out by the candidate and sent to the relevant unit together with the trade registry gazette showing the establishment and current partnership structure, signature circular, photocopy of tax plate, company and project presentation presentation, application payment receipt, CVs of the project team, work completion and reference letter (if any), certificates and documents (if any), business-time plan (if any), profit and loss statements for the last three years, chamber of commerce activity certificate documents. The documents to be requested for each Technopark may vary.
- Company applications are examined and all applications that are deemed sufficient in form are taken into the evaluation process. The suitability of the applications is evaluated by the Project Evaluation Commission. If the projects deemed suitable to take place are also suitable for the focus areas selected by the company and the office allocation request, the applications are directed to the office allocation process for the approval of the Technopark Board of Directors.
- Contracts are made with entrepreneurs whose applications are deemed appropriate. In space allocations, care is taken to determine the m² for each employee in accordance with the International Labor Organization (“ILO”) standards, and this ratio is determined as 8 m² on average for each R&D and design personnel. This ratio may vary according to the requirements of the legislation, the entrepreneur’s request, project requirements and the layout of the working environment, within the knowledge and approval of the regional management company.
6.What are the Supports and Exemptions to be Benefited from in Technopark?
In accordance with the relevant legislation, candidate companies may benefit from the following exemptions if they meet the necessary conditions:
6.1. Income and Corporate Tax Exemption forCompanies and Entrepreneurs
Pursuant to the provisional article of the Law, the earnings of the management companies within the scope of this Law and the earnings of the income and corporate taxpayers operating in the Zone exclusively from software, design and R&D activities in this Zone are exempt from income and corporate tax until 31/12/2028.
6.2. Income Tax Exemption for R&D and Software Personnel
The wages of R&D personnel working in the zone are exempt from income and all kinds of taxes until 31.12.2028. The wages of the software development and R&D personnel for the time spent outside the Technopark with the permission of the TDZ Managing Company and the approval of the Ministry of Industry and Trade within the scope of the R&D project are also exempt from income tax.
6.3. VAT Exemption
During the period in which the earnings of entrepreneurs operating in Technoparks are exempt from income or corporate tax (until 31.12.2028), the deliveries and services produced exclusively in these regions and in the form of system management, data management, business applications, sectoral, internet, mobile and military command and control application software are exempt from value added tax.
6.4. Insurance Premium Support
Pursuant to Article 3 of the Law No. 5746 on Supporting Research and Development Activities and within the scope of the Law, half of the employer’s share of the insurance premium calculated over the wages of the personnel working in companies operating in Technology Development Zones and whose wages are exempt from income tax is covered from the appropriation to be placed in the budget of the Ministry of Finance.
6.5. Income Tax Exemption for Support Personnel
The wages of the support personnel working in the zone are exempt from all kinds of taxes until 31.12.2028. The number of support personnel within the scope of the exemption cannot exceed ten percent of the number of R&D personnel.
6.6. Permission to Work Outside the Zone
Within the scope of the projects carried out in the zone, some or all of the time spent outside the zone is supported within the scope of the law with the permission of the Managing Company.
6.7. Encouraging Foreign Investors
Foreign private law legal entities may participate in the management company within the framework of the Foreign Direct Investment Law dated 05.06.2003 and numbered 4875 and the provisions of the relevant legislation. In addition, foreign investors may carry out software development and R&D activities in the Zone within the scope of the Law and Law No. 6170.
6.8. Customs Duty Exemption
Goods imported for use in software, R&D, innovation and design projects and related research conducted in the zones within the scope of the Law are exempt from customs duty and all kinds of funds, and the papers issued and transactions made within this scope are exempt from stamp duty and fees.
6.9. Qualified Personnel Support
For Technology Development Zones companies employing R&D personnel with at least a bachelor’s degree in basic sciences, the portion of the monthly salary paid to each of these personnel equal to the monthly gross amount of the minimum wage applied for that year is covered from the appropriation to be placed in the budget of the Ministry of Science, Industry and Technology for two years. However, the support to be provided to each Technopark company within this scope cannot exceed ten percent of the total number of personnel employed in the Technopark company in the relevant month.
7. Termination of the Contract betweenTechnopark and the Company
In the event of the occurrence of the exemplary cases listed below, the existing lease agreement signed with Teknopark is deemed to be terminated regardless of its duration and the necessary procedures to ensure the evacuation of the company from the region are initiated:
- Failure to comply with the Law, the Technology Development Zones Implementation Regulation, the Regulation, the instructions of the managing company and other legislation and rules,
- Failure to use the building/office in accordance with the terms of the contract, making renovations and changes without the approval of the Technopark management unit,
- Failure of the firm to submit the information and documents that they are obliged to submit to the management company in due time pursuant to Article 14/1-i of the Regulation,
- Failure of the company to pay its contractual debts or to fulfill its financial obligations,
- The company goes into liquidation, goes bankrupt, decides to postpone bankruptcy, applies for concordat, obtains a certificate of insolvency,
- Pursuant to Article 14/1-i ofthe Regulation and Article 5/15 of the Law regarding R&D activities ; the company that has completed the R&D project does not submit a new project despite the 3-month period specified by the legislation.
GRC LEGAL Comment:
Opening an office in Technoparks offers great advantages for companies that carry out technology and R&D-oriented projects. Incentives such as tax exemptions and insurance premium subsidies ease the financial burden of companies operating in these zones, while tax exemptions provided to companies attract a qualified workforce. In addition, the opportunities offered to foreign investors pave the way for international cooperation and technology transfer, enabling firms to take advantage of these opportunities to improve their business processes and gain competitive advantage. In our opinion, Technoparks will make significant contributions to companies’ achievement of their growth and innovation targets in the long run.
