State Supports for Exports
State supports are one of the most important pillars of exports. In fact, it may be a bit difficult to export successfully without benefiting from export supports. Because there are three basic costs when exporting. These; product, logistics and advertising costs.
There is a system where these expenditures can be encouraged. For example; In 2016, social media advertisements began to be encouraged, that is, they were included in the scope of the legislation. Since then, 60% of online advertising expenditures made abroad can be refunded.
WHAT ACTIVITIES DOES THE STATE SUPPORT?
The state is not in a position to support every field. The activities it supports are:
direct investment
Employment
R&D and Innovation
Export
“I am an exporter. I have my KEP address, e-signature and membership in the exporters’ association. What kind of support can I benefit from?
THE MOST BASIC EXPORT SUPPORTS
Market research trip support
Market entry documentation support
Overseas unit support
Overseas advertising, promotion and marketing support
Overseas trademark registration support
Design support
MARKET RESEARCH TRIP SUPPORT
Market research trip support rate is 70%. There is a $50k annual limit and up to $5k per trip is supported. This means that $4,900, which is 70% of an expenditure of $7,000, can be refunded, but for an expenditure of $10,000, a maximum of $5,000 can be recovered.
In addition, within the scope of this support, you have the right to make 10 trips and 1 overseas market research trip can cover a maximum of 3 countries. In other words, it is possible to visit 30 countries in a calendar year with government support. A maximum of 2 personnel can be taken on these market research trips.
Expenses such as transportation, accommodation and car rental with a driver are also covered by 70%. Car rental expenses have a daily limit of $50 and accommodation expenses have a daily limit of $150.
MARKET ENTRY DOCUMENTS SUPPORT
Market entry documentation support is a 50% support. There is an annual limit of $250 thousand. For example, in order to trade with Russia, an EAC (Customs Movement Document) must be obtained. The state returns 50% of this document. For many different documents and certificates such as Halal certificate, ISO Certificate, 50% of the expenses can be received from the government. This support also applies to the costs required to obtain a test/analysis report. Supported documents can be accessed on the website of the Ministry of Commerce.
OVERSEAS UNIT, BRAND AND PROMOTION SUPPORT
It is rent support. It is not necessary for 10 people to come together to open an office abroad, it can be done with a single person. The government provides 40 to 50% support for these expenses. For the store (if it is an industrial-commercial company, that is, if there is a capacity report), this support is 120 thousand dollars. For commercial companies, the limits are slightly lower ($100 thousand). For offices, warehouses, shelves and kiosks, this support is 100 thousand dollars for industrial-commercial companies and 75 thousand dollars for commercial companies.
These supports are annual supports, that is, per unit per year. For example, there is a support of up to 25 units per year and let’s say a warehouse is rented annually in England for $200 thousand. 50% of this warehouse cost, i.e. $100 thousand, can be taken from the government.
There are target and priority countries published by the Ministry of Commerce. For example; Many countries such as Saudi Arabia, Russia, America, France… Support increases by 10% for units opened in these countries. The rate of 50% increases to 60%, the rate of 40% increases to 50% and these supports are per unit supports. So, if these supports are 25 units, they can be considered as 2 and a half million dollars at 100 thousand dollars (25 × 100 thousand dollars).
The state also pays half of the loan principal for offices, warehouses and stores purchased abroad through the “mortgage” method.
When you want to buy something abroad with a mortgage, you can try to make the maturity 4 years because the duration of these supports is 4 years. If you want to buy an office or warehouse with 4-year mortgage management, there is a chance to get half of the principal amount or even 60% if the target is in priority countries. If it is a company established in the 4th, 5th or 6th regions (this is a distinction of the Ministry of Commerce), an additional 20% support is received. In other words, a unit rental support of up to 80% can be provided.
UNIT BRAND AND PROMOTION SUPPORT
Unit Brand Supports
Facebook, Google AdWords, YouTube ads, e-commerce online sales sites, websites prepared in foreign languages such as Russian, English, Arabic, etc. when exporting. Services are received from various companies such as Ticimax and T-Soft, and 60% of the service costs can be refunded from the state.
For example; A textile company needs to take photos. While having these photos taken, if he pays the invoice for the photo shooting fee, he cannot receive 60% of it because there is no such promotional support. However, if he includes this footage in the invoice in the digital catalog or on the website, he has a chance to apply for it and get 60%.
Promotional Supports
If there is a supported overseas unit, there is an advertising support of $150 thousand for that country. There is also $150 thousand support for all remaining countries. So the support increases to $300 thousand.
Let’s say; A company has units in 3 countries (England, Saudi Arabia and America). Then there will be $150 thousand in advertising support in Saudi Arabia, $150 thousand in England and $150 thousand in America. All other countries of the world will also receive $150 thousand support.
FOREIGN TRADEMARK REGISTRATION SUPPORT
Overseas trademark registration expenses are supported at a rate of 50%. There is an annual limit of $50 thousand and the support period is 4 years. 10% additional support is received in target and priority countries, and 20% in the 4th, 5th and 6th regions.
There is a prerequisite for overseas advertising support. This prerequisite is to have a trademark registered in Turkey. If there is no registered trademark in Turkey, the first step to be taken towards incentives will be to register the trademark domestically. After completing the domestic trademark registration, we must apply for international trademark registration in the target countries. Just applying is sufficient.
For example, there is a trademark registered in the country and it has also applied for trademark registration in Saudi Arabia. He can now apply for government advertising promotion supports for advertisements placed in Saudi Arabia. 60% (normally 50%) of the expenditure made for trademark registration in Saudi Arabia is refunded. Because Saudi Arabia is among the target priority countries. In other words, expenses incurred for trademark registration can also be refunded.
DESIGN AND PRODUCT PROJECT SUPPORT
Design support is mostly for textile companies. If a company is a textile company, has design projects and these projects are related to exports, it can benefit from this support. The state can provide half of the gross salaries of designers, modelers and engineers employed throughout the duration of the project, up to $1 million. It provides support of up to $250 thousand, from the purchased SLS machine to various tools.
It also has travel and website support. This support is provided up to $150 thousand. For this support, the project must be truly innovative, related to exports, the goals must be clearly determined, and of course, the project must be accepted by the ministry.
“Are incentives given and how long does it take?”
One of the most frequently asked questions is “Are these incentives given?” Stop. Some of the incentives provided by the government are listed below.
The Ministry of Commerce paid 950 million TL for Turquality and unit promotion supports in 2018.
In 2017, 276 million TL was paid for the KOSGEB general program.
In 2017, 443 million TL was paid for KOSGEB entrepreneurship support.
In 2017, KOSGEB provided support worth 1,692 million TL in total, and more than 347 thousand businesses in total benefited from these supports.
“So how long does it take for these supports to be repaid?”
This period varies depending on the exporter association and how many months an expenditure is made. But we can say that the average is 4 months. For example, if a 6-month support application is made regarding Facebook ads and the exporter union for which the support application is made is a busy union, then this period may take up to 6 months.
Don’t let the things mentioned above confuse you and scare you. Regarding both export-oriented government incentives and other government supports, the most important thing that manufacturers should pay attention to is the application principles. Mistakes made or made in these application principles may cause problems such as changing the support limit your company will receive or not accepting the written project. If you do not have a personnel with the knowledge and experience to write or follow up your project regarding government supports, you can get service and support from experts in this field.
As MAKRO EXPORT Foreign Trade Consultancy and Project Development, we are with you, our valued companies, in all export processes with our nearly ten years of knowledge and experienced consultants. We offer our export consultancy service in three stages. These; sales and marketing consultancy, digital marketing consultancy and government support consultancy.
We would like to point out that export marketing is not just about sales and marketing. For this reason, if you want to receive service on government incentives and KOSGEB grants that support all sales-marketing activities, you can contact us.
