SECTOR-SPECIFIC SOLUTIONS · PHARMACEUTICALS & HEALTH
Pharmaceutical sector's
incentive and R&D map.
Turkey's pharmaceutical and biotech ecosystem offers a broad incentive area spanning from manufacturing investment to clinical research. Identifying the correct certificate type and application timing in these areas is critical.
Sector Profile
The pharmaceutical sector features among both strategic and priority investment areas in Turkey's investment incentive legislation. A broad spectrum ranging from manufacturing facility establishment to biotechnological product development, clinical research infrastructure and GMP-compliant software systems falls within the incentive scope. This breadth also makes it more difficult to identify the correct status; while the same project can be supported by multiple mechanisms, incorrect structuring may result in significant advantages being missed.
Incentive Applicability Table
| Investment Type | Incentive Route | Priority |
|---|---|---|
| Pharmaceutical manufacturing facility | STB Strategic Investment Incentive | High |
| R&D centre establishment | Law No. 5746 + TÜBİTAK 1501 | High |
| Biotech product development | TÜBİTAK 1511 Priority Areas | High |
| Production capacity expansion | STB Regional / Large-Scale | Medium |
| GMP-compliant software and hardware | Design Centre or R&D Centre | Medium |
Key Legal References
Decision on State Aids in Investments
Strategic Investment status, pharmaceutical sector priority area
Law on Support for Research, Development and Design Activities
R&D centre establishment, 150% R&D deduction
TÜBİTAK Priority Areas Research and Technology Development Programme
Project support within pharmaceuticals and biotechnology priority area scope
Incentive Profile
Pharmaceutical Sector Quick Reference
Applicable Services
Services and supports
used in this sector.
STB
Strategic Investment Incentive
Pharmaceutical manufacturing investments frequently qualify for strategic status due to import dependency criteria. Maximum support package and investment site allocation apply within this scope.
TÜBİTAK
1501 Industrial R&D Support
Product and process development projects conducted by pharmaceutical companies are assessed under this programme. Project expenses are supported by grant.
TÜBİTAK
1511 Priority Areas Programme
Biotechnology and pharmaceuticals are on TÜBİTAK's priority areas list. Projects under this programme benefit from higher grant rates.
LAW NO. 5746
R&D Centre Establishment
R&D centre establishment in pharmaceutical companies provides 150% R&D deduction, SGK support and income tax withholding exemption. Personnel count and R&D expenditure criteria are calculated on a file-by-file basis.
FINANCIAL ADVISORY
Tax Advisory
Correctly applying R&D deduction, incentive-covered tax reduction and VAT exemptions in the pharmaceutical sector requires critical financial discipline.
FINANCIAL ADVISORY
Accounting & Financial Reporting
R&D expense classification, accounting for clinical study costs and tracking incentive-covered expenditures in the pharmaceutical sector require special expertise.
Process Management
How does the incentive process
work in the pharmaceutical sector?
From GMP compliance documents to Ministry application, from TÜBİTAK assessment process to monitoring reports — we manage every step.
Preliminary Assessment
Investment type, current licence status and production capacity are examined. GMP certificate availability, clinical research plan and R&D expenditure projection are determining criteria in establishing the incentive status.
Incentive Type Determination
STB Strategic status, TÜBİTAK programmes and R&D centre options under Law No. 5746 are compared. If a combined structure can be built, the application sequence for each mechanism is planned.
Feasibility & Document Preparation
The full application file including GMP and FDA compliance documents is prepared. Import dependency analyses, domestic added-value calculations and R&D personnel reports are completed at this stage.
Authority Application
Ministry or TÜBİTAK application, assessment process and necessary corrections are managed. The Assessment Commission process is followed for strategic investment applications.
Monitoring & Reporting
Periodic Ministry audits, TÜBİTAK progress reports and R&D centre annual assessments are managed. Additional application opportunities are tracked and certificate extension procedures are completed on time.
Frequently Asked Questions
Common questions about
the pharmaceutical sector.
What conditions must a pharmaceutical company meet to establish an R&D centre?
To establish an R&D centre under Law No. 5746, the number of full-time R&D personnel must be at least 15. In the pharmaceutical sector, biological and chemical research personnel must be employed in a manner that meets this threshold. At least fifty percent of personnel must be university graduates. The share of R&D expenditures within operating expenditures and the documentation of these expenditures are separate audit matters.
What is the minimum investment amount for strategic investment incentive in the pharmaceutical sector?
The minimum fixed investment amount for Strategic Investment Incentive is TRY 50 million, and the pharmaceutical sector's assessment as a priority area does not affect this threshold. However, it is easier for the pharmaceutical sector to meet the import dependency criterion because Turkey's pharmaceutical import dependency rate exceeds the criteria in the legislation. This technically facilitates the application.
Can clinical research expenses be included in the R&D deduction?
Clinical research expenses can be subject to deduction if the project being conducted can be qualified as an R&D activity under Law No. 5746. Phase 1 and Phase 2 clinical studies can be assessed within this scope, while Phase 3 and above studies are mostly regarded as commercial preparation stages and therefore fall outside the scope. Each project must be evaluated separately.
Does TÜBİTAK programme 1511 give priority to pharmaceutical and biotech projects?
Yes. Biotechnology, pharmaceutical technologies and biomedical devices are among TÜBİTAK's defined priority areas. Programme 1511 applies a higher budget ceiling and grant rate to projects in these fields. Whether the project falls within the priority area scope must be verified before application; projects outside scope are directed to the general 1501 programme.
How does region selection affect the incentive amount for a pharmaceutical manufacturing facility?
Since investment site allocation can be provided under strategic status, region selection is less decisive compared to other incentive statuses. However, region selection is critical in combined planning with Regional Investment Incentive; in regions 5 and 6, SGK support, interest support and investment contribution rates reach the highest values. Investments within OIZs benefit from one-region-higher support.
pharmaceutical sector analysis
Let us identify the right incentive structure for your company.
A sector-specific incentive analysis is carried out by assessing your current licence status, R&D personnel profile and investment plan.
Request a MeetingRELATED SERVICES
Advisory services we provide in this sector
TÜBİTAK · Support Programmes
TÜBİTAK National Support Programmes
Grant application, reporting and audit process under programmes 1501, 1507 and 1511 for pharmaceutical and biotech projects.
5746 · R&D Centre
R&D Centre Incentives
Pharmaceutical and biotech R&D centre establishment, accreditation and process management. Tax advantage on clinical research expenses.
STB · Investment Incentive
STB Investment Incentive Applications
Strategic incentive certificate preparation for pharmaceutical manufacturing facility investments; machinery-equipment exemption and tax reduction elements.
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Let us build the right incentive strategy
for your pharmaceutical sector.
We manage every step together from manufacturing facility to R&D centre, from TÜBİTAK application to completion visa.