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Turkey’s New Exhibition Incentive Rules: How Impact on Textile and Clothing Exports

By: Behnam Ghasemi – Kohan Textile Journal

Turkey has consistently held a prominent position among the world’s top textile and clothing producers and exporters, ranking within the top 5 globally in various segments including clothing, home textiles, and machine-made carpets.

Behind Turkey’s success in these sectors lies a combination of technical expertise, cutting-edge technology, and the unwavering dedication of Turkish textile artisans. Equally significant is the role played by the Turkish government in supporting the textile industry, greatly contributing to the expansion of exports. Among the Turkish government’s support mechanisms for various industries, including textiles, is the provision of exhibition subsidies aimed at encouraging producers to participate in global exhibitions, explore new markets, and boost exports.

However, Turkey’s regulations governing exhibition incentives are not static, continuously evolving and adapting. This year, the Turkish government introduced a new mechanism to support the country’s participation in exhibitions. Under the previous system, every company could engage in exhibitions related to their industry worldwide and receive government incentives by presenting invoices and cost documents, the amount of which varied depending on the country and region. These incentives often covered 50% of the total costs, rising to 75% for select target markets like the United States.

Under the new mechanism, larger companies are now limited to participating in up to five exhibitions per year. Participating in more than five exhibitions does not qualify for government incentives, although the percentage of government incentives for large firms exporting to target markets has increased to as much as 100%. Additionally, changes have been made to the type of documents required for claiming these incentives.

The crucial question remains: What will be the impact of restricting Turkish companies to only five exhibitions per year?

Mr. Ergun Karabulut, an expert in the textile exhibition industry, sees this new law as a positive development, despite certain challenges it poses for some companies. He commented, “The new law forces companies to be more selective in their choice of exhibitions. Consequently, their chances of participating in medium and small exhibitions in emerging markets are reduced, given the profusion of excellent exhibitions in each sector. For instance, in the fabric manufacturers, a sector where Turkey holds significant influence, attending events like Munich Fabric, Premier Vision, and Tex World is essential. After these, companies are left with only two slots, and this leaves them with limited opportunities to gain government incentives at regional exhibitions.”

The law classifies companies into two categories: large and medium-sized companies, and small companies. The division is based on two criteria: either an annual turnover exceeding 50 million Turkish Liras or employing more than 50 individuals.

Mr. Ergun noted that small companies would be the primary beneficiaries of this law, stating, “Smaller companies naturally rely more on government incentives. This law, which falls under the purview of the Turkish Ministry of Economy, may allow small companies to attend up to 10 exhibition events. Large companies with substantial export volumes do not pay as much attention to these incentives, as they possess greater financial resources and the capacity to travel globally, attending numerous exhibitions to maintain their current clientele. It is worth noting that larger textile goods manufacturers in Turkey often own multiple brands and subsidiaries. Once one company reaches the limit of five exhibitions, they can continue participating in exhibitions through their other companies, effectively using these incentives again.”

Mr. Ahmed Akkoc, an expert in organizing textile exhibitions in Istanbul, Turkey, highlighted a positive aspect of this law: “An increase in the incentive ceiling encourages companies to participate more robustly in important foreign exhibitions within their industry. This translates into more beautiful and expansive exhibition spaces and additional amenities for their participation. The Turkish government has consistently demonstrated its commitment to supporting exporters in foreign exhibitions in recent years. These changes are aimed at enhancing optimization and problem-solving. Turkish companies are now strongly oriented toward expanding their exports.”

Annually, the Turkish government identifies its list of target countries, with the government subsidies varying between 50% to 100% based on Turkey’s macroeconomic objectives, offering different levels of support for each market.

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