# Acquire a Game Company in Turkey: Unlock VAT Refunds and Marketing Incentives # **Acquire a Game Company in Turkey: Unlock VAT Refunds and Marketing Incentives** ## Introduction: The Smart Route into Turkey’s Booming Gaming Sector Turkey is now firmly established as one of the fastest-growing gaming hubs in the world. A **young and creative developer base**, combined with government support, makes the country uniquely attractive for global investors. But the **real advantage** is financial: acquiring an existing Turkish game company (with at least 1 year of operational history) unlocks **immediate eligibility for VAT refunds on advertising and platform commission expenses**—cost categories that dominate gaming business models. At the same time, ownership of such an entity allows investors to apply for **government-supported marketing incentives**, such as those listed under **EK-31A**. These programs cover international promotion, advertising, and marketing activities for games, apps, and digital platforms. --- ## 1\. Advertising and Commission Costs: The Hidden Burden in Gaming ### 1.1 Advertising as Growth Fuel Most gaming studios allocate **40–60% of their revenue** to user acquisition campaigns. Google Ads, Meta Ads, and influencer-driven campaigns represent essential but heavy expenditures. ### 1.2 Platform Commissions: The 30% Cut Apple App Store and Google Play typically charge **30% commission** on in-app purchases. Steam and similar platforms impose comparable rates. ### 1.3 Why Refunds Transform Economics Without refunds, these are sunk costs. With Turkish VAT mechanisms, investors can recover **up to 18–20%** of these expenses. Over time, this refund system radically improves cash flow and profitability. --- ## 2\. The Legal Framework for VAT Refunds ### 2.1 Export of Services Principle Under Turkish VAT Law, revenues derived from exports of digital services—including games and mobile applications sold abroad—are exempt. This exemption allows companies to apply for **refund of input VAT** paid on expenses linked to such exports. ### 2.2 Refundable Categories * **Advertising costs**: Google Ads, Meta Ads, TikTok Ads. * **Commission fees**: App Store, Google Play, Steam. * **Marketing services**: Third-party publishers, influencers. * **Operational services**: Cloud hosting, payment gateways. ### 2.3 The One-Year Rule A newly incorporated entity cannot apply for VAT refunds immediately. Tax authorities typically require at least **one fiscal year** of operations. **Acquisition Advantage**: By buying an existing company with over one year of records, investors **bypass the waiting period** and file refund claims immediately. --- ## 3\. Financial Impact of Refunds | Expense Category | Annual Spend | Refund Eligibility (Approx. 18%) | Net Recovery | | --- | --- | --- | --- | | Advertising (Google/Meta) | $1,000,000 | $180,000 | Immediate | | App Store Commissions | $500,000 | $90,000 | Immediate | | Steam Fees | $250,000 | $45,000 | Immediate | **Total Benefit**: ~$315,000 annual refund on a $1.75M spend. --- ## 4\. Case Study: European Studio Acquisition A European investor spending $2M annually on global marketing faced two options: * **New Incorporation**: wait 12 months before refund eligibility, losing ~$360,000. * **Acquisition of 2-year-old Turkish studio**: immediate eligibility, refunding ~$360,000 within the first year. **Outcome**: Acquisition more than justified its price within the first year. --- ## 5\. Marketing and Promotion Incentives: EK-31A Advantage VAT refunds are not the only financial benefit. Turkey’s Ministry of Trade provides **direct reimbursement** for international promotion expenses. ### 5.1 Software, Gaming, App & Digital Platform Promotion If the company develops a **game, app, or digital service platform**, expenses for **international promotion and marketing** activities are eligible. Covered costs include: * Digital advertising campaigns abroad, * Social media promotions, * App Store optimization (ASO) campaigns, * International fairs, expos, and conferences, * Promotional videos, demo productions, and PR campaigns. ### 5.2 General Brand Promotion Companies may also claim support for **general-purpose brand advertising**—corporate videos, media campaigns, or brand-building exercises—provided these fall under **EK-31A supported activities**. * **Special promotions** (e.g., sponsorships, major international PR events) require **prior approval**. ### 5.3 Strategic Benefit * Refunds reduce costs already incurred. * **EK-31A support** provides *cash reimbursements* for planned marketing activities. * Combined, they create a **dual financial advantage** for investors. --- ## 6\. Due Diligence in Acquisition When acquiring a Turkish game company, investors must ensure: * At least **1 year of clean tax history**. * No unresolved VAT refund disputes. * Past eligibility for EK-31A supports documented. * Intellectual property (game code, trademarks, publishing rights) secured. --- ## 7\. Acquisition Process Step by Step 1. **Identify Target Company** * Preferably technopark-based with export history. 2. **Preliminary Agreements** * Non-disclosure and term sheet. 3. **Due Diligence** * Financial, legal, IP, and incentive eligibility review. 4. **Share Purchase Agreement (SPA)** * Warranties covering VAT refund rights and incentive eligibility. 5. **Registry and Notifications** * Shareholder changes at Trade Registry, tax office, and SGK. 6. **Refund and Support Applications** * Submit VAT refund claims and apply for EK-31A reimbursements. --- ## 8\. Risk Management * **Tax Liabilities**: Obtain clearance certificates. * **Documentation Gaps**: Ensure all advertising/commission invoices are archived. * **Delayed Refunds**: Build conservative cash flow models. * **Employment Issues**: Verify compliance with labor and SGK requirements. --- ## 9\. Comparative Analysis: Incorporation vs. Acquisition | Criteria | New Incorporation | Acquisition (Existing >1 Year) | | --- | --- | --- | | VAT Refund Eligibility | After 12+ months | Immediate | | EK-31A Marketing Support | After eligibility setup | Immediate | | Market Entry Speed | 9–12 months | 2–3 weeks | | Financial Efficiency | Delayed | Immediate refund & reimbursement | | Risk | Lower at start | Managed with due diligence | --- ## 10\. Frequently Asked Questions **Q1: Can foreigners fully own Turkish gaming companies?** Yes, there are no foreign ownership restrictions. **Q2: How quickly can refunds be received after acquisition?** Typically within 3–6 months, depending on documentation quality. **Q3: Are EK-31A supports automatic?** No. Companies must apply, but eligibility starts immediately post-acquisition. **Q4: Do refunds apply to global advertising spend?** Yes, as long as the invoices are billed to the Turkish entity and linked to export revenues. --- ## Conclusion: The Double Benefit Strategy Acquiring a Turkish game company with at least one year of history provides **two immediate financial advantages**: 1. **VAT Refunds** on advertising and commission expenses—transforming sunk costs into recoverable cash. 2. **Government Marketing Supports (EK-31A)**—reimbursing future international promotion expenses. For foreign investors, this is not simply an entry strategy into Turkey—it is a **financially optimized route** that enhances ROI from the very first year. --- ## Reach Us 👉 If you are considering **acquiring a Turkish game company** to unlock VAT refunds and government marketing supports, our advisory team provides: * Comprehensive **due diligence** on refund eligibility, * Structuring of **SPA with protective clauses**, * Guidance on **EK-31A applications and compliance**, * End-to-end legal and tax advisory. Contact us today to explore opportunities tailored to your investment strategy. info@ozmconsultancy.com ![](https://cdn.hashnode.com/res/hashnode/image/upload/v1755890705035/c07a52d8-0a73-4691-b6e2-1c9954e4c80a.png align="center")