Detailed Guide to Young Entrepreneur Support (2024)

Young entrepreneur support is a subject of great interest to university students, recent graduates, and individuals taking their first steps in their careers. This is primarily due to the evolving digital economy, which has reduced the necessity for significant capital investment in entrepreneurship. Consequently, financial burdens such as tax liabilities and insurance premiums remain the primary barriers for young entrepreneurs. Support programs like the young entrepreneur incentive help mitigate these barriers.

However, securing young entrepreneur support, which plays a crucial role in corporate training programs and corporate entrepreneurship activities, can be a complex and challenging process for both aspiring entrepreneurs and corporate professionals in managerial roles.

In this guide, INVEXEN aims to simplify this process by providing a comprehensive overview of the eligibility criteria, application procedures, and benefits of young entrepreneur support. We will cover everything from the definition of young entrepreneur support to the application process and the ways in which this incentive benefits young investors, ultimately clarifying all aspects of the under-29 young entrepreneur support program.

What is Young Entrepreneur Support?

Young entrepreneur support is an initiative designed to facilitate entry into the entrepreneurial world by offering Bağkur insurance assistance and tax exemptions to young entrepreneurs within a specified age range. This incentive was enacted under the Official Newpaper dated May 18, 2018, No. 30425. The support program provides Bağkur premium exemptions and income tax relief, as outlined in Article 81 of the Social Insurance and General Health Insurance Law No. 5510, amended as follows:

“Young entrepreneurs benefiting from the tax exemption under Article 20 of the Income Tax Law No. 193, dated December 31, 1960, who are between the ages of 18 and 29, and who register as self-employed for the first time under Article 4, Paragraph 1(b), Subparagraph 1, effective from June 1, 2018, will have their insurance premiums covered by the Treasury for one year, based on the minimum wage threshold defined in Article 82. In partnerships and sole proprietorships, only one partner can benefit from this provision.”

What are the Conditions for Young Entrepreneur Support? What are the Requirements for Bağkur Incentives?

To qualify for young entrepreneur support, applicants must establish a business as a sole proprietorship or partnership and meet the following requirements:

Age Requirement: Applicants must be between 18 and 29 years old. Individuals under 18 years old or over 29 years old do not qualify. There is no alternative age calculation method, and claims that the age limit is 35 are incorrect—this applies only to young entrepreneur credit programs.

First-Time Entrepreneur Requirement: Applicants must establish their first business. If they have previously owned a business, they do not qualify.

Bağkur Registration Requirement: Applicants must have registered as Bağkur-insured entrepreneurs for the first time after June 1, 2018.

Income Tax Exemption Eligibility: Applicants must qualify for the income tax exemption under Article 20 of the Income Tax Law.

Young entrepreneurs who meet all of the above criteria can benefit from the support program and become part of the Turkish entrepreneurial ecosystem. However, it is important to note that this support is not a grant. The program only covers Bağkur insurance premiums for 12 months and provides tax exemptions for a period of three years or three taxation periods.

Who is Not Eligible for Young Entrepreneur Support?

The following groups are not eligible for young entrepreneur incentives:

• Limited Liability or Joint-Stock Companies: Entrepreneurs who establish a limited liability or joint-stock company do not qualify for the support program.
• Existing Business Owners: Entrepreneurs who previously owned a business or held shares in another company are not eligible for young entrepreneur support, even if they establish a sole proprietorship.
• Age Restriction: Entrepreneurs who do not fall within the 18-29 age bracket cannot benefit from the program.
• Partnership Restrictions: If a business has multiple partners, all partners must meet the young entrepreneur eligibility criteria. If one or more partners do not qualify, none of the partners can receive support.

It is essential to note that the eligibility criteria for young entrepreneur support may change over time. Entrepreneurs should regularly check official government announcements and the Official Gazette to stay informed about potential updates to the program.

Key Differences Between Young Entrepreneur Support and Venture Capital

Young entrepreneur support is not a form of venture capital. Unlike venture capital investments, where investors acquire equity stakes in a startup, young entrepreneur support is a non-repayable incentive. The assistance does not require the entrepreneur to give up company shares or ownership rights.

By understanding the requirements and benefits of the young entrepreneur support program, young entrepreneurs can effectively utilize the available resources to establish their businesses, ensuring a strong foundation for growth and success.

What are the Conditions for Young Entrepreneur Support? What are the Conditions for Bağkur Incentive?

The minimum conditions required to apply for the young entrepreneur incentive, which can be applied for with the establishment of a young entrepreneur company and the opening of a young entrepreneur sole proprietorship, are as follows:

• The young entrepreneur age limit is between 18-29. Therefore, those who have not turned 18 and those over the age of 29 cannot benefit from the young entrepreneur support. There is no separate method for calculating young entrepreneur age. The age of the young entrepreneur is fixed, as can be seen in the subparagraph added to the first paragraph. The information that the young entrepreneur age limit must be 35 to apply for young entrepreneur support is not correct. The age limit of 35 applies to the young entrepreneur loan.
• Young entrepreneur candidates who want to benefit from the new entrepreneur support must have established an ordinary partnership or a sole proprietorship. And it is essential that this company is the first company of the candidates.
• Young entrepreneur candidates who will benefit from the young entrepreneur incentive must have been Bağkur insured for the first time as of 01.06.2018.
• They must be included in the scope of the young entrepreneur earnings exemption specified in Article 20 of the Income Tax Law.

Young entrepreneur candidates who meet each of the above-mentioned conditions can benefit from the new entrepreneur support and become a part of the Turkish startup ecosystem. It should be noted that the new entrepreneur support is not a grant program for young people. New entrepreneur support only includes Bağkur premium assistance and tax exemption for young people for 12 months. The young entrepreneur exemption is valid for 3 years or 3 taxation periods. Therefore, the tax exemption covers 3 years.

We have outlined the requirements to benefit from the young entrepreneur incentive. Now it is time to tell who cannot benefit from this incentive. No young entrepreneur candidate whose situation fits one or more of the following items will be able to benefit from the new entrepreneur incentive.

• Those who establish a joint stock or limited liability company cannot benefit from the young entrepreneur incentive. Even if they have opened a sole proprietorship, people who have a partnership in another company or who were previously taxpayers but later closed their company cannot benefit from the new entrepreneur support. In order to benefit from the young entrepreneur support, the company opened must be the first company of the candidate. Candidates who have opened a company before cannot be counted within the scope of young entrepreneur Bağkur support or young entrepreneur tax exemption.
• Candidates who do not meet the young entrepreneur age limit of 18-29 years old cannot benefit from the new entrepreneur support.
• If the opened company has a partner structure, each of the partners must be counted within the scope of the young entrepreneur exception. If one of the partners does not fall under the young entrepreneur exception, the other partners cannot benefit from this support.

The above-mentioned articles regarding those who can and cannot benefit from the young entrepreneur incentive may change over time. In order to be informed about the changes in the incentive articles, it is necessary to regularly follow the relevant articles and the official newspaper.

It should be noted that the young entrepreneur incentive is not a mutual support like Venture Capital. While in venture capital, the investor wants to have a stake in your company or startup, this is not the case with young entrepreneur support. The assistance is free of charge.

What Does Young Entrepreneur Support Cover?

The new entrepreneur support, which can also be defined as young entrepreneur Bağ-Kur support, significantly alleviates the financial burden on young individuals struggling with capital, enabling them to integrate their dynamism and creative ideas into the startup ecosystem more easily. Similarly, this support also serves as women entrepreneur Bağ-Kur support, ensuring that women can enter the entrepreneurial world under equal conditions without any disadvantages.

Only those who meet the eligibility criteria for the young entrepreneur Bağ-Kur support, as mentioned in the previous section, can benefit from the young entrepreneur support, which includes the following:

• Candidates eligible for the young entrepreneur incentive are exempt from income tax for three years. As of 2024, the young entrepreneur tax exemption limit is 230,000 TL. This amount is updated annually. If an entrepreneur exceeds this exemption limit and enters the second tax bracket, they are required to pay the difference.
• As the name suggests, the young entrepreneur Bağ-Kur support also provides Bağ-Kur premium incentives for young entrepreneurs. This support is limited to 12 months, during which the state covers one year of social security premiums for eligible entrepreneurs, making it easier for them to step into the entrepreneurial ecosystem.

As can be understood from the above points, young entrepreneur support is not a grant program. No direct cash assistance is provided to young entrepreneurs. Instead, they benefit from Bağ-Kur premium support and tax exemptions. Young entrepreneurs seeking capital or facing financial difficulties should consider exploring young entrepreneur loan options or other financial support mechanisms.

How to Apply for Young Entrepreneur Support?

The Young Entrepreneur Bağkur Support application can be completed online or by visiting the young entrepreneur to the tax office in person to expedite the process. The steps for both methods differ.

For online applications, candidates must submit a petition via the Interactive Tax Office system. The process can be expedited with the assistance of a financial advisor. If the application is approved, the candidate must print the approval document and submit it to the Social Security Institution (SGK) Directorate corresponding to their residential address.

What Is the Application Period for Young Entrepreneur Support?

It would not be correct to give a clear figure for the duration of the young entrepreneur Bağkur support. The application period and days vary every year. What you can do not to miss the application dates for the young entrepreneur incentive is to follow KOSGEB‘s web site regularly.

By following this page, you can also get information about other assistance offered by KOSGEB. In order to benefit from the support offered to entrepreneurs by KOSGEB, which supports entrepreneurs at many points, you must obtain a KOSGEB Entrepreneurship Certificate.

Industries Eligible for Young Entrepreneur Support

The young entrepreneur support program is available to all first-time entrepreneurs aged 18-29, regardless of the industry they operate in. Thus, no specific sector is prioritized over another in terms of eligibility. However, some industries statistically benefit more from this support than others. In recent years, the sectors that have received the highest number of young entrepreneur incentives include:

Software and IT Sector

With the rapid growth of the digital world and the transformation of previously unimaginable applications into reality, the software industry has become one of the most prominent and highly sought-after sectors. Compared to other industries, software businesses require lower startup capital, making it an ideal choice for recent university graduates eager to innovate and reshape Turkey’s startup ecosystem.

The software sector is also among the top industries benefiting from young entrepreneur support. As entrepreneurial incentives continue to expand, Turkey will solidify its position among the leading countries in the global digital transformation race.

Construction Sector

In a country like Turkey, which has a strong presence in both domestic and international construction projects, it is no surprise that entrepreneurial support programs are highly sought after in the construction sector.

Particularly in the Middle East and Central Asia, Turkey plays a dominant role in construction projects. With continued government-backed entrepreneurial support, Turkey has the potential to become one of Europe’s leading construction markets in the coming years.

E-Commerce Sector

With the rise of Amazon, Etsy, Shopify, and similar online marketplaces, e-commerce has become one of the most prominent commercial arenas in recent years. It is no surprise that young Turkish entrepreneurs are actively participating in global trade through business models such as dropshipping, arbitrage, and private labeling.

As young entrepreneurs strive to secure their place in digital marketplaces, it is a matter of pride that the e-commerce sector ranks third among the industries that benefit the most from young entrepreneur support programs.

Entrepreneurship Consulting Services with INVEXEN

As Invexen, we provide end-to-end comprehensive entrepreneurship consultancy services for startups and unicorn companies by implementing entrepreneurship programs and corporate intrapreneurship models within organizations. Our expertise covers areas such as entrepreneurship capital fund management, venture capital education, investment round consultancy, accelerator consultancy, and entrepreneurship program consultancy.

If you want to secure your place in the entrepreneurship ecosystem and become a leader in the rapidly growing startup market, feel free to contact us and enjoy a seamless entrepreneurial journey!

Frequently Asked Questions About Young Entrepreneur Support

Can Young Entrepreneur Support and KOSGEB Support Be Received Simultaneously?

There are no restrictions on receiving both Young Entrepreneur Support and KOSGEB Support simultaneously. Both incentives can be utilized at the same time. However, to be eligible for KOSGEB support, applicants must complete KOSGEB entrepreneurship training and obtain an entrepreneurship certificate.

How Much Is the Young Entrepreneur Support in 2024?

The amount of young entrepreneur support varies annually due to interest rates and economic conditions. As of 2024, the young entrepreneur incentive has been set at 230,000 TL.

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