INTRODUCTION
Organized Industrial Zones ("OIZ") are special areas where industrial activities are carried out within the framework of a specific plan, with completed environmental and structural infrastructure, and with a production and employment-oriented development target. These zones provide investors with integrated services such as electricity, water, natural gas, transportation and waste management, as well as facilitating license and permit processes.
OIZ's, which were established in Türkiye for the purposes of expanding industrialization, increasing employment and improving international competitiveness, are regulated by the Law Numbered 4562 on Organized Industrial Zones ("Law Numbered 4562") and the Regulations prepared based on this law. In this context, the process of land allocation and pre-allocation in OIZ's is not only an administrative procedure, but also an implementation area where industrial policies are embodied on the ground.
In this article, we will evaluate the pre-allocation and pre-allocation process in OIZ's within the scope of the legislation in force.
A. Legal Basis of the Organized Industrial Zones System
The Organized Industrial Zones system is an institutional structure established to ensure that industrial activities in Türkiye are carried out in a planned, environmentally compatible and sustainable manner. The legal basis of this system is essentially the Law numbered 4562 on Organized Industrial Zones. This Law regulates in detail the establishment of OIZ's, their administrative structure, operating principles, the rights and obligations imposed on industrialists, and their relations with public institutions. Pursuant to this Law, OIZ's operate as a public legal entity with autonomous administrative and financial powers. Furthermore, OIZ implementations are complemented by the Regulation on the Implementation of Organized Industrial Zones, which sets out the detailed procedures and principles for the implementation of Law numbered 4562, and is placed in a multifaceted legal framework by being evaluated together with other basic legislation such as the Zoning Law numbered 3194 in terms of zoning practices and the Environmental Law numbered 2872 in terms of environmental impacts. This comprehensive legal framework not only ensures the spatial planning of industrial investments, but also legally guarantees the multidimensional functions of OIZ's such as regional development, environmental protection and strengthening industrial infrastructure.
B. Land Pre-Allocation Process in Organized Industrial Zones
In order for an investor to obtain land from an OIZ, they must first apply for a pre-allocation of land. Pre-allocation of land is an administrative process that has not yet turned into a final allocation, but indicates that the application has been accepted and reserves the land on behalf of the investor for a certain period of time. This process is carried out within the framework of the Organized Industrial Zones Law numbered 4562 and the Organized Industrial Zones Implementation Regulation issued based on this Law.
Pre-allocation is a transaction that can be carried out after the OIZ becomes a legal entity and is registered with the Ministry of Industry and Technology ("Ministry"), within the framework of the principles determined by the OIZ Enterprising Committee and with the permission of the Ministry, until the OIZ parceling plan is approved. In the Regulation, these issues are detailed in Article 54/A.
In this respect, after obtaining the permission of the Ministry, the OIZ to be pre-allocated is announced on the websites of OIZ, Supreme Organization of Organized Industrial Zones and the Ministry for at least two weeks, usually three weeks in practice, as of the first Monday of the month following the permission. The announcement must specify the estimated square meter (m²) value of the parcel to be allocated.
The requests received at the end of the announcement period are ranked by the OIZ Board of Directors by scoring them according to the criteria determined by the Ministry. In particular, being located in sectors that benefit from incentives under the "Decree on State Aids in Investments" and benefiting from other programs or incentives implemented by the Ministry are mandatory scoring criteria.
If the number of spaces to be pre-allocated is more than the number of applications, all applicants are pre-allocated. In case the number of requests exceeds the number of areas, a short list is created from the applicants with the highest score up to twice the announced area. The applicants on the short list are invited to the tender within the framework of the procedures determined by the OIZ or to draw lots before a notary public. In both methods, a reserve list is created and pre-allocation procedures are carried out by the OIZ Board of Directors.
In case of a tender, the invitation to tender is sent to the Ministry and the tender is held with the participation of the Ministry Representative. The applicants with the highest bids are pre-allocated. If the contract is not signed, the next bidders are invited.
As a result of the Preliminary Allocation decision, the OIZ shall have the investor sign a final allocation agreement within 3 months; otherwise, the preliminary allocation shall be null and void and the amount paid during the preliminary allocation process shall be returned with interest within one year at the latest. The amount paid is an advance payment and is deducted from the final amount in the final allocation.
At this point, we would like to emphasize that the Pre-Allocation Agreement is considered valid only in the presence of certain elements. Namely;
- Pre-allocation cannot be transferred until it is finalized. If the transfer of company shares is detected, the pre-allocation will be canceled and the advance will be returned. In this respect, it is expected that a prohibition on transfer will be added to the Agreement.
- In case of changes exceeding 49% of the shares of the company to which the parcel is allocated, the approval of the Ministry is mandatory and otherwise the allocation will be canceled. In this respect, it is expected that an article regarding the obligation of approval and the cancellation of the allocation otherwise will be added to the Agreement.
These clauses aim to prevent speculation, which is common in practice. If the contract is not signed by the investor, the pre-allocation agreement automatically becomes null and void. These provisions are inspected by the OIZ at the stages of building license; occupancy permit and business license. Changes made without approval are considered speculative transactions and the allocation is canceled. The price paid for the canceled allocation may be deducted and re-allocation may be made at the current price. In this case, the investor cannot claim any compensation or revaluation.
Following the Preliminary Allocation process, the main obligation of the investor is to start the investment within the specified period. After converting the Preliminary Allocation into final allocation, the investor is expected to complete the necessary preparations to obtain a building license and start construction on time. For this reason, we would like to emphasize that the investor is expected to start the necessary preparations during the pre-allocation process.
C. Direct Pre-Allocation
Direct Pre-Allocation is a different process from the Pre-Allocation process and refers to the allocation of parcels directly to investors in Organized Industrial Zones under certain conditions, without competitive processes such as announcement, application, scoring, lottery or tender; in other words, it is not open to everyone, limited in number and for certain investments.
Pursuant to Law numbered 4562 and Article 54/A of the relevant Regulation, up to 15% of the OIZ area allocated as reserve area by the Ministry may be directly pre-allocated with the approval of the Ministry of Industry and Technology.
Direct Pre-Allocation is a practice that demonstrates the guiding role of the Ministry in line with the strategic objectives of the industrial policy. The strategic nature of the investment is evaluated at the discretion of the Ministry. In this respect, if the investor is deemed to realize a project that is important for the public interest, direct pre-allocation aims to remove administrative obstacles to the investment by facilitating the process without the competitive practices involved in the pre-allocation process.
CONCLUSION
Organized Industrial Zones are not only areas where industrial parcels are allocated, but also important institutional structures where the state embodies its industrial policies on the ground and encourages planned development and investment environment. In this framework, the pre-allocation and final allocation processes have a critical function in terms of ensuring both legal security and industrial discipline.
The pre-allocation and final allocation processes in Organized Industrial Zones are strategic mechanisms that aim to ensure the planned, effective and rapid realization of industrial investments. Law numbered 4562 and the relevant Regulations clarify the rights and obligations of investors by introducing clear and binding provisions regarding these processes. The application of the criteria stipulated by the legislation in line with the principles of transparency, equality and public interest provides investors with predictability and prevents speculative transactions.
The pre-allocation process is a preliminary audit in terms of demonstrating the investor's will to realize the committed project, and the obligations not fulfilled in this process may result in the loss of the investment right. Direct pre-allocation is exceptionally regulated in the public interest in order to accelerate strategic investments.
Finally, we would like to point out that common mistakes in the process of pre-allocation of land in OIZs may cause investors to lose their rights and the OIZ administrations to cancel the allocation. These mistakes are often due to a lack of understanding of the process and incomplete or incorrect submission of documents. For this reason, it is critical that investors manage this process carefully and fulfill their obligations on time, both to protect their rights and to prevent damage to the functioning of the OIZ. In conclusion, the careful planning of land allocation and pre-allocation processes in OIZs and their execution in accordance with the legislation is one of the basic building blocks of sustainable industrialization for both investors and the public administration.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
