Legal Considerations to Take into Account in KOSGEB Support Agreements

In practice, the legal relationship referred to as the "KOSGEB support agreement" is not simply a single contract signed by both parties in the classic sense for most support programs. The commitment letter approved electronically by the business, the support program and implementation principles, the application form, the board decision, the project activity plan, the supported expense table, revision decisions, and, if necessary, the debt or collateral commitment letter are all considered together.

Therefore, a business relying solely on the acceptance of its application or the payment of support could create significant legal risks.

If the support provided by KOSGEB is used for purposes other than those specified, if the project conditions are changed, if the supported machinery is transferred without permission, if the business ownership structure becomes inconsistent with the program conditions, or if payments are not properly documented, the support may be terminated and the payments may be reclaimed with legal interest.

Therefore, it should be remembered that for businesses receiving KOSGEB support, the support relationship is not only financial but also a serious legal commitment.

What is a KOSGEB Support Agreement?

There is no single type of contract for KOSGEB support programs.

The legal framework for a support relationship may consist of different documents depending on the program applied for. Current KOSGEB support programs use application forms, undertakings, implementation guidelines, board decisions, payment request forms, and in some cases, debt undertakings, all used together. For example, the current legislation page for the Business Development Support Program lists the application form, undertaking, debt undertaking, payment request form, and objection forms as separate documents alongside the program implementation guidelines.

Therefore, a company's legal obligations are not determined solely by a few pages of commitment letters approved electronically.

All of the following documents should be reviewed together:

Support program and implementation principles,
Call for proposals,
Application form,
The company's electronic commitment letter,
Board or jury decision,
Project information document,
Activity-time schedule,
Approved expenses,
Technical specifications,
Revision decisions,
Payment request documents,
Monitoring reports,
Debt and collateral undertakings.

When a dispute arises, the defense that "this prohibition was not explicitly stated in the undertaking" may not always be sufficient. The relevant obligation may be regulated in the implementation guidelines or in the board's decision.

Is an Electronic Undertaking Legally Binding?

A significant portion of KOSGEB's operations are conducted electronically. Applications and undertakings can be approved by an authorized person on behalf of the business through the KOSGEB system.

Giving consent electronically does not mean the document will not have legal effect.

Therefore, the person using the system on behalf of the company must:

having the authority to represent
check the information provided in the application,
He/She must read the terms of the undertaking
not approving commitments that the business cannot fulfill

It is important.

Especially when an accountant, project consultant, or company employee prepares the application, it can create serious risks if the company official simply clicks the "approve" button to complete the process.

The incorrect information in the application may be considered a statement made on behalf of the business.

Therefore, before the application is finalized, the company representative should also check the final version of the application form, the financial figures for the project, the expense items, and the partnership information.

The authority of the person representing the company should be checked

In some KOSGEB support programs, company ownership and representation authority may become a direct application requirement.

For example, the current Entrepreneur Support Program requires that the entrepreneur's ownership stake in the business they are applying to be at least 50%, that this stake does not fall below 50% throughout the support program, and that the entrepreneur is authorized to represent the business individually.

Therefore, before applying to KOSGEB;

company articles of association,
trade registry records
share ratios,
decisions of the board of directors or the board of management,
form of representation

It should be examined.

For example, if an entrepreneur owns 50% of the company but can only sign documents jointly with the other partner, the representation requirement in the relevant support program may not be met.

Similarly, if an entrepreneur's share falls below 50% due to a share transfer after the application is accepted, the ongoing support may also be jeopardized.

The partnership structure may need to be maintained throughout the support period

Meeting the application requirements at the time of receiving KOSGEB support is not always sufficient.

Some support programs require the conditions to remain in place for the entire duration of the support period.

The company partners;

share transfer,
taking on a new partner,
capital increase
company merger,
division,
change of company type

Such actions may affect KOSGEB support.

Therefore, if there are plans to bring in investors or transfer company shares, existing KOSGEB programs should be reviewed before the transaction is completed.

For example, if a support program requires the entrepreneur to own at least 50% of the shares, a capital increase undertaken to secure investment may reduce the entrepreneur's share to 45%. While this transaction is perfectly valid under company law, it may result in the loss of eligibility for KOSGEB support.

Therefore, KOSGEB's obligations should also be included in the legal review when preparing an investment agreement or share transfer.

The Board's Decision is as Important as the Contract

Just because an application has been generally accepted by KOSGEB does not mean that all expenses requested in the application will be supported.

The board, particularly in project-based support;

which expenses will be supported,
support amount,
to the amount of expense,
technical specifications,
support period

They can also decide.

It is stated that in the current Entrepreneurship Support Program, the committee decides which of the expenses requested by the business will be covered by the support, the amount, the total cost, and the minimum technical specifications, and this is recorded in the Committee Decision Form.

Therefore, a business should not make purchases solely based on its own project file.

For example, a business application might request a machine worth 500,000 TL. However, the board might have different opinions about the same machine;

a lower support amount,
a certain capacity,
a specific technical specification,
a certain number

He may have determined it.

If the purchase is made in a manner different from the board's decision, payment may be partially or completely rejected.

Spending before a support decision is made is risky

One of the most important aspects of KOSGEB support is the timeframe between which the expenditure can be made.

The eligible expense period may vary for each program. Therefore, businesses should not immediately purchase machinery or services simply by considering the submission of a support application as sufficient.

Firstly, regarding the implementation guidelines of the relevant program;

expense start date,
project start date,
invoice date,
payment date,
delivery date

The specific requirements must be determined.

The current Entrepreneurship Support Program includes Business Development Support, which covers expenses for machinery, equipment, molds, software, and services purchased and approved within the project duration.

A purchase made while the application is still under review may not be eligible for support, even if the project is later approved.

Therefore, especially in high-value machinery investments, including a clause in the purchase agreement stating "subject to KOSGEB support decision" or a suitable termination/postponement clause can reduce commercial risk.

Attention should be paid to the technical specifications of the project cost

Machinery, software, or services supported by KOSGEB must comply with the technical specifications approved by the board.

It is not always sufficient for a business to purchase another product because it believes it serves the same purpose.

For example, in a board decision;

20 kW motor power,
specific production capacity,
certain software modules,
specific certification standard

If these specifications were requested, the purchased product must meet them.

If a business wishes to change its technical specifications, it must first submit a revision request to KOSGEB.

After a purchase is made, simply stating "we received an equivalent product" may not be sufficient to support the expense.

Revision requests must be submitted for project changes

Economic and technical conditions may change during the project implementation process.

The machine may be discontinued, the supplier may be unable to deliver, there may be an extraordinary increase in the exchange rate, the project methodology may change, or it may be necessary to use different software.

In this case, instead of making unilateral changes, the business should request a revision from KOSGEB.

A separate project revision request form is available for Business Development Support under the current Entrepreneurship Support Program. Forms for project revisions, monitoring, and final reports are also published on the program page.

The main areas requiring revision are as follows:

Changing the expense item,
Changing the machine model,
Changing the technical specifications,
Situations where the supplier needs to be changed,
Changing the activity time,
Reorganization of project activities,
Moving the business,
Changes in the ownership structure.

Instead of implementing the change first and then informing KOSGEB, it would be safer to obtain written or system-based approval beforehand.

Even changing the company address can affect support

Changing a business address may be a routine procedure under commercial law. However, it should be evaluated separately in terms of ongoing KOSGEB support.

The current Entrepreneurship Support Program states that if a business receiving Business Development Support relocates to a different province than the one where it applied, the committee may evaluate the situation and decide whether to continue or terminate the support.

Therefore, if a relocation of the production facility or company headquarters is planned, simply notifying the tax office and the trade registry may not be sufficient.

KOSGEB should also be notified, and if necessary, a board evaluation should be requested.

The supported machine cannot be sold or transferred

One of the most important obligations that businesses must pay attention to in KOSGEB support programs is the limitations on cost savings on supported machinery and equipment.

The current Entrepreneurship Support Program states that the machinery, equipment, molds, and software supported cannot be sold, rented, transferred, or, as a rule, pledged as collateral to other individuals or institutions during the support period. Furthermore, it is explained that any precautionary measures or seizures must be reported to KOSGEB with supporting documentation within seven days.

This arrangement is particularly important for group companies.

For example, even if the ownership of the machine remains with the company receiving the support, its actual use in the factory of another group company can be considered a transfer of the right to use it.

Similarly, transferring machinery to another company during leasing, rental, or business transfer may create problems for KOSGEB (Small and Medium Enterprises Development Organization).

Therefore, assets acquired through support must also be listed separately during company mergers, sales, foreclosures, or restructuring processes.

Seizure or precautionary measure must be reported to KOSGEB

The placement of a lien on assisted machinery from an enforcement file may occur outside the control of the business.

However, even if the business is not at fault, it may still have a reporting obligation under the relevant support program.

The current Entrepreneurship Support Program states that if a precautionary measure or seizure is placed on the supported assets, the situation must be reported to KOSGEB with supporting documents within seven days; failure to report may result in the collection of the support amount with legal interest.

Therefore, the company's legal department or accounting department should not handle enforcement files independently of the KOSGEB project manager.

As soon as a lien is found on the supported asset, a written notification must be sent to the relevant KOSGEB unit.

Prohibition of Purchases from Relatives and Related Businesses

KOSGEB support programs have specific restrictions in place to prevent the support of transactions that appear to be genuine but are not economically related.

The current Entrepreneurship Support Program states that goods or services cannot be purchased from the owners and partners of a business, or from their spouses, mothers, fathers, siblings, children, or businesses owned or co-owned by them. If such a situation is detected, no support payment will be made.

Therefore, price and technical qualifications should not be the only factors considered when selecting a supplier.

The supplier company;

partners,
the real beneficiaries,
managers,
family relationships with company partners

should also be examined.

For example, purchasing machinery from a company in which the entrepreneur's brother holds a 10% stake could pose a problem in terms of eligibility for support.

Attention should be paid to the prohibition of duplicate support

The fact that the same expense is subject to multiple government grants represents a significant risk area for KOSGEB (Small and Medium Enterprises Development Organization).

If a business receives payments for the same machinery invoice from both KOSGEB and another public institution or support program, this may be considered duplicate support according to the program's provisions.

Therefore, the business;

TÜBİTAK,
development agencies
Ministry of Industry and Technology,
Ministry of Commerce,
İŞKUR,
European Union funds

The support it receives from various sources, such as these, should be monitored centrally.

It is not strictly prohibited to benefit from more than one support program. The important thing is to clearly differentiate between the rates and conditions under which the same expense is supported.

Invoices and bank payment documents must be consistent with each other

Having only the invoice is not sufficient for KOSGEB support applications.

The goods or services listed on the invoice must actually have been received, and payment must be documented in a manner accepted by the program.

The main things to check are:

The invoice recipient must be the company providing the support service
The invoice date must be within the support period
The machine model and technical specifications must be clearly stated
The invoice amount and bank payment must be consistent
The receipt description should refer to the relevant invoice
The payment account must belong to the supplier,
The goods have been delivered to the business.

If the total invoice amount differs from the bank payment amount, the reason for the difference must be documented.

For settlements with suppliers, checks, credit cards, or third-party payments, the specific provisions in the program's implementation guidelines should be reviewed separately.

Fraudulent transactions can have very serious consequences

Issuing an invoice for a machine that was never received, falsely representing that consulting services were received when they were not, or the return of payment from the supplier to the business may not only result in the cancellation of KOSGEB support.

These types of transactions;

demanding the return of the support with legal interest,
Record of non-compliance in the KOSGEB system
public damage,
criminal complaint,
fraud or forgery investigation

This can lead to consequences such as these.

KOSGEB's current regulatory system also publishes the Non-Conformity Directive and the Guarantee Directive separately. The KOSGEB regulatory page was updated on June 22, 2026, and these regulations are listed among the current directives.

Therefore, it is absolutely forbidden to create additional documents or alter existing documents in a way that is contrary to the truth in the support file.

Social Security Institution (SGK) records should be checked in personnel support cases

If personnel expenses are eligible for support, simply having the employee appear on the payroll may not be sufficient.

The business;

SGK employment registration form,
monthly premium and service records,
payrolls
bank fee payment records,
working periods

They must be compatible with each other.

In the current Entrepreneurship Support Program, personnel expenses are among the supporting elements of Business Development Support.

Registering employees who are not actually working as registered with the Social Security Institution (SGK) solely for the purpose of receiving support payments can create serious irregularities and criminal liability risks.

It can affect the tax and social security debt payment process

Acceptance of a KOSGEB application does not guarantee that the payment will be deposited into the business's bank account in full.

The current Entrepreneurship Support Program stipulates that if a business has tax or social security debts exceeding the limits set by legislation, these debts can be deducted from the support amount, and the remaining amount can be paid to the business. There are also specific conditions regarding tax and social security debts for direct payments to suppliers.

Therefore, the company's tax and social security debt status should be checked before making high-value purchases.

Otherwise, the business might make a payment plan assuming the entire support amount will come into its account, and could face a significant cash flow problem.

Business transfers or mergers should be reviewed in advance

While the support process is ongoing, it is possible for the business to be transferred to or merged with another company. However, this does not automatically mean that the support will continue.

The current Entrepreneur Support Program stipulates that the board will evaluate whether support will continue in the event of a business transfer or merger with another business. Support is terminated if liquidation begins or the business closes.

Therefore, KOSGEB support for company acquisitions and mergers must be included within the scope of legal due diligence.

The purchasing company;

ongoing support amounts,
repayment obligations
supported machinery and equipment,
guarantees,
risks of breach
audit reports

The company transfer should not be completed without due diligence.

Liquidation or Closure May Terminate Support

The company entering liquidation or ceasing its commercial activities may result in the termination of KOSGEB support.

However, how payments are recovered if support is terminated may vary depending on the fault of the business.

The current Entrepreneur Support Program states that if the business is terminated due to death, serious accident, serious illness, fire, earthquake, theft, financial inadequacy, or similar reasons deemed appropriate by the board, without any intent or gross negligence on the part of the business owner, the normal collection process for the repayable support can be applied; otherwise, the debt becomes due and payable on the date of the board's decision and can be collected with legal interest from the payment date.

Therefore, documenting the events that led to the business closure is important.

In repayable support programs, the loan agreement should be reviewed

For some of KOSGEB's repayable support programs, a loan or collateral commitment letter is obtained from the business.

On KOSGEB's current legislation page, the Support Programs Guarantee Directive and the Debt Undertaking are published as separate documents.

Before these documents are signed, especially;

refund date,
number of installments
acceleration clause
interest,
coverage
conversion of collateral into cash,
competent court,
bail provisions

It should be examined.

There may be situations where failure to pay an installment renders not only that installment but the entire remaining balance due and payable immediately.

Therefore, repayable support should not be viewed as "interest-free money." The business's payment schedule and cash flow must be planned together.

The validity period of the guarantee letter must be monitored

In support schemes that utilize bank guarantee letters, it is not sufficient for the business to simply provide the guarantee.

The security;

amount,
duration,
extension conditions,
possibility of converting to cash

should be followed.

If the guarantee is not renewed as its expiration date approaches, KOSGEB may take action to convert the guarantee into cash.

Therefore, the deadlines should be scheduled separately within the company's finance department.

Notifications sent by KOSGEB should be followed up

One of the most serious mistakes in the KOSGEB process is the failure to regularly check electronic notifications.

To the business;

document completion,
payment request
revision,
inappropriateness,
refund,
objection

Short timeframes may be given for this.

The fact that the notification is sent to the company employee's personal email account or that the financial advisor fails to follow up on the process does not prevent the deadlines from starting to run in any case.

Therefore, KOSGEB and UETS notifications should be checked daily by a designated company official.

Can the KOSGEB Commitment Letter be amended later?

The company cannot unilaterally change its commitments after support has begun.

However, revisions or changes can be requested only on topics permitted by the program.

Change;

partnership structure,
project expenses,
technical specifications
project duration,
business address,
type of company

If it has an impact, notification must be made to KOSGEB in accordance with the implementation guidelines.

Significant changes made without explicit approval from KOSGEB should not be assumed to be accepted later.

Legal Checklist Before Signing the KOSGEB Support Certificate

For businesses, implementing the following checklist would be beneficial:

The current application guidelines for the program should be read.
The electronic commitment form must be downloaded and kept.
The final version of the application form must be checked by a company representative.
Partnership ratios should be compared with program terms.
It should be examined whether the power of representation is individual or joint.
The expenses approved in the board's decision should be listed separately.
The technical specifications of each expense item must be provided to the purchasing team.
Whether spending is possible should be checked before the support begins.
The supplier's partnership and family relationships should be investigated.
It should be checked whether other public support is available for the same expense.
Payments must be made through the bank and with a clear description.
Machinery and equipment must not be transferred without authorization during the support period.
Seizure and precautionary measures must be reported to KOSGEB immediately.
Address and partnership changes should be evaluated in advance.
With each project change, it should be checked whether revisions are needed.
Tax and social security debts should be checked before requesting payment.
The validity periods of the letter of guarantee must be monitored.
Electronic notifications should be checked regularly.
All documents in the project file must be archived for at least the duration of the support and monitoring period.
Any significant changes should be reported to KOSGEB in writing whenever possible.

Most Common Mistakes in KOSGEB Support Agreements

The most common errors encountered in practice are as follows:

Giving electronic approval without reading the commitment letter,
Giving the project consultant completely unchecked authority,
Buying machinery without reviewing the board's decision,
Changing the technical specifications,
Changing project costs without making revisions,
Buying goods from a related company,
Using the same invoice for different government grants,
Making payments outside of a bank and without documentation,
Allowing another company to use the supported machine,
Changing company ownership ratios,
Moving the business to another city and not notifying the authorities,
Failing to inform KOSGEB that a lien has been placed on the machine,
Missing the deadline for depositing the guarantee,
Failing to check notifications,
Ignoring the KOSGEB application when closing the business.

Some of these errors may simply result in the support payment not being made, while others may lead to the recovery of the support already provided, along with legal interest.

What can be done to prevent KOSGEB support from being reclaimed?

If support is requested back on the grounds of a breach of the commitment letter or program terms, the business must first examine the basis for the request for reimbursement.

The following points should be considered:

Has there actually been a violation?
Which contract or program provision is the breach based on?
Has the company been given the opportunity to remedy the deficiency?
Does the breach affect the entire support package or only a specific expense?
Is the interest start date correct?
Was there intent or gross negligence on the part of the business?
Is there a force majeure event?
Was the order issued by the competent authority?

Allegations of non-compliance with regulations, undertakings, or support conditions may be further evaluated by KOSGEB under the current Non-Compliance Directive. On KOSGEB's current regulations page, the Non-Compliance Directive and the Support Programs Guarantee Directive are listed as key regulations in effect as of 2026.

If the recovery process is carried out based on public authority, administrative appeals and administrative lawsuits may be filed, and in some disputes arising from debt undertakings or collateral transactions, judicial proceedings may also be involved.

Why is legal advice important for KOSGEB support programs?

KOSGEB support processes are not limited to project writing or financial consultancy services.

The support relationship;

corporate law,
contract law,
administrative law,
enforcement law,
tax and social security practices,
criminal law when necessary

It is related to.

Especially with high-value grants, capital increases, share transfers, mergers, or company sales made after the project is approved can directly affect KOSGEB's eligibility criteria.

Similarly, if a machine supported by KOSGEB is seized in an enforcement proceeding, both enforcement law and KOSGEB's notification obligations must be considered together.

Therefore, businesses receiving KOSGEB support should review their existing support agreements and commitments before making important decisions regarding company law.

Conclusion

The KOSGEB support agreement or undertaking is not merely a formal document securing the payment of support. For the business, it forms the basis of significant legal and financial obligations that will continue throughout the support period.

The application form, commitment letter, program implementation guidelines, board decision, and project documents should be evaluated together. It is not sufficient for the company to only look at the commitment letter.

In particular, the partnership structure, representation authority, technical specifications of expenses, purchase dates, project revisions, prohibition of purchases from related parties, transfer of supported machinery, seizure notices, collateral and repayment provisions should be carefully monitored.

Since company transfers, capital increases, address changes, mergers, or liquidations carried out after receiving KOSGEB support may also affect the support, KOSGEB obligations should be evaluated separately before any commercial transactions are carried out.

If the support conditions are violated, it is possible not only to withhold new payments, but also to demand the return of previously paid amounts with legal interest, to convert the collateral into cash, and in severe cases, to initiate proceedings for non-compliance or penalties.

Therefore, especially with high-value KOSGEB grants, conducting a legal review before the commitment letter is approved and notifying KOSGEB in writing of any significant changes that occur during the support period can significantly prevent future disputes.

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