Turkey is an attractive destination for foreign investors due to its flexibility during the economic crisis that affected a lot of countries in Europe and Asia. Foreign direct investment (FDI) in Turkey decreased just like in other European countries after the economic crisis, however, they started going back up in 2015. Despite the difficult economic situation, Turkey still ranks among the 10 countries in Europe at FDI. Most foreign investors
were attracted to open a company in Turkey
due to the incentives offered by the authorities in order to encourage the foreign investments. One of our company formation agents in Turkey
can offer assistance and complete information.
Types of incentives in Turkey
The incentives are related to taxes for both intern and foreign investors. According to the type of business you want to develop in Turkey, there are many types of incentives: for general investments, regional, large investments (over 1 billion $), export and agriculture etc. Foreign investors who want to open companies in Turkey can explore the special investment zones created by the government and in which those who do business can benefit from many incentives. There are 3 types of special investment zones in Turkey: technology development zones, organized industrial zones, and free trade zones, which can be found in other countries as well.
Turkey's top industries are agriculture and food, automotive, healthcare and pharmaceuticals, business services, electronics. A particular domain that has developed fast in the last years in Turkey is hair transplantation
. This industry is worth about $250 million annually and attracts more than 15,000 people interested in these types of services. Below, our company formation specialists in Turkey
can help you set up a business in a special investment zone
. We can also assist with the incorporation of companies in various cities in Turkey, so foreign investors can explore all the possibilities this country has to offer.
What are the special investment zones?
As their name says, Turkish special investment zones are areas designated by the government in which various incentives and special treatment are applied to companies. Most of the special investment zones in Turkey have been created with the purpose of facilitating import and export activities, considering trading is one of the most important branches of the Turkish economy.
Many countries around the world have free zones
, however, Turkey
has also enabled technoparks
in which the government encourages research and development activities and high-tech activities
. Another type of special investment zones
which can be found in Turkey
are organized industrial zones
in which industrial activities are encouraged. Here is an infographic with extra details:
What special investment zones does Turkey have?
1. Technology development zones
can be chosen by investors interested in developing businesses in the research and development field. In Turkey, there are approximately 70 zones, however, 56 of them are operational, while 13 are under construction. They are located in Ankara, Istanbul, Kocaeli, Izmir
and other regions. The income of companies with activities in software development, research and development are exempt from income and corporate taxes. This incentive is available until 2023, as well as the one for sales of application software produced in these technology development zones. These sales are exempt from VAT and other exemptions are applied to the taxes on salaries of a part of the employees in these zones.
2. Organized industrial zones are well-known for their good infrastructure and social facilities that encourage foreign investors to open companies. Turkey offers 322 organized industrial zones in 80 provinces, but only 255 are operational and the rest of 67 are under construction. In these zones, the investors have important facilities for their activities: roads, communication, gas, electricity and almost everything they need for their economic activities.
The investors have to pay no VAT
for land purchasing, they are exempt from real estate duty during the next five years after they build a plant and from the municipality tax. Besides these, they have low costs at utilities.
3. Free zones are created for encouraging export businesses. In these zones, the normal regulations from economic fields are more flexible. Turkey has 19 free zones and 18 of them are operational and they are located near the EU and Asia markets, close to important Turkish ports. The goal of free zones is to encourage investments for exports and to attract foreign capital. The investors in these zones are exempt from paying customs duties, corporate income tax (if it is a manufacturing company), VAT, income tax on salaries of the employees (in certain situations). Besides these, firms can take profits and transfer them to their parent companies abroad.
Opening a company in a special investment zone in Turkey
Foreign entrepreneurs who want to set up companies in special investment zones are not required to comply with any specific requirements, on the contrary, they will benefit from simplified registration procedures. However, they must comply with the Free Zone Legislation which provides for the licenses which need to be obtained for starting a business in any of the Turkish special investment areas.
Just like in the case of companies established outside the investment zones, the limited liability company
is the preferred structure for free zone companies in Turkey
. Our company registration representatives in Turkey
can help foreign entrepreneurs who want to start their own businesses in any special investment zone
in this country. We can also advise on the licenses which need to be obtained in any of these areas. The licenses which need to be obtained when opening a Turkish company in a special investment zone
- - operating licenses which are granted for undertaking a wide range of activities;
- - the entry permit which enables companies to enter and operate in any special zone;
- - the warehousing permit which enables companies to offer warehousing services;
- - the open area use permit which is issued for specific activities completed in an open area;
- - special entry permit which is issued temporarily for those entering the area for specific purposes.
A particularity of companies operating in special investment areas
is that they are required to direct the taxes they pay to the special bank account opened with the Turkish National Bank for these zones. The money is then used for investments in the same zones.
The main advantages offered by Turkish special investment zones
The incentives offered in each type of special investment zone
target the type of activities completed by companies here, however, there are a few benefits offered by all the areas, no matter the activities completed by a company established here. Among these advantages we mention the following:
- - in free trade zones, all manufacturing companies are exempt from the corporate tax;
- - other tax exemptions refer to the free repatriation of profits as long as they are generated here;
- - the salaries of employees working in free trade zones are also exempt from taxation;
- - the infrastructure in all special investment zones is very developed and modern;
- - full foreign ownership is allowed in all special investment areas in Turkey;
- - most special investment zones provide for various infrastructure facilities.
Turkey is one of the few countries to provide for more than 300 special investment zones dedicated to such a wide variety of activities.
A free zone company in Istanbul – How can we help
Istanbul hosts 4 important investment zones: Istanbul Stock Exchange Free Zones, Istanbul Ataturk Free Zone
, Istanbul Tracia Free Zone, and Istanbul Leather Industry Free Zone. These important free trade zones were created during 1990 and 1998 and provide a wide range of business advantages for both local and foreign entrepreneurs. The tax facilities and the possibility of connecting with international hubs are important aspects considered by businessmen interested in starting companies in Turkey’s free trade zones. Plus, one can choose the type of activity he/she wants, such as repair and maintenance, manufacturing, warehousing, sale, and purchase, to name a few.
One should note that Istanbul Leather Industry Free Zone is one of the biggest in Turkey and hosts companies activating in sectors like textile, furniture, production of leather, machinery, and equipment, IT, cosmetics, pharmaceutical, automotive, and many more. This free trade zone in Istanbul hosts a large number of local and foreign companies that thrive in a safe and thriving business climate. Those interested in this special investment zone in Istanbul, Turkey can talk to our team of company formation agents in Turkey and solicit support for business registration. The licenses and permits can be obtained with our help, as our team can handle the requirements imposed.
What type of activities can I start in Istanbul Thrace Free Zone?
Istanbul Tracia or Thrace Free Zone is another great business destination tailored to the needs of foreigners in Turkey. Activities like trading, furniture production, financial services, engineering, light industry goods, textiles, electronics, gold metal processing are permitted in this free zone in Turkey. The company registration is simple in this free trade zone, and you can discuss all the terms with one of our company formation agents in Turkey. We are here to help.
FAQ about free trade zones in Turkey
1. Can I open an import and export company in a free zone in Turkey?
Yes, trading companies can be registered in a free zone in Turkey and benefit from a series of business advantages. You can discuss all the terms with our company formation agents in Turkey.
2. How many special investment zones are in Turkey?
Around 56 free zones are operational in Turkey, while the other 13 are about the open the doors to international and local investors.
3. What tax exemptions are available in a free zone in Turkey?
There is no VAT and no corporate income tax imposed in the special investment zones in Turkey until 2023. Employees in these zones benefit from a series of tax exemptions.
4. How many industrial zones are in Turkey?
There are around 322 industrial zones in Turkey and only 255 are operational at the moment.
5. What is the proper business form for a company in a free trade zone in Turkey?
The limited liability company is the recommended business structure in Turkey. An LLC can be easily registered in a free zone in Turkey, and you can solicit help from our agents.
6. Do I need a license to open a company in a free trade zone in Turkey?
Yes, specific activities imposed special licenses and permits. It is recommended to solicit help in this matter.
7. Is full ownership allowed in a special investment zone in Turkey?
Yes, complete ownership is permitted in a free zone in Turkey
and it represents one of the main advantages.
8. What are the benefits are in a special investment zone in Turkey?
Transportation, logistics, tax exemptions, and full ownership are the main benefits of a company registered in a special investment zone in Turkey. If you need assistance in this matter, please discuss all the details with our team of company formation agents in Turkey.
We have gathered a few facts and figures about the economy and business direction of Turkey that you might find them useful and interesting:
- Around USD 165 million was the total FDI stock for Turkey in 2019.
- Turkey ranks 33rd out of 190 economies in the world, according to the 2020 Doing Business report issued by the World Bank.
- Azerbaijan was the major investor in Turkey during January and March 2019.
- Even the greenfield investments are prolific in Turkey, around USD 3,9 billion being the total value registered in 2019.
If you need more information and assistance for setting up a company in Turkey
, you may contact our agents
. If you have any questions related to opening a company in a special investment zone in Turkey
, our local experts are at your disposal with advice and customized services. We can also help you register a company in any major city in Turkey