Turkey gives investors and business owners an alluring choice to create a free zone company thanks to its advantageous location and vibrant business environment.
To delve into this field, it is better to answer what is a free trade zone first. A free zone is a geographically defined area where trade restrictions like tariffs and quotas have been reduced or removed, allowing for the free exchange of goods and services. In this sense, a free zone company an organization that conducts business inside such restricted geographic areas.
What Are The Free Zones in Turkey?
Some of the free zones in Turkey are stated below.
- Antalya Free Zone: Based on Free Zone Law dated June 6, 1985, Law No. 3218 by Council of Ministers Decision, it is positioned to encourage businesses to engage in international trade and tourism-related activities.
- Istanbul Ataturk Airport Free Zone: Being one of the largest free trade zones, it is for large organizations in the information technology sector.
- Mersin Free Trade Zone: Located on the Mediterranean coast, its key sectors are automotive, textiles, and chemicals.
- Kocaeli Free Trade Zone: Attracting manufacturing, logistics, and technology businesses.
Benefits of Free Zone Business in Turkey
There are several advantages of free zone business in Turkey. These benefits are stated below.
- Tax Incentives: Value-added tax (VAT), customs duties, corporate income tax exemptions, or lower tax rates are frequently extended to businesses operating in free zones.
- Strategic Location: Since the geographic location of Turkey acts as a link between the Middle East, Asia, and Europe, companies engaged in international trade and logistics may benefit strategically from establishing a business in a Turkish-free zone.
- Benefits of Customs: Free zone business in Turkey grants some special benefits. For instance, since imports of goods into free zones are not subject to taxes or customs charges, businesses involved in international trade find it appealing as it makes the import and export of goods more affordable.
Legal Essentials
The main aims of free trade zones are to increase exports, draw in foreign investment, and foster economic growth. However, while achieving these goals, legal requirements should be addressed. For instance, approval from the Free Zones Directorate is required to establish and operate a free zone company in Turkey. Also, submitting the necessary legal documents to the relevant authorities within the specified timelines is essential.
Steps to Establish Your Free Zone Company
In Turkey, setting up a free zone business includes several procedures, such as planning, applying, getting approved, and going through different legal and administrative processes. The details of how to establish your free zone company are explained below.
- You need to choose the right free zone place. For this, you can conduct market research and select the free zone that best suits your company's and target market's needs.
- You should create a thorough business plan that describes the goals, organizational structure, projected financials, and operations. Then, submit your business plan to the Free Zones Directorate for preliminary approval.
- Establish your business in Turkey by registering it with the appropriate Trade Registry Office as soon as you have preliminary approval. Prepare the required documents, such as articles of association, passport copies, or notarised power of attorney, and submit them.
- Open a bank account in Turkey for your free zone company to operate the financial transactions.
- Based on your business activities, you may need additional licenses or permits. Therefore, you should apply for these with the appropriate authorities.
You can contact our Istanbul Lawyer Firm for more information about establishing your free zone company. Our company has highly qualified business and tax attorneys in Turkey who are experts in Turkish corporate law. Our team of corporate lawyers in Turkey can help you ensure your business operates within legal guidelines and navigates the complexities of Turkish corporate law.
FAQ About Free Zone Companies
Look at the frequently asked questions in the free zones. If you have more questions about this topic or want to solve a legal case related to a free zone company, you should consult a corporate lawyer in Turkey. At Istanbul Lawyer Firm, we provide all the information and legal guidance with our skilled English-speaking lawyers in Turkey.
Are there any tax advantages for companies in Turkish Free Zones?
Yes, there are. Full or partial exemptions from corporate income tax are frequently granted to businesses operating in Turkish Free Zones. Similarly, traded goods and services inside free zones might not be subject to VAT. In this way, they can lower the total cost of doing business for companies operating in the zone that engage in manufacturing, trading, and service-related activities.
How long does it take to establish a Free Zone company in Turkey?
The duration required to establish such a company in Turkey may differ depending on many variables, such as the specific free zone, the company type, and the success of the application procedure.
Are there any restrictions on business activities in Turkish Free Zones?
In the Turkish free zones, this broad field allows all kinds of industrial, commercial, and service-related activities to be carried out.
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