Turkey's Free Trade Zones offer foreign investors unparalleled opportunities to establish tax-efficient businesses in a strategically located market. With the expert guidance of a reputable Turkish Law Firm and support from an English Speaking Turkish Lawyer, setting up a company in a Turkish Free Trade Zone can deliver significant commercial benefits. This guide, prepared by the Best Lawyer in Turkey, outlines the legal processes and advantages associated with Free Trade Zone company formation.
What Are Free Trade Zones in Turkey?
Free Trade Zones (FTZs) in Turkey are special areas considered outside of the country's customs territory, designed to promote export-oriented investments. They offer relaxed regulatory environments, fiscal incentives, and simplified administrative procedures.
Key Legal Framework Governing Free Trade Zones
- Free Zones Law No. 3218
- Free Zones Implementation Regulation
- Customs Law No. 4458
- Investment Incentive Legislation
Major Free Trade Zones in Turkey
- İstanbul Atatürk Airport Free Zone (İstanbul)
- İzmir Free Zone (Ege Serbest Bölgesi - ESBAŞ)
- Mersin Free Zone
- Antalya Free Zone
- European Free Zone (Çorlu)
Legal Advantages of Setting Up in a Free Trade Zone
- Customs Duty and VAT Exemptions: No customs duties or VAT on goods entering the zone.
- Corporate Tax Advantages: 100% exemption from corporate income tax for manufacturing companies exporting at least 85% of their production.
- Profit Repatriation: No restrictions on profit transfers abroad.
- Exemption from Value-Added Services Tax: Services provided within the zone are exempt from VAT.
- Employment Incentives: Exemption from income tax for employee salaries (for companies meeting export criteria).
Steps to Set Up a Free Trade Zone Company in Turkey
1. Apply for an Operating License
Submit an application to the relevant Free Zone Directorate with a detailed business plan and financial projections.
2. Obtain Pre-Approval
Once the preliminary evaluation is positive, conditional approval is granted, allowing the applicant to proceed with incorporation steps.
3. Company Formation
Establish a new company under Turkish Commercial Code (typically as a Limited Liability Company or Joint Stock Company). For detailed guidance, see Company Formation in Turkey.
4. Lease or Purchase Property within the Zone
Secure a land parcel, warehouse, or office space based on the scope of operations.
5. Finalize Registration and Start Operations
Complete Trade Registry registration, open bank accounts, obtain tax numbers, and initiate business activities within the Free Zone framework.
Important Legal Compliance Requirements
- Annual activity reporting to Free Zone authorities
- Maintenance of separate accounting records for Free Zone operations
- Compliance with export quotas and operational conditions defined in the license
Potential Restrictions and Considerations
- Manufacturing activities require facility investment within the zone.
- Service companies must operate activities permitted within the scope of the license.
- Products intended for the Turkish domestic market are subject to customs procedures and taxes.
Why Work with ER&GUN&ER Turkish Law Firm?
- Comprehensive Free Trade Zone company setup services
- Legal due diligence on site selection and lease agreements
- Drafting and negotiating Operating License applications
- Regulatory compliance and reporting support
- Strategic legal advice for foreign investors
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Frequently Asked Questions (FAQs)
- Can a foreign investor fully own a Free Trade Zone company in Turkey? Yes, full foreign ownership is permitted without any restrictions.
- Are profits generated in Free Zones tax-free? Yes, for companies meeting export criteria, significant corporate tax exemptions apply.
- Is a separate company required for Free Zone operations? Yes, companies operating in Free Zones must be registered in Turkey.
- Can Free Zone companies sell goods domestically in Turkey? Yes, but sales to the domestic market are subject to customs duties and taxes.
- How long does it take to set up a Free Trade Zone company? Typically 2–3 months depending on approvals and setup speed.
- Are there any minimum capital requirements? Capital requirements vary based on zone regulations and type of operation.
- Can Free Zone companies hire foreign employees? Yes, subject to obtaining work permits and compliance with labor regulations.
- Do Free Zones offer sector-specific incentives? Yes, particularly for manufacturing, technology, logistics, and export-oriented industries.
- Is land ownership allowed in Free Zones? Typically, land use is based on long-term leases rather than outright ownership.
- Why work with the Best Lawyer in Turkey for Free Zone setup? Expert legal advice ensures correct licensing, compliance, and maximum incentive utilization.
Conclusion: Maximize Your Investment Potential with Free Zones in Turkey
Setting up a company in a Turkish Free Trade Zone offers unmatched advantages for foreign investors. Partnering with the Best Lawyer in Turkey from a trusted Turkish Law Firm and working with English Speaking Turkish Lawyers ensures a smooth and compliant setup process. Contact us today to unlock the full benefits of Turkey's Free Zones for your business growth.