Free Zones in Turkey

Trade-in Turkey is of great importance, especially in the fields of import and export, and the free zones in Turkey are one of the most important features that encourage commercial investment in Turkey and the establishment of companies and other commercial transactions that receive facilities and incentives within the free zones.

We have dedicated this article to introduce you to the free zones in Turkey, their advantages, and their importance for foreign investors.

What do you know about free trade zones?

Free zones are areas designated for trade or industry and are located within the administrative and political borders of the state, but are considered outside the customs borders, that is, customs restrictions are applied on import and export through free zones in a very reduced way, and trade in free zones is often completely exempt from customs restrictions. 

Free zones in Turkey contribute significantly to increasing commercial investments that depend on import and export, as Turkey's strategic location is one of the most important reasons that encourage the activity of free zones in it. 

Increasing foreign direct investment, and commercial activities within the free zones in Turkey vary from commercial research activities to manufacturing, production, packaging, warehousing, software services, and other general trade procedures in Turkey.

The most important free zones in Turkey

There are 21 free zones operating in Turkey in a regular manner, and the following are the most important of these free zones in Turkey:

• Free Zone at New Istanbul Airport "Under Construction"

Instead of the free zone at the former Ataturk International Airport.

• Leather Industries Free Zone in Istanbul.

• Istanbul Movable Securities Free Zone

• Thrace Free Zone in Istanbul

• Izmir Mini Free Zone for Leather Industries.

• Technical Free Trade Zone of TUBITAK Marmara Research Center.

• Adana Free Zone - Yumurtalik

• Free Zone in the Aegean

• Antalya Free Zone

• Bursa Free Zone

• Denizli Free Zone

• Eastern Anatolia Free Zone

• European Free Zone

• Gaziantep Free Zone

• Kayseri Free Zone

• Kocaeli Free Zone

• Mardin Free Zone

• Mersin Free Zone

• Free Zone in Rize

• Samsun Free Zone

• Free Zone in Trabzon

The establishment of the first two free zones in Turkey dates back to 1985: Mersin Free Zone and Antalya Free Zone. The last three free zones in Turkey were operated in 2000 in Denizli, Bursa, and Kocaeli. 

Preparations are also underway to launch the free trade zone at Istanbul's new airport, which is expected to add wide importance to the international trade sector in Turkey, especially in the free zones.

Advantages of free zones in Turkey

Free trade zones in Turkey are characterized by the granting of many advantages that distinguish it from local trade, namely:

• 100% exemption from customs duties and taxes

• Exempting manufacturing companies and exporting companies from income tax at 100%.

• KDV tax exemption

• All infrastructure in free zones in Turkey is exempt from KDV and other taxes and fees.

• Exemption from special consumption tax

• Exemption from banking transaction taxes

• Exemption from stamp duties, stamps, and stamps on commercial documents during transactions within the free zones.

• 100% exemption from real estate tax and exemption from title deed fees when buying and selling real estate in free zones.

• The possibility of the goods to remain "storage" in the free zones for an unlimited period

• Lifting restrictions on transferring profits from free zones abroad or to Turkey

• Granting import permissions for used machines.

• Get plenty of raw materials and intermediate goods for manufacturing easily and at reduced costs

• Providing incentives for the production and export of low-cost goods.

• The possibility of "transit" trade for the sale of goods from outside Turkey to other countries.

• Low labor cost in free trade zones

• Easy access to Turkish ports

• There are no restrictions on the products in terms of their quality and prices

• There are no restrictions on foreign capital to invest

• All benefits are offered to all companies in the free trade zones equally, regardless of their nationality.

Objectives of free zones in Turkey

The purpose of establishing free zones in Turkey includes the following points

• Encouraging investment and production to strengthen the export market and increase the volume of Turkish exports outside the country

• Directing companies in Turkey to export

• Ensuring the flow of services and modern technical equipment to Turkey

• Provide more speed to attract foreign direct investment

• Improving international trade conditions

• Save time, effort, and costs during business transactions

• Providing new job opportunities

Turkey's annual profits from free zones

Turkey earns more than 22 billion US dollars annually from the total profits of its free zones (approximately between 22 and 22.3 billion dollars annually), and the following is a table of annual profits for the five most important free zones in Turkey:

The free zones in Turkey maintain a rate of change in their annual profits ranging between 2 to 4%, and the above-mentioned prices are considered the values ​​of the average profits in these free trade zones.

Establishing a company in a free zone in Turkey

The establishment of a company in the free zones in Turkey is distinguished from the establishment of companies in normal cases through the following procedures:

More need for financial and legal advice

Where the establishment of the company in the free zones requires greater reliance on financial and legal advisors.

Company license term:

The period of licensing a company in the free zones in Turkey is up to 15 years

Company license fee:

The license application fee is approximately $5,000

Company evaluation stage:

The company is evaluated by the General Directorate of Free Zones in Turkey, whose evaluation results in the acceptance of the license and the continuation of the company's founding steps on a routine basis. In the event of rejection, the license fee is returned to the owner of the company.

The company's location:

After the approval of the establishment of the company is issued, its location must be determined either by purchasing or renting a company headquarters, and the ownership or lease contract must be established in the General Directorate of Free Zones.

Company operation:

It is the last step, as you start directly with the company's activities in a normal manner and according to the license given to the company.

The costs of establishing a company in the free zones in Turkey:

The costs of establishing companies in any free zone in Turkey depend on the following points:

1. Company rent value:

It varies according to the free zone and the state in which it is located, and often the average rent per month per square meter is about 5 US dollars. This is in the event that the company is rented, but if he buys the property, he only has to pay the price of the property.

2. Licensing fees:

It amounts to approximately $5,000, and it can be refunded if the license is not accepted, but these fees cannot be refunded if the company is closed after accepting the license. 

There are no additional monthly expenses for companies established in the free trade zones in Turkey.