Establishing a Company in Turkey’s Free Zones: A Strategic Guide

Turkish Free Zones (FTZs) are specially designated areas considered outside the national customs territory. These zones offer a unique legal and financial environment designed to boost export-oriented activities, attract Foreign Direct Investment (FDI), and integrate Turkey with global supply chains.

At Atlas Global Audit & Accounting, we provide end-to-end consultancy for global entrepreneurs looking to leverage the unparalleled advantages of Turkey’s 19 strategic free zones.

1. Key Objectives of Turkish Free Zones

Turkish FTZs are established with a clear vision to support international trade:

• Export Promotion: Encouraging manufacturing specifically for international markets.
• FDI & Joint Ventures: Creating a favorable climate for foreign capital and technology transfer.
• Global Integration: Accelerating the integration of the Turkish economy into world trade networks.
• R&D Hubs: Fostering a high-tech environment for research and development.

2. Major Advantages and Incentives

Turkey provides one of the most competitive free zone incentive packages globally. Companies operating within these zones enjoy:

• 100% Customs Duty Exemption: Full relief from customs duties and similar assorted taxes.
• 100% Corporate Tax Exemption: Manufacturing companies are entirely exempt from corporate income tax on their export-based earnings.
• 100% VAT and SCT Exemption: Exemption from Value Added Tax and Special Consumption Tax for goods brought into the zone.
• 100% Income Tax Exemption on Wages: For companies that export at least 85% of the FOB value of their manufactured goods, employee wages are exempt from income tax.
• 100% Stamp Duty Exemption: Relevant documents and contracts are exempt from stamp duty.
• Free Profit Transfer: Companies can freely transfer their profits and capital to Turkey or abroad without any restrictions or prior permission.
• Unlimited Duration for Goods: Goods can remain in the zones for an unlimited period without tax implications.

3. Strategic Operational Benefits

Beyond tax incentives, FTZs offer logistical and administrative ease:

• Strategic Proximity: Immediate access to major Mediterranean, Aegean, and Black Sea ports, international airports, and highways.
• EU Access: Since Turkey is part of the EU Customs Union, goods in free circulation can be sent to EU countries via an A.TR certificate.
• Simplified Bureaucracy: Administrative processes are streamlined and managed by professional private sector operators.
• Currency Flexibility: Payments in Turkish Free Zones are typically handled in convertible foreign currencies, offering a natural hedge against inflation.
• Second-Hand Equipment: Investors are allowed to bring second-hand machinery of any age into the zone for investment purposes.

4. Step-by-Step Company Formation Process

Establishing a presence in a Turkish Free Zone follows a structured 6-step path:

1. Application for Operating License:Submit a detailed application to the Ministry of Trade (General Directorate of Free Zones). This includes paying the 5,000 USD application fee.
2. Company Registration:Upon receiving “pre-approval,” the company (or branch) is formally registered with the Turkish Trade Registry.
3. Lease Agreement:Sign a rental contract with the specific Free Zone Founder/Operator.
4. Final Operating License:Submit the lease contract to the Ministry to receive the final Operating License.
5. Tax Office Registration:Obtain a tax identification number and complete the local tax office entry.
6. Banking & Activation:Open a specialized bank account within the Free Zone branch of your chosen bank.
7. Required Documents for Application

• A comprehensive profile of the applicant and the intended zone operations.
• Trade Registration documents of the parent company (if opening a branch).
• Financial statements (Balance Sheets and Income Statements) for the last three years.
• Proof of the 5,000 USD application fee deposit to the Central Bank of Turkey.
• Draft Articles of Association (for new company formation).
• Product HS Codes (12 digits) and production flow diagrams (for manufacturers).

Strategic Locations: Free Zones in Turkey

Turkey currently operates 19 Free Zones, each offering unique regional advantages:

• Istanbul: Atatürk Airport, Industry & Trade, and Trakya Free Zones.
• Aegean/Izmir: Ege (ESBAS) and Izmir Free Zones.
• Mediterranean: Mersin, Antalya, and Yumurtalik (Adana).
• Marmara: Bursa, Kocaeli, and ASB (European Free Zone).
• Others: Samsun, Trabzon, Rize, Denizli, Kayseri, Gaziantep, Mardin, and TUBITAK-MAM Technology Zone.

How Atlas Global Audit & Accounting Supports Your Entry

Setting up in a Free Zone requires specialized knowledge of both customs and tax regulations. Atlas Global CPA provides “One-Stop-Shop” solutions:

• Feasibility Studies: Helping you choose the right zone based on your industry.
• Licensing Management: Handling the entire application process with the Ministry of Trade.
• Accounting & Audit: Ensuring 100% compliance with FTZ-specific accounting standards and the 85% export rule.
• Payroll & Expatriate Services: Managing tax-exempt payroll and work permits for foreign staff.

Maximize your global trade potential from Turkey’s strategic hubs. Contact Atlas Global Audit & Accounting for a professional consultation.