Free Trade Zones of Turkey are defined as fenced-in areas in which special regulatory treatment exists for the operating users in order to promote exports of goods and services. Free zones offer a more convenient and flexible business climate in order to increase trade volume and export for some industrial and commercial activities as compared to the other parts of the country.
Roles of Free Trade Zones of Turkey
- Promoting export-oriented investment and production.
- Accelerating foreign direct investment and technology access.
- Directing enterprises towards export.
- Developing international trade.
Free Trade Zones Activities
In general, all kind of activities can be performed in Turkish Free Zones such as:
- Research and Development (R&D),
- General trading,
- Banking and insurance.
Investors are free to construct their own premises, while zones have also available office spaces or warehouses on a rental basis with attractive terms. All fields of activities open to Turkish companies is also open to the joint-venture of foreign companies.
Locations of Free Trade Zones in Turkey
|FREE ZONES IN TURKEY||DATE OF EST.|
|1||MERSIN FREE ZONE||1985|
|2||ANTALYA FREE ZONE||1985|
|3||AEGEAN FREE ZONE||1987|
|4||ISTANBUL ATATURK AIRPORT FREE ZONE||1990|
|5||TRABZON FREE ZONE||1990|
|6||ISTANBUL THRACE FREE ZONE||1990|
|7||ADANA YUMURTALIK FREE ZONE||1992|
|8||ISTANBUL INDUSTRY & TRADE FREE ZONE||1992|
|9||MARDIN FREE ZONE||1994|
|10||SAMSUN FREE ZONE||1995|
|11||EUROPE FREE ZONE||1996|
|12||RIZE FREE ZONE||1997|
|13||KAYSERI FREE ZONE||1997|
|14||IZMIR FREE ZONE||1997|
|15||GAZIANTEP FREE ZONE||1998|
|16||TUBITAK-MRC FREE ZONE||1999|
|17||DENIZLI FREE ZONE||2000|
|18||BURSA FREE ZONE||2000|
|19||KOCAELI FREE ZONE||2000|
Please click here for an interactive map with links to each Turkish FTZ’s website (you will need to select “FZs” on the “Key Locations/Sites & Facilities” menu on the right-hand side of the map).
Advantages & incentives offered by Free Trade Zones of Turkey
- Exemption from corporate income tax: Manufacturing companies are 100% exempt from corporate tax over their profits (the regular corporate tax rate in Turkey is 20%),
- Free transfer of profits: profits generated at free zone can be transferred to Turkey or to other countries without the need for any permission,
- Income tax exemption over salaries: Manufacturing companies are 100% exempt from income tax over the salaries of their employees if they sell minimum 85% of their production abroad (the regular income tax rate over salaries in Turkey is between 15% to 35%).
- Since free zones are legally outside the customs borders of Turkey, custom related taxes and regulations are not applicable to goods entering the zones (Value-Added Tax (VAT), customs duties, Resource Utilization Support Fund tax (RUSF, normally 6%),
- Companies can decrease their costs by keeping their stocks in a tax-free environment and/or basing their re-exports, transit trade, packaging, labeling and other similar operations within free trade zones.
- 2nd hand machinery can be imported freely in to Free Trade Zones with no age limitation,
- Free circulation of goods within the EU Market,
- Lower construction and infrastructure service costs (exempt from VAT),
- 100% foreign investment is allowed, without any requirement for minimum capital,
- Bookkeeping and accounting can be done in foreign currency,
- Sales to domestic market is allowed,
- Easy to get work permits for expatriate employees,
- Stocks can be kept in FTZs duty-free for an unlimited period of time.
Opportunity to Benefit from Tax Advantages for Manufacturer Users
- Until the end of the taxation year including the date Turkey becomes a full member of the European Union, the earnings of the manufacturer users, generated through the sales of the goods they produced in the Free Trade Zones, are exempted from the income or corporate taxes.
- The wages of the workers employed by the users that export at least 85 percent of the FOB value of the goods they produce in the Free Trade Zones are exempted from income tax. The Council of Ministers can reduce this rate to 50 percent.
- The transactions and arranged documents related to the activities carried out in the zones by the manufacturer users are exempt from stamp duties and fees.
- The Free Trade Zones users that obtained “operating license” other than “production” before 06/02/2004, the income or corporate tax exemption continues during the validity period of the Operating License.
- The Free Trade Zones users that obtained operating license other than production after 06/02/2004 do not enjoy income or corporate tax exemption.
The opportunity for Medium and Long Term Planning
The validity period of an operating license:
- 15 years for tenant users.
- 20 years for manufacturer tenant users.
- 30 years for users who build their own working premises (investor users).
- 45 years for manufacturer-investor users.
Building plots and buildings on Treasury owned land can be leased or granted easement until 49 years for the investor users.
Opportunity to Transfer Profits
The revenue and earnings from free zone activities can be freely transferred to Turkey or abroad without any permission.
Facilitation of Foreign Trade
Since the goods sold from Turkey to free zones are subject to the export regime, free zone users can buy goods and services from Turkey without paying value-added tax. On the other hand, trade between free zones and third countries is not subject to the foreign trade regime.
Moreover, upon request, goods of Turkish origin in value less than 5000 US $ or its equivalent in Turkish Lira can be exempted from export procedures.
Trade Facility Free from Customs Duty Procedure
The goods in free circulation can be sent to Turkey or to the EU countries from the free zones without any customs duty payment. Moreover, no customs duty is applied to the goods of third country origin at the entrance into the free zones and exit to the third country.
Easy Access to EU Countries
Since free zones are part of the Turkey-EU Customs Territory, the goods in free circulation can be sent to the EU Countries by an A.TR certificate. Customs duties for the goods of third country origin are also not paid at the entry into the free zones. However, the goods of third country origin that are not in free circulation can be sent to the EU countries by an A.TR certificate, only after the customs duties are paid over the rates determined in the Common Customs Tariff.
The incentives and advantages provided in the free zones are available to all firms regardless of their origin.
No Time Limitation
The goods can remain in the zones without any time limit.
Managing Trade Activities According to Market Demands and Conditions
In the Turkish Free Zones, unless the manufacturers demand, any authority regarding prices, quality, and standards granted to public institutions and agencies by-laws or by other legislation is not valid. Also, legislative provisions pertaining to customs and foreign exchange obligations are not applicable in the zones.
Inflation Accounting Opportunity
Every payment in the Turkish Free Zones is done with Convertible Currencies.
Access to Domestic and Foreign Markets
In contrast to most of the free zones in the world, sales to the domestic market with the exception of consumer and risky products are allowed.
Reduced Bureaucratic Procedures and Dynamic Management
During application and operation process bureaucracy is minimized. Professional private sector companies manage free zones.
Turkish Free Trade Zones are close to the EU and Middle East Markets, adjacent to the major Turkish Ports on the Mediterranean, Aegean and Black Sea and have easy access to international airports and highways.
Competitive Infrastructure Standards
The infrastructure of the Turkish Free Trade Zones is competitive with international standards.
Supply Chain Management
Turkish Free Zones, particularly for the companies which manufacture for export, offer supply chain management opportunities in providing intermediate and raw materials.
Turkish Free Trade Zones Sources:
- General Outlook
- Turkish Free Zones Legislation
- Advantages of the Turkish Free Zones
- Representatives of Turkish Free Zones
- Sale or Rent Rates for Free Zones
- INVESTMENT GUIDE