company establishment in freezone


Free zones are regulated under the Free Zones Law, the Free Zones Implementation Regulation and the Circulars of the General Directorate of Free Zones. According to the definition made in paragraph 1 of Article 6 of the Free Zones Law No. 3218, a free zone is; 

“Although it is a part of the Customs Territory of Turkey, free zones are places whose location and borders are determined by the President of the Republic, where goods not in free movement are placed without being subjected to any customs regime and without being put into free movement, provided that they are not used or consumed except for the cases stipulated in the customs legislation, which are accepted to be outside the Customs Territory of Turkey in terms of the application of import duties and trade policy measures and foreign exchange legislation, and where goods in free circulation benefit from the facilities normally associated with the export of goods due to their placement in a free zone.”

Free zones are special economic zones that are not subject to or patially subject to legal and administrative regulations on commercial, financial and economic areas in order to promote investment and production. Free Zones are areas with special conditions and privileges that are left outside the customs territory in the commercial sense, although they are within the borders of Turkey. According to the Free Zone Law: trade between the free zone and other parts of Turkey is subejct to the foreign trade regime. 


Free Zones;

  • Creating a suitable environment that will allow foreign capital and technologies to be brought into the country, 
  • Some of the raw materials and intermediate goods needed by industrialists can be procured easily, in the required quantity and without loss of time, 
  • Production and export of low-cost goods through incentives and advantages, 
  • Transit sales of goods coming from outside Turkey to other countries, 
  • Creating new employment opportunities, 
  • It functions as a stepping stone to facilitate and accelerate the export of Turkish export products. 


Local or foreign real or foreign legal entities can operate in free zones by providing the necessary procedures and obtaining an operating license. There are no restrictions on domestic or foreign capital for legal entities operating in free zones. Investors can establish a company by showing the free zone as the company address, provided that they operate exclusively in the free zone. Companies willing to establish a company in the free zone are required to obtain a free zone operating license.


To obtain an operating license, a license fee of USD 5000 must be paid. After the license fee is paid, a license is given for 20 years for production activities and 15 years for purchase and sale and other activities. If the company to operate in the free zone is an investor, these periods are determined as 45 years for production and 30 years for other activities.


  1. Production License: With this license, the purchase and sale, storage, branding, packaging, labeling and maintenance and repair of raw materials and intermediate materials used in production and production can be carried out. 
  2. Trade License (Buying-Selling): Buying and selling, storage, labeling, packaging and labeling of traded goods can be carried out.
  3. Warehouse License: Goods of users or other non-user persons or organizations can be stored
  4. Assembly-Disassembly License: Assembly or disassembly of goods can be done with this type of license.
  5. Maintenance-Repairment License: Maintenance and repair of goods can be carried out with this type of license.
  6. Leasing License: With this license, ready workplaces can be rented to users.
  7. Other: This type of license includes service sector, banking, brokers, engineering, consultancy, transportation, agency, etc.

After deciding on your field of activity, one of the license types listed above is selected and applied to the Ministry of Trade. If you intend to operate in more than one field, two different applications must be made for two different types of licenses. For example; if you want to obtain both a production license and a trading license, you need to pay 5000 USD (10.000 USD in total) for each license type separately.


In terms of the implementation of the provisions of origin, they are considered as the Customs Territory of Turkey. Therefore, goods shipped from Turkey to the free zone and goods shipped from the free zone to Turkey are subject to the foreign trade regime.

However, foreign trade regime is not applied between free zones and other countries and free zones. Goods sold from Turkey to the free zone are subject to the export regime and goods sold from the free zone to Turkey are subject to the import regime. Users carrying out production activities in the free zone are not obliged to pay corporate tax or income tax for their earnings in the free zone, and free zone users can easily transfer their earnings without the permission of the competent authorities, and they can also purchase goods and services from Turkey without VAT.

A) Tax Practices in Businesses Operating in Turkish Free Zones

In this section, the tax incentives in force regarding the activities of the enterprises operating in free zones in the region are explained. The tax practices applied in free zones in accordance with the provisions of the Corporate Tax Law, Income Tax Law and Value Added Tax Law and other financial legislation are explained in detail below.

1. Income Tax and Corporate Tax Practices in Free Zones 

The free zone users that obtained operating license other than “production” after 06/02/2004 do not enjoy income or corporate tax exemption.  The earnings of taxpayers who started to operate in free zones as of 06.02.2004 will be subject to income or corporate tax

2. Value Added Tax Practices in Free Zones 

Value Added Tax (VAT) is defined as “transaction tax” in the tax literature, and the definition of a transaction or transaction in simple terms can be expressed as the delivery of goods or service performance.  According to the VAT General Implementation Communiqué regarding the situation of enterprises operating in free zones: export deliveries and services related to these deliveries are exempt from VAT. Therefore, goods sold from Turkey to free zones are subject to the export regime and are exempt from value added tax (VAT).


Corporate Tax0% (exempt)Not exempt
Income Tax on Employee Wages
0% (exempt)
Not exempt
Value Added Tax (VAT)0% (exempt)0% (exempt)
Customs Duties0% (exempt)0% (exempt)

B. Advantageous of Turkish Free Zones in General 

1. 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 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 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 zone 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 zone users that obtained operating license other than production after 06/02/2004 do not enjoy income or corporate tax exemption.

2. Opportunity of Medium- and Long-Term Planning

The validity period of an operating license: 

  1. 15 years for tenant users. 
  2. 20 years for manufacturer tenant users. 
  3. 30 years for users who build their own working premises (investor users). 
  4. 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. 

3. Opportunity to Transfer Profits 

        The revenue and earnings from free zone activities can be freely transferred to Turkey or                    abroad without any permission.            

4. Facilitation of Foreign Trade 

Since the goods sold from Turkey to free zones are subject to 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 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. 

5. 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 on the goods of third country origin at the entrance into the free zones and exit to the third countries. 

6. 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. 

7. Equal Treatment

The incentives and advantages provided in the free zones are available to all firms regardless of their origin.

8. No Time Limitation 

The goods can remain in the zones without any time limit.

9. 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 

10. Inflation Accounting Opportunity 

Every payment in the Turkish Free Zones is done with Convertible Currencies. 

11. Access to Domestic and Foreign Markets 

In contrast to most of the free zones in the world, sales to the domestic market except for consumer and risky products are allowed. 

12. Reduced Bureaucratic Procedures and Dynamic Management 

During application and operation process

13. Strategic Location 

Turkish Free 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. 

14. Competitive Infrastructure Standards 

Infrastructure of the Turkish Free Zones is competitive with international standards. 

15. 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.

16. Opportunity to Real Estate Tax Exemption

Buildings located in the free zone are exempt from real estate tax in order to reduce the investment costs of companies.

17. No Restriction on the Employment of Qualified Foreign Employees

The foreigners to be employed by the company operating in the free zone must be managers or qualified personnel. A company is allowed to employ any number of foreign managers or qualified personnel. However, the foreigner to be employed in the company must be qualified personnel.


In this section, there will a comparative study between a Conventional LLC in Turkey and LLC in Turkish Free Zones. Since the tax regime and general advantageous are explained above here the comparison will be basic. 

Conventional LLC in Turkey LLC in Turkish Free Zones

There is no licence required to establish a conventional LLC in Turkey. 
There is no time limit for the company to be operating 
Once the documents are ready, the company may be established within a week.
There is no limitation for the company location. 
Cannot enjoy the advantageous listed in the previous section. 
Is not exempt from stamp duty 
Subject to Corporate & Income Tax
No exemption form VAT 

USD 5.000,00 needs to be paid in order to obtain the operation licence.
The company may operate until the licence expires.
The company will be established once the operation license is obtained 
Company headquarters must be located inside Free Zone 
Advantages listed in the previous section 
100% exemption from stamp duty 
Subject to Corporate & Income Tax (Except Production) 
Exempt from VAT as explained above 

What are the Free Zones Operating in Turkey?

  1. Mersin Free Zone 
  2. Antalya Free Zone
  3. Ege Serbest Free Zone
  4. İstanbul Atatürk Airport Free Zone
  5. Trabzon Free Zone
  6. İstanbul Trakya Free Zone
  7. Adana Yumurtalık Free Zone
  8. İstanbul Endüstri ve Ticaret Free Zone
  9. Samsun Free Zone
  10. Avrupa Free Zone
  11. Rize Serbest Bölgesi 
  12. Kayseri Free Zone
  13. İzmir Free Zone
  14. Gaziantep Free Zone
  15. Tübitak-Mam Free Zone
  16. Denizli Free Zone
  17. Bursa Free Zone
  18. Kocaeli Free Zone


After deciding in which area and with which type of license to operate, one of the free zones listed above is selected. An application is made to the selected free zone and an area is rented for a short period of time. A license application is made and your application is taken into the evaluation stage by the free zone. Following the positive outcome of the application evaluation, an agreement is made with the free zone and commercial activity is started. If the application evaluation is negative, the application fee is returned to the applicant.


When goods arrive in Turkey by air, highway or sea, customs procedures are not carried out at the airport or port where the products land. Goods are brought to the free zone areas from where they land in Turkey. The first customs procedures of the goods are carried out in the free zone areas.