Establishing a Free Zone Company in Turkiye in 2026

Establishing a free zone company in Turkey offers exceptional opportunities for foreign investors seeking tax advantages, operational flexibility, and strategic market access. The combination of corporate tax exemptions, customs duty relief, simplified procedures, and unrestricted profit repatriation makes Turkish free zones highly competitive on the global stage.

However, navigating the legal requirements, compliance obligations, and application procedures requires expert guidance to ensure success. Mistakes in documentation, licensing applications, or Articles of Association can result in costly delays or rejections.

Table of Contents

Turkey’s free zones have become strategic hubs for international businesses seeking tax advantages and simplified operations. With 19 operational free zones strategically located across the country, foreign investors can benefit from exceptional incentives that make Turkey one of the most attractive destinations for export-oriented businesses in 2026.

Investing in Turkey’s Free Zones offers an unprecedented gateway to global markets, combining strategic location with powerful tax incentives. As Legalixa Law Firm, a leading legal expert since 1992, we’ve guided over 260 foreign-shareholder companies to successful registration. This professional guide provides you with the essential steps and advantages of establishing your business in a Turkish Free Zone.

What is a Turkish Free Zone Company?

Turkish Free Zones (Serbest Bölgeler) are specially designated areas considered outside Turkey’s customs territory for foreign trade, customs, and exchange regulations, while still being within the political borders of the Republic of Turkey.

Their primary goal is to promote export-oriented investment, encourage Foreign Direct Investment (FDI), and facilitate the transfer of technology. Setting up a company here means your operations benefit from a unique, flexible regulatory framework designed for global trade.

Exceptional Benefits of Turkey Free Zones

The incentives offered in Free Zones are the biggest draw for international investors. These benefits are available to all firms, regardless of their origin, ensuring equal treatment.

• Tax Advantages for ManufacturersManufacturing companies enjoy the most significant incentives. Until the year Turkey gains full EU membership, manufacturer users are exempt from Corporate Tax and Income Tax on their earnings generated through the sale of goods produced in the zone.
  • Staff Income Tax Exemption: Wages of employees in manufacturing companies are exempt from income tax, provided the company exports at least 85% of the FOB value of the goods produced.
  • VAT and Customs Duty Exemption: Goods entering the Free Zone from abroad or Turkey are exempt from VAT and Customs Duties. Transactions in the zone are also exempt from Stamp Duty and Fees.
• Operational & Financial Flexibility
  • Free Transfer of Profits: All revenues and earnings derived from Free Zone activities can be freely transferred abroad or to Turkey without prior permission.
  • No Time Limit on Goods: Goods can remain in the Free Zones for an unlimited period, offering great flexibility for warehousing and inventory management.
  • Foreign Currency Operations: Transactions within the Free Zone are typically carried out in convertible foreign currency.
• Strategic Geographical Advantage: Turkey’s 19 Free Zones are strategically located near major ports, airports, and transport hubs, providing easy access to the European, Middle Eastern, North African, and Central Asian markets. This positioning significantly reduces logistics costs and transit times for global supply chains.

Essential Steps for Free Zone Company Setup

Establishing a company in a Turkish Free Zone involves two main stages: obtaining the Operating License and completing the company registration.

1. Activity/Operating License Application

This is the critical first step, as you must obtain approval to operate in the Free Zone.

• Application Submission: The investor (individual or legal entity) must submit an Operating License Application Form to the Ministry of Trade‘s General Directorate of Free Zones, along with a detailed business plan or Introductory Information Letter about the planned activities.
• Application Fee: A $5,000 application fee must be paid. This fee is refunded if the application is rejected.
• Evaluation: The Ministry of Trade evaluates the application based on the nature of the activity, its potential to generate foreign exchange, and its alignment with the Free Zone’s objectives.
• License Duration: If approved, the Operating License is granted. For tenant-manufacturer users, the license is typically valid for 20 years, providing long-term planning security.

2. Company Incorporation in the Free Zone

Once the Operating License is secured, the final legal setup of the company begins, which is similar to a standard company formation in Turkey, but with a Free Zone address.

• Choose a Legal Entity: The most common structures are the Limited Liability Company (LLC/Ltd. Şti.) or the Joint Stock Company (JSC/A.Ş.). We highly recommend consulting a legal professional to choose the optimal structure.
• Prepare Documents: This includes drafting the Articles of Association (AoA), securing the lease agreement for the Free Zone office/space, and preparing notarized copies of shareholder passports.
  • For a general overview of required documents, see our detailed guide on Company Setup in Turkey.
• Registration: The documents, along with the approved Operating License, are submitted to the relevant Trade Registry Directorate within the Free Zone.
• Signature Circular & Tax ID: Following registration, the company’s authorized signatories will obtain a Signature Circular and the company will be registered with the local Tax Office to receive its official tax identification number.

7 Key Benefits of Free Zone Company Setup in Turkey

1. Corporate Tax Exemption

Manufacturing companies established in free zones benefit from 100% exemption from corporate tax. This applies to profits derived from production and export activities, representing substantial savings compared to Turkey’s standard 25% corporate tax rate.

2. VAT and Customs Duty Exemptions

All goods and services delivered into free zones are exempt from Value Added Tax (VAT). Additionally, imports of raw materials, machinery, and equipment used in production are exempt from customs duties, significantly reducing initial investment costs.

3. Withholding Tax Relief

Dividends, interest payments, and royalties paid to non-resident shareholders are free from withholding tax, enhancing overall returns and simplifying profit distribution to international investors.

4. Unrestricted Profit Repatriation

Companies can freely transfer profits from free zones abroad without restrictions. There are no exchange controls, allowing businesses to repatriate capital, dividends, and proceeds from asset sales in foreign currency without bureaucratic hurdles.

5. Simplified Administrative Procedures

Administrative procedures are streamlined to facilitate business operations. This includes faster company formation, simplified licensing processes, and quicker customs clearance compared to standard Turkish business registration.

6. Access to EU Markets

Thanks to Turkey’s Customs Union Agreement with the European Union, goods exported from Turkish free zones can enter EU markets without additional import taxes, provided they meet origin criteria. This creates seamless access to one of the world’s largest consumer markets.

7. Full Foreign Ownership

Foreign investors can own 100% of companies established in Turkish free zones without any requirement for local partnership. This provides complete control over business operations and strategic decision-making.

Eligible Business Activities in Free Zones

Free zones accommodate diverse business activities, including:

• Manufacturing and production of goods for export
• Assembly and disassembly operations
• Trading and warehousing activities
• Logistics and distribution services
• Research and development operations
• Maintenance and repair services
• Banking, insurance, and financial leasing
• Engineering and consultancy services

The specific activities permitted may vary by zone, so it’s essential to verify with the relevant Free Zone Directorate during the planning phase.

Compliance and Key Legal Considerations

While Free Zones offer substantial exemptions, companies are still required to comply with Turkish Law in certain areas, particularly regarding labor law and certain regulatory reporting.

• Employment: Turkish labor law provisions generally apply, though Free Zone companies have certain flexibility in employing foreign staff and benefits from the Income Tax withholding exemption on salaries for manufacturer-exporters.
• Accounting: Companies must maintain accounting records in accordance with Turkish Tax Procedure Law.
• Foreign Exchange: All commercial payments and transactions are conducted in convertible foreign currencies, simplifying international trade.

Timeline and Costs

Setup Timeline:

• With physical presence in Turkey: 20-30 days
• Remote setup (without physical presence): 45-60 days

Key Costs:

• Application fee: 5,000 USD (non-refundable upon approval)
• Minimum capital: 50,000 TL
• Legal and incorporation fees: Variable based on services required
• Annual activity license fees: As determined by zone authorities

For transparent pricing and comprehensive services, contact Legalixa Law Firm for a detailed quotation.

Important Compliance Requirements

Free zone companies must adhere to specific obligations:

• Any changes to title, purpose, headquarters, or duration require approval from the Free Zones Directorate before trade registry registration
• Submit annual activity reports to Free Zone authorities
• Maintain separate accounting records for free zone operations
• Comply with export quotas and operational conditions defined in the license
• Products intended for the Turkish domestic market are subject to customs duties and taxes

Common Mistakes to Avoid

1. Inadequate Documentation: Ensure all documents are properly notarized, apostilled, and translated into Turkish by certified translators.
2. Incorrect Articles of Association: The Articles must comply with Circular No. 1998/4; non-compliant drafts will be rejected.
3. Missing the 30-Day Deadline: After receiving the appropriateness letter, failing to complete incorporation within 30 days results in application cancellation.
4. Unclear Activity Descriptions: Be specific about planned business activities in your application to avoid licensing complications.
5. Ignoring Domestic Sales Implications: Remember that selling to the Turkish domestic market triggers customs duties and VAT obligations.

Free Zone vs. Regular Company: Which is Right for You?

Choose a Free Zone Company if:

• Your business is primarily export-oriented (75%+ of sales)
• You seek maximum tax advantages
• Your operations involve significant imports of raw materials or equipment
• You need simplified customs procedures
• You plan to access EU markets through Turkey’s customs union

Choose a Regular Turkish Company if:

• Your primary market is domestic Turkish consumers
• You operate service businesses focused on local clients
• Your business model doesn’t justify free zone compliance requirements
• You need flexibility to operate anywhere in Turkey

For guidance on standard company formation, explore our Company Registration Services.

Why International Investors Choose Turkish Free Zones

Turkey offers compelling advantages that attract sophisticated international investors:

Strategic Geographic Location: Access to 1.5 billion consumers across Europe, Middle East, North Africa, and Central Asia within a 4-hour flight radius.

Skilled Workforce: Turkey’s young, educated workforce provides competitive labor costs combined with technical expertise, particularly in manufacturing and technology sectors.

Modern Infrastructure: Free zones feature state-of-the-art facilities, including modern transportation networks, utilities (electricity, water, gas, telecommunications), and logistics services.

Legal Protections: Long-term lease agreements (up to 49 years) with renewal options, investor guarantees against arbitrary regulatory changes, and access to international arbitration for dispute resolution.

Economic Stability: Despite regional challenges, Turkey maintains robust economic growth and continues attracting foreign direct investment across multiple sectors.

FAQs About Establishing a Free Zone Company in Turkiye

Q1: Can foreigners own 100% of a free zone company in Turkey?

Yes, foreign investors can own 100% of companies established in Turkish free zones without any requirement for local partnership or representation. This provides complete control over business operations, profit distribution, and strategic decisions.

Q2: How long does it take to set up a free zone company in Turkey?

If shareholders are physically present in Turkey, the setup process typically takes 20-30 days. For remote setup without physical presence, the process extends to 45-60 days due to additional documentation and verification requirements.

Q3: Are free zone companies exempt from all taxes in Turkey?

Manufacturing companies in free zones enjoy 100% corporate tax exemption on export-related profits. Additionally, there are exemptions from VAT on goods and services within the zone, customs duties on imports, and withholding taxes on payments to non-residents. However, if products are sold to the Turkish domestic market, they become subject to standard customs duties and taxes.

Q4: What is the minimum capital requirement for a free zone company?

The minimum required capital for a Limited Liability Company (LLC) in a Turkish free zone is 50,000 Turkish Lira. This capital can be paid in installments over a two-year period, with up to four separate payments, providing flexibility for new businesses.

Q5: Can free zone companies sell products in the Turkish domestic market?

Yes, free zone companies can sell products to the Turkish domestic market, but these sales are subject to customs clearance procedures, customs duties, and Value Added Tax (VAT). The tax advantages only apply to export activities and transactions within the free zone.

Q6: Which sectors benefit most from Turkish free zones?

Manufacturing, logistics, automotive, electronics, textiles, pharmaceuticals, renewable energy, luxury yacht production, and technology sectors benefit significantly from free zone incentives. The Turkish government particularly encourages high-value export-oriented industries and those involving technology transfer.

Q7: Do free zone companies need to hire Turkish employees?

There is no mandatory requirement to hire Turkish citizens. Free zone companies can hire foreign employees, though work permits and residence permits must be obtained according to Turkish labor regulations. The process for obtaining work permits is generally streamlined for free zone operations.

Reach us for a Free Zone Company Set up in Turkey

At Legalixa Law Firm, we specialize in free zone company formation, Turkish business law, and comprehensive corporate services for foreign investors. Since 1992, we have successfully registered more than 250 companies with foreign shareholders, providing full-service company formation and governance services in multiple languages.

Our experienced legal team handles every aspect of your free zone company setup in Turkey:

• Free zone selection and feasibility analysis
• Document preparation and notarization
• Activity License Application submission
• Trade Registry registration
• Tax registration and banking setup
• Ongoing compliance and corporate governance
• Real estate services for premises acquisition

Contact Legalixa Law Firm today to discuss your free zone company setup requirements, obtain a transparent quotation, and benefit from our three decades of expertise in Turkish company formation and business law. Let us help you establish your export-oriented business in Turkey’s most advantageous economic zones.

Visit our office in Istanbul for a comprehensive consultation on free zone company registration, Turkish corporate law, and international business establishment services.

Please fill out and submit the form below to make an appointment.

Name *

First

Last

Email *

Phone

SubjectSelect ServiceCompany FormationCitizenship by InvestmentCitizenship by Property PurchaseCitizenship by Bank DepositCitizenship by BESCitizenship by MarriageCitizenship by ResidencyWork & Resident Permit

Message *

Send Message