Investment Zones

Investor's Guide

There are three types of investment zones in Turkey:

1. Technology Development Zones - Technoparks

Technology Development Zones (TDZ*) are areas designed to support R-D activities and attract investments in high-technology fields.

There are 69 TDZs, of which 56 are operational and 13 have been approved and are currently under construction.

Advantages of TDZs

Profits derived from software development, R-D, and design activities are exempt from income and corporate taxes until December 31, 2023.
Sales of application software produced exclusively in TDZs are exempt from VAT until December 31, 2023.
Examples include software for system management, data management, business applications, different business domains, the internet, mobile phones and military command and control systems.
Remuneration for R-D, design and support personnel employed in the zone is exempt from all taxes until December 31, 2023. The number of support personnel covered by the exemption may not exceed 10% of the total number of those involved in R-D, though.
Investments for the production of technological products developed based on the outcome of R-D projects conducted in the TDZ may be made in the TDZ if deemed suitable by the operator company and allowed by the Ministry of Industry and Technology.
50% of the employer’s share of the social security premium will be paid by the government until December 31, 2023.
Imported products are exempt from customs and applicable documents are exempt from stamp duty within the scope of R-D, design, and software development projects.

2. Organized Industrial Zones

Organized Industrial Zones (OIZ*) are designed to allow companies to operate with ready-to-use infrastructure and social facilities. The existing infrastructure provided in OIZs includes roads, water, natural gas, electricity, communications, waste treatment and other services.

There are 322 OIZs in 80 provinces, 255 of which are currently operational, while the remaining 67 OIZs are being constructed throughout Turkey.

Advantages of OIZs

In addition to the investment incentives scheme in Turkey (general investment incentives, regional investment incentives, large-scale investment incentives, strategic investment incentives, employment incentives, R-D support, etc.), investors operating in the OIZs may benefit from the following advantages:

Exemption from real estate duty for five years starting from the date of completion of the plant construction.
Low water, natural gas, and telecommunication costs.
No tax is payable in cases of merging and/or separation of plots.
Exemption from municipality tax for the construction and usage of the plant.
Exemption from the municipality tax on solid waste if the OIZ does not avail of the municipality service.

3. Free Zones

Free zones are special sites deemed outside the customs area, although they are physically located within the political borders of the country. These zones are designed to boost the number of export-focused investments. The legal and administrative regulations in the commercial, financial and economic areas of the customs territory are not implemented or partially implemented in the free zones.

In Turkey, there are totally 19 Free Zones situated close to the EU and the Middle East markets and 18 of them are active while one is under construction. Free Zones are strategically located at points that grant easy access to international trade routes via ports on the Mediterranean, Aegean Sea, and the Black Sea.

Advantages of Free Zones

100% exemption from customs duties and other assorted duties.
100% exemption from corporate income tax for manufacturing companies.
100% exemption from VAT and special consumption tax.
100% exemption from stamp duty for applicable documents.
100% exemption from the real estate tax.
100% income and corporate tax exemption for certain logistics services to be offered at the Free Zones, provided that they are export-oriented.
100% exemption from income tax on employees’ wages (for companies that export at least 85% of the FOB value of the goods they produce in the Free Zones).
Goods may remain in free zones for an unlimited period.
Companies are free to transfer profits from free zones to abroad as well as to Turkey, without restrictions.
Exemption from title deed fees when acquiring and selling a property.
VAT exemption during construction, design, settlement, and approval processes.
Ready infrastructure exempt from VAT and other taxes.
Import permit for second-hand/used machinery.