There are four different special investment zones in Türkiye:
1. Technology Development Zones - Technoparks
Technology Development Zones (TDZ) are areas designed to foster research and development (R&D) initiatives and attract investments into high-technology sectors. Presently, there are 101 TDZs, with 87 fully operational and an additional 14 that have received approval and are currently under construction.
- Profits derived from software development, R&D, and design activities are exempt from income and corporate taxes until December 31, 2028.
- Sales of application software produced exclusively in TDZs are exempt from VAT until December 31, 2028. 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, 2028. The number of support personnel covered by the exemption may not exceed 10 percent 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 percent of the employer’s share of the social security premium will be paid by the government until December 31, 2028.
- Customs duty exemption for imported products and stamp duty exemption for applicable documents 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 within an investor-friendly environment 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 392 OIZs in 81 provinces, 274 of which are currently operational, while the remaining 118 OIZs are being constructed throughout Türkiye. In addition, more than 67,000 companies produce in over 32,000 parcels while more than 2 million people are employed through the OIZs.
In addition to the investment incentives scheme in Türkiye (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:
- No VAT for land acquisitions.
- 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 (FZ) are special sites deemed outside the customs area, although they are physically located within the political borders of the country. FZs are designed to boost the number of export-focused investments. Legal and administrative regulations in the commercial, financial, and economic domains that are applicable within the customs area are either not implemented or partially implemented in FZs.
There are a total of 19 Free Zones in Türkiye located close to the EU and Middle Eastern markets, 18 of which are active and 1 is at the stage of establishment. FZs are strategically located at points that grant easy access to international trade routes via ports on the Mediterranean, Aegean Sea, and the Black Sea.
- 100 percent exemption from customs duties and other assorted duties.
- 100 percent exemption from corporate income tax for manufacturing companies.
- 100 percent exemption from value-added tax (VAT) and special consumption tax.
- 100 percent exemption from stamp duty for applicable documents.
- 100 percent exemption from the real estate tax.
- 100 percent income and corporate tax exemption for certain logistics services to be offered at the FZs, provided that they are export-oriented.
- 100 percent exemption from income tax on employees’ wages (for companies that export at least 85 percent of the FOB value of the goods they produce in the FZs.
- Goods may remain in FZs for an unlimited period.
- Companies are free to transfer profits from FZs to abroad as well as to Türkiye, 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.
4. Industrial Zones
Industrial zones (IZs) are specialized areas to enhance the global competitiveness of the national economy, facilitate technology transfer, boost production and employment, accelerate international capital inflow, and create industrial areas suitable for large-scale investments, particularly in terms of production costs. IZs, fostering an optimal investment environment for large-scale and integrated investments, have grown increasingly attractive due to the streamlined bureaucratic processes available to investors and regional administrations. Presently, there are 40 IZs across several regions.
- Entitlement to easement rights.
- Elegibility for public investment funding from the Ministry of Industry and Technology (MoIT) budget.
- MoIT or operator company acts as the authoritative body for applications.
- Accelerating and simplifing the bureaucratic processes for investors.
- Cultivating an investment-conduicive environment for advanced technology.
- Easement rights can be granted at significantly lower rates, 8-10 times more discounted, compared to those offered for Treasury lands outside the IZ.
- The President may approve additional incentives.
