06 Sep

Free trade zones have been established in Turkey after the entry of the Free Trade Zones Law No. 3218 (FZL) in force in 1985. This article is intended to provide a general information about the legislation concerning the free trade zones in Turkey and their advantages.

Free trade zones are the areas which are exempted from the laws regarding foreign trade regime and which are generally located near an international port or airport. These zones are considered as outside of customs areas and these are principally export-oriented.

The objectives of free zones are to:

  • increase foreign trade volume;
  • facilitate imports and exports,
  • accelerate technology transfers into the country.

In this regard, free zones are established on the purpose of increasing the foreign investments and technology in the country.

Advantages of free trade zones

Free zones provide numerous advantages and facilitations to investors and users, these are stated below:

1. Tax-related advantages for manufacturers

The free zones provide many opportunities regarding tax liability:

  • The revenue of the manufacturers in free trade zones which have been retained through sales of products they produced in free trade zones are exempted from income or corporation tax.
  • Furthermore, the salaries of employees which are employed by users exporting at least 85 % of FOB value of the goods produced in free trade zones are exempted from income tax.
  • Transactions and documents regarding the operations in free trade zones are also exempted from stamp duty and charges.

These advantages are in force until the end of the taxation period in which Turkey becomes full member of the European Union. (temporary Art. 3 of FZL).

2. Possibility of transfer profits

The transfer of revenue from free trade zones to Turkey or abroad is not subject to any permission.

3. Trade facilities

The goods in free trade zones are subject to the export regime. Therefore, the users do not need to pay VAT by purchaise of services and goods from Turkey. However, it is possible that the goods with turkish origin the value of which does not exceed 5.000 USD are not subject to the export regime upon request. (Art. 8 of FZL)

4. Opportunity for medium and long term planning

Free trade zones give the opportunity of medium or long term planning for users. The Law provides the following validity periods of an operating license:

  • for tenant users (15 years);
  • for manufacturer tenant users (20 years);
  • for investor users (30 years);
  • for manufacturer-investor users (45 years).

Building plans and buildings on land of the Treasury can be leased or assigned until 49 years for the investors.

5. Advantages concerning customs duty

The goods in free circulation are exempted from customs duty which are sent to Turkey or to the EU countries from the free zones. Furthermore, the goods of third country origin are also exempted from customs duty.

6. Delivery of free movement documents

Since free zones are considered as part of “Customs Territory of Turkey-EU”, the goods of Turkish or EU origin and the goods in free circulation in Turkey can be sent to the EU with an A.TR certificate. This certificate indicates that the related goods are subject to the Customs Territory and therefore in free circulation.

Moreover, the goods of third country origin can be sent to the EU with an A.TR certificate after the payment of customs duty.

7. Equity Principal

All local and foreign firms may benefit from the facilitations and advantages provided in free zones equally regardless their origin. The tax-exempt facilitations stated by Council of Ministers are also available for operators and users during investment and production stages.

8. Managing trade activities according to market demands and possibility of payment with foreign currency

In free trade zones, any authority concerning prices, quality and standards allowed to public institutions by laws are not valid unless the manufacturers demand.

Furthermore, every payment regarding the transactions in free zones is done with foreign currency.

9. Access to local and international market

There are no restrictions imposed regarding the trade between free zones and third countries and regarding the import/export. Only the sales of the risky goods and consumer goods from free zones into Turkey are subject to restrictions.

10. Minimised bureaucracy

All kinds of bureaucracy in free zones during application process and operation are minimized. Free zones are managed by professional private sector companies.

11. Strategical advantages

Turkish free trade zones are established close to the strategical relevant areas such as EU and Middle East Markets, the major Turkish ports on the Mediterranean, Aegean and Black Sea. Furthermore, free trade zones are located adjacent to international airports and highways, cultural and touristic centers.

12. Infrastructure possibilities

Infrastructure of the Turkish free trade zones is in similar standards with free zones in developed countries.

13. Income tax is not deducted from the salaries of employers in free trade zones

Operation in free zones

According to art. 5 of FZL real persons or legal entities may operate in free trade zones provided that they obtain operating license. The application process for an operation license is regulated in Free Zone Regulation in art. 11 and in related circular. The operation license can be obtained from the Free Zones General Directory (FZGD).

Persons and legal entities with an operating license may operate in all kinds industrial, commercial services which are regarded as appropriate by Higher Planning Council. (Art. 4 FZL)

There are 21 free zones in Turkey. Their major fields of activities are trade, production, offshore banking, banking, rental, insurance and financial leasing.


The advantages and facilitations, especially tax and customs duty advantages in Turkish Free Zone Laws provide the increase of costs of production for firms, and the accelerate of import and export in Turkey. In conclusion, due to all above mentioned advantages, Turkish free trade zones have become an attractive investition area for foreign and domestic investors.

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