Free Trade Zones (FTZs) play a key role in Türkiye’s export-oriented growth strategy. Established under the Free Zones Law No. 3218, these special economic areas are designed to attract foreign investment, facilitate international trade, and promote technology transfer — all while providing businesses with significant tax and customs advantages.
A Brief Background
Türkiye’s Free Zones Law entered into force in 1985, with the first zones — Mersin and Antalya — beginning operations in 1988.
Today, there are 19 active Free Trade Zones operating under the supervision of the Ministry of Trade. Each zone may differ in ownership and management structure: some are government-built and privately operated, while others are fully private sector investments.
Key Purpose of Free Trade Zones
FTZs were created to:
Support export-oriented production and investment
Enable easy access to raw materials and intermediate goods
Encourage foreign capital and technology inflow
Generate employment and enhance Türkiye’s international competitiveness
How to Obtain an Operating Licence
Both Turkish and foreign individuals or companies can operate in FTZs after obtaining an Operating Licence from the General Directorate of Free Zones, Overseas Investment and Services.
The process includes:
Submitting an official application form and supporting documents
Paying the required licence fee to the Central Bank of Türkiye
Signing a lease or purchase agreement within 30 days after approval
Registering with the local FTZ directorate before commencing operations
Tax Exemptions and Incentives
Under the Free Zones Law and its amendments, FTZs are considered outside Türkiye’s customs territory — meaning that most taxes, levies, and duties do not apply within these areas.
Key incentives include:
Income and Corporate Tax Exemptions:
Companies engaged in production activities within FTZs are exempt from income and corporate taxes on profits derived from these activities until Türkiye becomes a full member of the EU.VAT Exemption:
Deliveries of goods and services within FTZs are not subject to Value Added Tax.Customs and Foreign Exchange Freedom:
Movements of goods and capital into and out of FTZs are free from customs and foreign exchange restrictions.
Post-2004 Amendments
The Law No. 5084 (2004 Amendment) revised the scope of tax exemptions to align with fiscal transparency and EU standards.
While older licences (issued before February 6, 2004) retain their original privileges, new licences are subject to time-limited and activity-specific exemptions — mainly focusing on production-based operations.
Accounting and Compliance
The Ministry of Treasury and Finance regulates accounting standards in FTZs independently from the general Tax Procedure Law.
Companies must also comply with labour, social security, and incentive-related obligations applicable in Türkiye.
Conclusion
Free Trade Zones continue to be one of Türkiye’s strongest tools for attracting international investment and promoting export-driven industrialization.
Despite recent reforms narrowing indefinite exemptions, FTZs still offer a highly competitive environment with significant tax relief, operational flexibility, and access to global markets.