What is a Free Trade Zone?
Free trade zones are special sites that, although located within the political borders of a country, are legally considered to be outside of its customs area. Goods that enter the borders of a free trade zone in a given country are outside of this country’s customs borders and are not subject to its financial and economic regulations.
Briefly put, free trade zones are designed to offer a business climate that makes commercial and industrial activities easier to conduct than in other parts of the country.
FTZs in Turkey
There currently are 20 FTZs in Turkey (19 of which are operational). These are situated close to the EU and Middle Eastern markets, major Turkish ports on along the Mediterranean, Aegean, and Black Seas and the offer easy access to major international trade routes.
Please click here for an interactive map with links to each Turkish FTZ’s website (you will need to select “FZs” on the “Key Locations/Sites & Facilities” menu on the right hand side of the map).
Advantages & incentives offerd by FTZs in Turkey
- Exemption from corporate income tax: Manufacturing companies are 100% exempt from corporate tax over their profits (the regular corporate tax rate in Turkey is 20%),
- Free transfer of profits: profits generated at free zone can be transferred to Turkey or to other countries without the need for any permission,
- Income tax exemption over salaries: Manufacturing companies are 100% exempt from income tax over the salaries of their employees if they sell minimum 85% of their production abroad (the regular income tax rate over salaries in Turkey is between 15% to 35%).
Customs-related exemptions & benefits
- Since free zones are legally outside the customs borders of Turkey, custom related taxes and regulations are not applicable to goods entering the zones (Value-Added Tax (VAT), customs duties, Resource Utilization Support Fund tax (RUSF, normally 6%),
- Companies can decrease their costs by keeping their stocks in a tax-free environment and/or basing their re-exports, transit trade, packaging, labeling and other similar operations within free trade zones.
One Stop Service
- 2nd hand machinery can be imported freely in to FTZs with no age limitation,
- Free circulation of goods within the EU Market,
- Lower construction and infrastructure service costs (exempt from VAT),
- 100% foreign investment is allowed, without any requirement for minimum capital,
- Bookkeeping and accounting can be done in foreign currency,
- Sales to domestic market is allowed,
- Easy to get work permits for expatriate employees,
- Stocks can be kept in FTZsduty-free for an unlimited period of time.
An example: The European Free Zone
BCCT member European Free Zone Founder and Operator Co. (EFZ) / Avrupa Serbest Bölgesi (ASB) is a Free Trade Zone that includes a multi-sectoral industrial site and finds appropriate solutions for the requirements of all its investors. Established in 1999, it is located in the Çorlu district of Tekirdağ on an area covering 2 million m2 of land (click here for map).
More than 150 companies from all over the world – such as 3M, Foxconn, Polyplex Resisns, Indorama, Bekaert Textile, Flamaerotec and MTU Motor have invested into the European Free Zone, where 4,000 people are currently employed.
In 2015 the trade volume generated in EFZ was 2.5 billion USD, making it 4th among the existing 19 free zones in Turkey.
Lands with ready infrastructure, warehouses, production units, offices and open stock areas are ready for the companies who want to start their activities for benefiting the advantages and incentives at below.
For further information and examples please visit the BCCT website here