Specialized Free Zones

11 January 2021

BRIEF ON THE PROJECTION OF
SPECIALIZED FREE ZONES IN TURKEY


Free Zones Law No. 3218, which was enacted in 1985 and has been in force until today was designed to regulate trade in goods via free zones without any exclusive emphasis on service sectors or any type of specialization or clustering.

In order to establish technology transformation in accordance with the targets foreseen in Turkey’s development plans and annual programs and to establish free zones specializing in goods and service sectors that objectivize R & D intensive, high technology and high added value activities, amendments are being planned in current free zone policies.

In this context, a draft regulation has been prepared by the Ministry of Trade in order to reflect the advantages applied for current users in free zones to the technology intensive, high value added goods and service sectors which will take place in specialized free zones. According to the President Decree Nr. 2635, exclusive advantages that address specific needs of mentioned sectors are introduced.
  
Within the scope of abovementioned Presidential Decree Nr. 2635;

  • The exemptions that are provided to currently operating companies located in free zones such as corporate tax, real estate tax, value added tax exemptions and other duties and stamp privileges is to be reflected to companies which operate in determined sectors in specialized free zones,
  • Currently the wages of the workers employed by the taxpayers that export at least 85 percent of the FOB value of the goods they produce in the free zones are exempted from income tax. Exemption from income taxes on employee salaries is to be reflected to determined sectors as well.
  • R & D intensive, high-tech or high value-added production of goods and services companies within the sector that are established in designated specialized free zones will also benefit rent incentives for their business premises and employment incentives for their qualified personnel via a President Decree that is going to be issued for such activities that occur in the specialized free zones.
  • For the Free Zone Founder and Operator Companies has interest rate incentives for their investments