Free Zone
What Is a Free Zone?
What Is a Free Zone?
Definition of a Free Zone
A free zone is a special economic area created to encourage investment, production, exports and international trade. Although these zones lie within the political borders of the country, they are deemed to be outside the customs territory, allowing trade to be conducted more quickly, flexibly and competitively.
Companies operating in free zones can benefit from a range of privileges such as tax advantages, customs facilities, reduced bureaucracy and investment incentives. This structure offers significant opportunities in particular for export-oriented manufacturers, sectors that attract foreign investment and those creating high added value.
Key Characteristics of Free Zones
Free zones are economic areas with special regulations for investors and exporting companies.
Their main characteristics are as follows:
They lie within the political borders of the country but are deemed to be outside the customs territory.
They offer more flexible practices in commercial and economic activities.
They provide tax and customs advantages.
They encourage export-oriented production.
They facilitate international trade and logistics activities.
They support direct foreign investment.
They encourage advanced technology and value-added production investments.
They provide modern infrastructure for production, storage, logistics and trade activities.
Free Zones in Turkiye
The 19 free zones operating in Turkiye make an important contribution to the national economy in terms of production, exports, technology transfer and employment.
In the free zones;
approximately 65,000 people are employed directly,
and more than 150,000 people indirectly.
The management structure of free zones generally consists of the following three main bodies:
The Customs Directorate
The Free Zone Directorate
The Founder and Operator Company
Thanks to this structure, commercial activities in the zone are carried out effectively, safely and quickly.
Advantages Provided by Free Zones
Companies operating in free zones can benefit from many financial and operational advantages that support their investment and trade processes.
Tax Advantages
The main tax incentives provided in free zones are as follows:
Exemption from customs duty and charges having equivalent effect
Value Added Tax (VAT) exemption
Special Consumption Tax (SCT) exemption
Stamp duty exemption
Property tax exemption
Corporate tax exemption for manufacturing companies meeting certain conditions
Income tax exemption on employee wages, subject to export performance
These incentives apply provided that the conditions set out in the relevant legislation are met.
Trade and Logistics Advantages
Free zones offer significant operational conveniences to companies engaged in international trade.
The main advantages are:
Goods may be stored without any time limit
Transit trade opportunities
Re-export operations
Operational convenience in import and export processes
Fast customs procedures
Easy integration into the international supply chain
Thanks to these advantages, businesses can plan their stock management more efficiently and reach global markets faster.
Financial and Investment Advantages
Investors operating in free zones can also benefit from significant flexibility in capital movements.
The most notable advantages are:
Earnings obtained in the free zone may be transferred freely to Turkiye or abroad within the framework of the relevant legislation
Certain fee advantages in real estate transactions
VAT exemptions in construction, project and investment processes within the scope of the relevant legislation
Reduced investment costs thanks to ready-built infrastructure
Why Choose a Free Zone?
Free zones offer strategic advantages for companies that manufacture, export and wish to compete in international markets.
In particular;
Exporting companies
Production facilities
Software and IT companies
R&D centres
Advanced technology investments
Logistics and distribution centres
Businesses engaged in international trade
can gain a cost advantage by making use of the incentives provided by free zones and compete more strongly in global markets.
Investing in the Future with the Istanbul Specialized Free Zone
The Istanbul Specialized Free Zone (ISBI) combines the incentives offered by free zones with an ecosystem focused on advanced technology, software, IT, R&D and high value-added production, offering investors modern infrastructure, a strategic location and comprehensive support services.
ISBI is one of Turkiye's leading specialized free zones, supporting the growth of technology-focused investments, facilitating international trade and encouraging sustainable production.
Why ISBI
Why the Istanbul Specialized Free Zone (ISBI)?
A Strong Ecosystem for Technology and Export Oriented Investments
The Istanbul Specialized Free Zone (ISBI) offers domestic and international investors operating in advanced technology, software, IT, R&D and high value-added production a distinctive investment environment that combines the financial advantages of free zone status with modern infrastructure and comprehensive support services.
With its strategic location, strong logistics connections and investor-friendly structure, ISBI aims to strengthen companies' competitiveness in international markets.
Principal Incentives and Advantages Offered by ISBI
Companies operating at ISBI that meet the conditions of the relevant legislation can benefit from the following incentives and advantages:
Income or corporate tax advantages (within the scope of the relevant legislation)
Employee income tax exemption (in line with the conditions set out in the legislation)
Value Added Tax (VAT) exemption
Stamp duty exemption
Customs duty exemption
Operating licence terms of up to 20 years
Ready-built infrastructure and low operational cost advantage
A supportive investment environment for exports and foreign-currency-earning activities
These advantages reduce investors' operational costs while helping them manage their production, export and technology development processes more efficiently.
Additional Support for Technology and Foreign-Currency-Earning Services
Companies operating in advanced technology, R&D, software, IT and other foreign-currency-earning service sectors can benefit from additional incentives for specified periods within the scope of the relevant support programmes.
Qualified Personnel Support
For businesses meeting the eligibility conditions;
Up to 10 qualified employees may be included in the scheme.
50% of an employee's monthly gross salary may be supported.
The annual support amount per employee may be up to USD 15,000.
The support period is planned as 5 years.
This support aims to make it easier for technology-focused companies to access qualified human resources.
Office and Workplace Rent Support
Support towards workplace rental costs is also offered to companies operating in designated sectors.
Within the scope of this support;
50% of workplace rental expenditure may be supported.
The annual support amount may reach up to USD 75,000.
The support period is applied as 5 years.
This incentive provides a significant cost advantage, particularly for technology companies and start-ups in their growth phase.
Main Reasons to Choose ISBI
The Istanbul Specialized Free Zone is not merely a free zone offering tax advantages; it is a comprehensive technology and innovation ecosystem that supports investors' long-term growth.
ISBI's most notable advantages:
A structure focused on advanced technology and high value-added production
An ecosystem suited to software, IT and R&D investments
Free zone advantages that support international trade
Strong logistics and transport infrastructure
Modern office, production and storage areas
Entrepreneurship, mentoring and investor support
University-industry collaboration opportunities
Qualified workforce development programmes
A competitive investment environment for domestic and international investors
ISBI is one of the leading specialized free zones supporting technology-focused companies as they expand from Turkiye into global markets, contributing to sustainable growth and offering an international competitive advantage.
Note: Tax exemptions and support programmes are applied within the framework of the free zone legislation in force and the conditions determined by the relevant public authorities. Please contact the ISBI expert team for current incentive conditions.
Legislation and Laws
The Institution ISBI Is Affiliated With
Which Institution Is the Istanbul Specialized Free Zone Affiliated With?
Like all free zones in Turkiye, the Istanbul Specialized Free Zone (ISBI) operates under the coordination of the Directorate General of Free Zones of the Republic of Turkiye Ministry of Trade.
The establishment and operation of free zones, operating licences, investment processes and practices are carried out within the framework of Free Zones Law No. 3218, the related regulations, circulars and other legislative provisions. This structure provides investors with a transparent and reliable operating environment that meets international standards.
Free Zone Legislation
The principal legislation in force for investors and businesses planning to operate in free zones is as follows:
Free Zones Law No. 3218
Free Zones Implementation Regulation
Circulars of the Directorate General of Free Zones
Operating Licence Application Principles
Support and incentive regulations concerning specialized free zones
How Can You Access the Official Legislation?
You can access the current laws, regulations, circulars and application documents relating to free zones on the official legislation page published by the Republic of Turkiye Ministry of Trade.
Free Zone Legislation:
Republic of Turkiye Ministry of Trade - Free Zone Legislation
On this page you can access official documents such as;
The current Free Zones Law
The Implementation Regulation
Circulars
Operating Licence Application Forms
Support regulations for specialized free zones
Incentives and Advantages
Who Can Operate in the Istanbul Specialized Free Zone?
A Specialized Free Zone for Technology and Export Oriented Companies
By Presidential Decision dated 20 February 2020, the Istanbul Specialized Free Zone (ISBI) was granted specialized free zone status for companies operating in software, information technologies, medium-high technology, advanced technology manufacturing and foreign-currency-earning service activities.
In the assessment of companies wishing to operate at ISBI, the export performance and activity criteria set out in the relevant legislation are taken into account.
Does Your Company Meet the Export Criterion for the Last 3 Years?
The term of the operating licence and the conditions for benefiting from additional support are assessed according to your company's export performance over the last three years.
1. Companies That Meet the Export Criterion
Companies whose export performance over the last three years meets the threshold set out in the relevant legislation may be entitled to a long-term operating licence and to additional support programmes.
Principal Advantages Offered
A 20-year operating licence
Corporate tax advantage (within the scope of the relevant legislation)
Employee income tax exemption (in line with the conditions set out in the legislation)
VAT and stamp duty exemption
Customs duty exemption
Additional Support Programmes
Companies meeting the specified criteria can also benefit from additional support mechanisms.
Rent Support
Support of up to 50% of workplace rental expenditure
Up to USD 75,000 per year
For a period of 5 years
Provided that the relevant export performance conditions are met
Qualified Personnel Support
Up to 10 qualified employees
Support towards employee salaries
Up to USD 150,000 per year
For a period of 5 years
Provided that the relevant export performance conditions are met
Companies That Do Not Yet Meet the Export Criterion
Companies that do not yet meet the specified export threshold can also operate in the Istanbul Specialized Free Zone and benefit from free zone incentives.
Advantages Offered at the Initial Stage
A 3-year operating licence
Corporate tax advantage (within the scope of the relevant legislation)
Employee income tax exemption
VAT and stamp duty exemption
Customs duty exemption
Licence and Support Opportunities Based on Performance
Companies that bring their export performance up to the relevant criteria during the first 3-year operating period may;
apply to the rent support programme.
benefit from qualified personnel salary support.
Who Is It Suitable For?
ISBI has been designed in particular for companies operating in the following fields:
Software companies
IT and technology firms
Artificial intelligence and digital technology start-ups
R&D centres
Electronics and advanced technology manufacturers
Defence and aviation technologies
Medical technology companies
Businesses providing foreign-currency-earning services
With its tax advantages, long-term operating opportunities and technology-focused support programmes, the Istanbul Specialized Free Zone is one of the leading specialized free zones strengthening Turkiye's high value-added production and export ecosystem.
Important note: Operating licence terms, tax exemptions and support programmes are applied within the framework of the Free Zones legislation in force and the conditions determined by the Republic of Turkiye Ministry of Trade. It is recommended that current criteria be assessed with ISBI experts before applying.