There are four types of special investment zones in Turkey:

1. TECHNOLOGY DEVELOPMENT ZONES - TECHNOPARKS

• Technology Development Zones (TDZs) are areas designed to support R&D activities and attract investments in high technology fields.
• There are 31 TDZs of which 18 are operational, whereas 13 have been approved and are currently under construction. Ankara has six TDZs, Istanbul has three, Kocaeli has three, while other provinces listed in the pop-up table have one each.

Advantages of TDZs:

• Offices ready to rent and infrastructure facilities provided.
• Profits derived from software and R&D activities are exempt from income and corporate taxes until December 31, 2013.
• Deliveries of application software produced exclusively in TDZs are exempt from VAT until December 31, 2013. Examples include software for systems management, data management, business applications, different business sectors, the Internet, mobile phones and military command control.
• Salaries of researchers, along with software and R&D personnel employed in the zone are exempt from all taxes until December 31, 2013.
• A VAT exemption is provided for IT specific sectors during the exemption period for income and corporate taxes.
• Exemption from customs duties as well as fund levies.
• Academic staff is encouraged to establish companies, participate in a recognized company or join its executive boards as well as to conduct research in the zones.


2. ORGANIZED INDUSTRIAL ZONES (OIZs)

Organized Industrial Zones (OIZs) are designed to allow companies providing goods and services to operate within approved boundaries with the necessary infrastructure, technoparks and social facilities.

•The infrastructure provided in the zones includes roads, water, natural gas, electricity, communications, waste treatment and other services.
•There are 258 OIZs in 80 provinces, 134 of which are currently operational, while the remaining 124 OIZs are being constructed throughout Turkey.

Advantages of OIZs in 50 prioritized provinces

Investors operating in the zones located in 50 selected provinces benefit from the following advantages:
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• 100% exemption from income tax for employed workers.
• 100% exemption from the employer's share of social security costs.
• Up to 50% support for electricity costs.
• Exemption from real estate tax, waste water charges, building construction duties and the use-of-building.

3. INDUSTRIAL ZONES

• Industrial zones are designed to provide sites suitable for large scale and technology intensive investments.
• The Council of Ministers approves the industrial zones after evaluation of the investment sites by the Ministry of Industry and Trade.
• Investments made in an industrial zone should be in a high technology sector and have an investment site of a minimum of 1,500 m2.
• Industrial zones benefit from all of the same advantages provided to OIZs.

4. FREE ZONES

• Free zones are special sites considered outside the customs area although they are within the political borders of the country. These zones are designed to increase the number of export-focused investments.
• Legal and administrative regulations in commercial, financial and economic fields that are applicable within the customs area are either not implemented or partially implemented in the free zones.
• There are 20 free zones in Turkey operating close to the EU and Middle Eastern markets adjacent to major Turkish ports on the Mediterranean, Aegean and Black Seas, with easy access to international trade routes.

Advantages of free zones:

• 100% exemption from customs duties and other assorted duties.
• 100% exemption from corporate income tax for manufacturing companies.
• 100% exemption from value added tax (VAT) and special consumption taxes.
• 100% exemption from income tax on employees’ salary (for companies that export at least 85% of the FOB value of the goods they produce in the free zones)
• Goods can remain in free zones for an unlimited period.
• Companies are free to transfer profits from free zones abroad as well as to Turkey without restrictions.

Source: Invest in Turkey