- November 18, 2022
- Posted by: admin
- Category: Blog
If you are someone looking for all the information you need for opening a free zone company in Turkey, you have come to the right place. Getting the help you need is the first step to doing so. This article will talk about everything you need to know about forming a company in Turkey.
What is the Free Zone?
It is a specifically designated place that is regarded as outside the customs zone, even while remaining in close proximity to the political borders of a country. Free Zones are considered to stimulate investments, in export-oriented sectors wherein specific administrative as well as legal standards are enforced.
In the year 1987, Turkey established multiple numbers of Free Zones within its perimeters to stimulate the export and import of goods within and outside the country. In these Free Zones, preferential regulatory treatments are given as a way to increase the export and import of goods and services.
As you can very well understand from the above information, Free Zones are great for company formation in Turkey.
Benefits of Forming a Free Zone Company in Turkey
There are lots of benefits a person can enjoy when they choose to form a company within a Free Zone area in the country. Let’s have a look at some of the most important ones below.
- Tax Advantages for Manufacturers
The most crucial aspect of benefits happens to do with tax advantages. Manufacturers can enjoy tax advantages till the time when Turkey becomes a full member of the European Union. In fact, manufacturers who generate sales from goods that are produced in the Free Zones of Turkey are exempt from corporate as well as income taxes.
Other than that, the workers who work in these manufacturing companies will also have tax-free incomes. The documents and transactions that happen related to the activities in the free zones are also exempt from stamp duties and fees of any kind.
It is amazing the kind of tax advantages that are there, especially for manufacturers operating in the free zones of Turkey.
- Transference of Profits
Another amazing thing that a person opening a Free Zone company in Turkey can enjoy is transferring profits to Turkey or to any other part of the globe without the need for any permission from any governing body.
- Easy Access to EU Countries
Another big advantage that such a company owner will enjoy is easy access to the European Union. As any business person who has done their research knows, the EU offers plenty of opportunities for the buying and selling of goods and services with the Euro in full swing there. One can certainly make a lot of profits with access to multiple countries. This makes it easy and extremely lucrative for businesses to do well in this region.
- Work on Market Demand and Conditions
Any government laws and regulations regarding standards, quality, and prices are not valid in the Turkish Free Zone areas at all. The manufacturer can go ahead and work only keeping in mind market demands and conditions, which is amazing, to say the least.
- Easy Selling to Domestic and Foreign Markets
Another thing that is likely driving the number of Free Zone companies in Turkey being formed is the fact that manufacturers will be able to take advantage of the domestic markets as well as any foreign markets they want to capture with their goods and services.
As long as there are no dangerous products involved, it should not be a problem.
- Equal Treatment
Opening a free zone company in Turkey also means getting equal treatment. No matter what geographical region of the world the company or the owners have originated from, they will get equal treatment as far as advantages and incentives are concerned.
Step-by-Step to Opening a Free Zone Company in Turkey
There are basically 3 steps involved, each of which will be discussed below in some detail.
#1: Process of Incorporation
The first thing to do would be to send an application to the General Directorate of Free Zones, Overseas Investment, and Services. This is under the Ministry of Trade. This has to be done to get an operating license to operate as a company within any of the free zones in Turkey and both real persons or a business entity can do it.
The next thing to do would be to set up a corporate business account. This should be as simple as going to a bank and starting a corporate account with the name of the business that is to be established,
- Getting Rental Space
A business cannot operate without its own space. That is where having a leasing or rental arrangement comes in. for this, making arrangements to get a lease or rental space within the Free Zone in Turkey is essential.
- Establishing Company
Next, the company needs to be established. For this, the Chamber Of Commerce needs to be called upon.
#2: Getting an Operating License for Free Zone Company
There are a few documents that will be required to get an operating license to work as a company within the Free Zone area of Turkey. Here’s a comprehensive list:
- Information about the applicant as well as the kind of operation that is being planned.
- Document for authorization as well as specimen signature of the applicant. There should also be a specimen signature of a person who has the Power of Attorney as well as any representative of the company to be established.
- The application fee that was submitted to the Central Bank of Turkey needs to be documented as well. This means the original receipt of it.
- The Turkish Trade Registration Gazette has to announce the registration of the company as well as its current capital composition.
- The statements of income and balance sheets of the last three years.
- Documents to prove the currency that was brought in within Turkey by the applicant in the last there years.
- All customs tariff numbers of the goods belonging to the company that has entered or left Turkey have to be documented as well.
- Showcasing the production flow if the company is in the production sector.
- The Article of Association that is to be incorporated has to be drafted and filed.
- There should be a deposit of $5,000 to the Ministry of Trade as an application fee.
- This is a refundable amount. If the Ministry of Trade rejects the application for any reason, the amount will be refunded back to the applicant.
- If the application gets accepted, the rental or lease agreement has to be signed by a Free Zone operator within 30 days.
#3: Establishment of a Company with the Chamber of Commerce
This is the last step for company registration in Turkey. There are documents and things that need to be done to make sure it goes by seamlessly. Here is the list of documents required:
- Identification documents of the founders of the company that will be established.
- Documentation for the Power of Attorney that the company will have.
- Company managers and their identity cards that have been duly notarized.
- Name of the company
- The founder’s signature is required in the Articles of Incorporation
- Original founder’s declaration for the company.
- It is to be noted that if these documents have been prepared outside of Turkey, then they have to be duly notarized and apostilled.
Getting the Help You Need
If you wish opening a free zone company Turkey, you are certainly not alone. But how do you get there? That is why most businesspersons opt for professional help. Here are the reasons why doing so is a great idea.
- Professionalism: When you hire a consultancy to start such a company, you get professional know-how and help. As you can well see, there are just so many things that need to get done that it may not be possible for you to do on your own. Understandably, you already have business interests elsewhere. So getting a consultancy just makes more sense for reasons of pure professionalism alone.
- Expertise: Beginning with, there are so many documents required to even start the process of applying for the formation of a Free Zone company. You need expertise, and the internet has a lot of information available, but it does not have his expertise. Hiring a consultancy with enough expertise will help you deal with the crucial documentation process. You don’t want to be rejected just because you do not have a particular set of documents.
- Resources: Such a consultancy will also be able to provide you with the resources and tools necessary and just get the ball rolling. On the contrary, if you were to do the whole process yourself, you may have to run from post to post to find the resources required. In other words, get ready-made resources and tools made available.
- Much Quicker: Do you know how hard it can be to open a corporate bank account in a foreign bank? Understandably that is why a consultancy is the right choice. The process of establishing your company is going to be sooner rather than later. It is a case of ‘’been there, done that’’ for a reputed consultancy.
Few Things to Know About Free Zones in Turkey
When you are thinking of starting a company in Free Zone Turkey, it can feel overwhelming, to say the least. The right kind of help can be great though. Here are a few things to know about it before starting out.
- Increasing FDI is the Goal
With the recession hitting in 2010, Foreign Direct Investment went down significantly all over the world. With the view of increasing FDI, Free Zones were created in many places in Turkey to make it an attractive destination for foreign investors. Foreign investments went up again after 2015 and because of it, Turkey still happens to be one of the top destinations of the world where foreign investments are concerned. Specifically, the incentives that were offered by the Turkish government pushed foreign investors to come into the country and start their operations.
- Huge Incentives
Perhaps the greatest incentive that foreign investors got had to do with the no-tax policy within the Free Zone. For example, depending on the kind of business one is planning to start, incentives will be calculated according to that. The company can be in general investments, large investments, or in the agricultural sector.
Starting a business in the Special Economic Zone in Turkey offers a lot of incentives to foreign investors.
- Enjoy Full Ownership
Moreover, it is wonderful news to foreign investors that they have full ownership of the companies they create within the Free Zones of Turkey. There are no two ways about it; when you start a company there, you will be the owner or your partners will be co-owners in their own right.
- Superb for IT Companies
There are lots of businesses that are going to thrive in this particular area. It is certainly an industry that promises to be extremely lucrative no matter the size of the firm. Apart from this, agro-based businesses and hair transplant businesses will do excellently. Of course, if you are already in a particular sector, choosing to start a company in the Free Zone in the same sector is a good idea.
- Encourages Export of Goods and Services
The Ministry of Trade places great emphasis on the export of goods and services. So much so that the profits have been exempted from taxes. So if you can go for a company where there will be export of goods and services, then it can be a veritable choice for Turkey’s Free Zones.
Opening and operating a Free Zone company in Turkey can run up some complications and hence it is a smart move to work through a consultancy with expertise and experience in the area. This way you are much more likely to make a success out of it and not waste either money or time in the process. Take the opportunity of the incentives you get and enjoy doing business in the lucrative land of Turkey.