Solutions
Foreign Investment and Free Zones in Turkey
Tercan Legal advises foreign companies and investors on entering, structuring and operating investments in Turkey, including companies established in Turkish free zones.
Foreign investment in Turkey at a glance
| Legal basis | Foreign Direct Investment Law No. 4875, together with sector-specific legislation |
| Foreign ownership | Up to 100% in most sectors; foreign investors are treated in the same way as Turkish investors |
| Common structures | Limited company (Ltd. Şti.), joint-stock company (A.Ş.), branch, liaison office, joint venture, acquisition of an existing company |
| Free zones | Special areas regulated by the Free Zones Law No. 3218 for trade, storage and manufacturing |
How foreign investment is regulated
The Foreign Direct Investment Law No. 4875 sets out the principle of national treatment: a foreign investor may establish a company, acquire shares or open a branch in Turkey on the same terms as a Turkish investor. As a rule, no prior approval is needed to invest. Profits, dividends, sale proceeds and liquidation proceeds may be transferred abroad through banks.
Certain regulated sectors require a separate licence regardless of the investor’s nationality, for example banking, insurance, energy, broadcasting and civil aviation. Companies with foreign capital also have reporting obligations towards the Ministry of Industry and Technology, and the acquisition of real estate by such companies follows a specific procedure under Article 36 of the Land Registry Law.
Choosing the right structure
The choice between a subsidiary, a branch, a liaison office or a joint venture depends on what the business will actually do in Turkey, who will sign for it, how profits will be taken out and whether local partners are involved. We review these points before any documents are signed.
- Company formation in Turkey: limited and joint-stock companies with foreign shareholders
- Branches and liaison offices of foreign companies
- Joint ventures and shareholders’ agreements
- Acquiring a Turkish company: share purchase and due diligence
Free zones in Turkey
Turkish free zones are areas within Turkey that are treated as outside the customs territory for many purposes. They are regulated by the Free Zones Law No. 3218 and are commonly used for re-export, storage, logistics and manufacturing for foreign markets.
To operate in a free zone, a company must obtain an operating licence through the zone administration. Depending on the activity, free zone users may benefit from customs and tax advantages; the scope of these advantages differs, in particular between manufacturers and trading companies, and should be reviewed for each business model before the company is set up.
Tax, incentives and repatriation of profits
Companies in Turkey are subject to corporate income tax, VAT and withholding taxes on certain payments, including dividends. Turkey has concluded double taxation treaties with many countries, which may reduce withholding tax on dividends, interest and royalties. Investments that meet the relevant criteria may apply for an investment incentive certificate, which can provide exemptions such as VAT and customs duty relief on qualifying machinery.
For an overview, see our Türkiye tax guide for foreign investors and our country guides for Saudi, Chinese and Russian investors.
How we assist
- Review of the investment plan and choice of structure
- Company formation, branch or liaison office registration
- Free zone company formation and operating licence
- Shareholders’ agreements, joint ventures and acquisitions
- Corporate bank account, accounting and ongoing corporate compliance
- Coordination with tax advisers on structuring and incentives
- Import, export and trade contracts
Frequently asked questions
Do I need a Turkish partner to invest in Turkey?
No. In most sectors a foreign individual or company can own 100% of a Turkish company.
Can profits be transferred abroad?
Yes. Under the Foreign Direct Investment Law, profits, dividends and sale proceeds may be transferred abroad freely through banks, subject to applicable taxes.
Can a company with foreign shareholders buy real estate in Turkey?
Yes, for its business activities, subject to the procedure under Article 36 of the Land Registry Law.
Is a free zone company suitable for every business?
No. Free zones suit trade, storage and manufacturing for foreign markets. Businesses selling mainly to the Turkish domestic market usually operate through an ordinary company.
Discuss your investment with our team
Tell us briefly about your plans or your situation. We will review it and explain the appropriate next steps. You can send us a message or request an online consultation.
This page provides general information on Turkish law and does not constitute legal advice. Legislation and administrative practice change frequently; the position should be confirmed for each matter.
