CLIENT ALERT | Turkey Investment Climate, Tax Residency & Foreign Income Claims

What International Investors Need to Know (2026)

As Regional Tensions Deepen, Türkiye Could Quietly Emerge as a Strategic Economic Winner

New Investment Law Proposal: A Strategic Shift

Türkiye is introducing a powerful incentive package that reshapes the rules of the game for international investors. Recent reporting by Reuters and speeches by President Mr. Erdoğan indicate that Türkiye is preparing a new investment law package designed to enhance its position as a regional investment hub.

The proposal—expected to be submitted to Parliament soon—signals a broader economic policy shift toward export-led growth and foreign capital attraction. Key elements under discussion include:

1. Expanded Corporate Tax Exemption for Transit Trade and Intermediary Activities

The scope of tax incentives for transit trade and intermediary activities in the purchase and sale of goods conducted abroad has been significantly broadened.

• The existing 50% corporate tax reduction has been increased to 100%
• As a result, profits derived from qualifying transit trade and intermediary activities will be fully exempt from corporate income tax
• Importantly, this incentive is now extended beyond the Istanbul Financial Center

In parallel:

• Companies operating outside the Istanbul Financial Center will benefit from a 95% tax exemption on such income

This marks a substantial shift toward positioning Türkiye as a regional hub for global trade intermediation.

2. Incentives for Regional Headquarters and Management Functions

Türkiye is also introducing a reinforced framework to attract regional management centres of multinational groups.

• Companies managing overseas operations from Türkiye will benefit from enhanced corporate tax deductions
• For a period of 20 years:
  • 100% of income generated within the Istanbul Financial Center may be deducted
  • 95% of income generated outside the IFC may be deducted

This structure effectively creates a highly preferential regime for centralising regional headquarters and management functions in Türkiye.

3. Employment Incentives for Qualified Personnel

Subject to certain conditions, the reform package also introduces:

• Wage exemptions for qualified employees working within eligible structures

This is aimed at supporting the attraction and retention of high-skilled international talent.

4. Introduction of a “One-Stop Office” for Investment Processes

A major institutional reform is the establishment of a centralised investment facilitation mechanism (“One-Stop Office”).

Under the coordination of the Presidential Investment and Finance Office, representatives from relevant public institutions will be integrated into a single platform.

The One-Stop Office will consolidate key processes including:

• Company incorporation
• Work and residence permits
• Tax and social security registrations
• Employment agency (İŞKUR) procedures
• Land allocation
• Investment incentives
• Environmental Impact Assessment (EIA) approvals

This represents a move toward a fully centralised, digitally supported and investor-focused approval ecosystem.

Our Perspective

These measures collectively signal a strategic policy direction aimed at:

• Positioning Türkiye as a regional headquarters hub
• Increasing competitiveness in global trade intermediation
• Streamlining foreign direct investment entry and execution
• Strengthening the role of the Istanbul Financial Center as a core financial and operational platform

We expect these developments to be particularly relevant for:

• Multinational groups with regional structures
• Trading and commodity intermediation platforms
• Shared services and principal company models
• Large-scale infrastructure and industrial investors

We will continue to monitor implementing legislation and administrative guidance as it becomes available. While the proposal is not yet law, it reflects a clear strategic direction that international investors should closely monitor.

Smart Move: Plan Before You Move

Before relocating or investing in Turkey, clients should obtain a coordinated review covering:

✔ Tax residency analysis
✔ Asset protection review
✔ Immigration and residence options
✔ Company structuring
✔ Family succession planning
✔ Cross-border compliance strategy

Why Invest in Türkiye?

Turkey remains highly attractive due to:

• strategic location between Europe, the GCC and Asia
• dynamic real estate and business environment
• strong lifestyle value proposition
• citizenship and residence opportunities
• growing role as a regional production and export base

With the proposed investment law, Turkey may further strengthen its position as a competitive and tax-efficient jurisdiction for certain investor profiles.

How Tercan Legal Can Assist

Tercan Legal Law Firm supports foreign individuals and investors with:

• foreign investment advisory
• company formation in Turkey
• residency and citizenship pathways
• tax-sensitive legal structuring (with partner advisors)
• contracts and commercial law
• dispute prevention and risk management

Tercan Legal – International Law Firm

Istanbul-based legal advisory for foreign investors, cross-border individuals, entrepreneurs and companies.