Companies exporting 85% of their production from Turkish Free Zones enjoy 100% corporate and income tax exemptions in 2026.
Türkiye’s 19 active Free Zones represent the “gold standard” for global exporters looking to serve the European, Middle Eastern, and North African (MENA) markets. Located in strategic maritime and industrial hubs—including Istanbul, Izmir, Kocaeli, and Mersin—these zones offer a unique, “extraterritorial” status that exempts businesses from the standard fiscal and bureaucratic burdens found in the domestic market. In 2026, as global trade faces new tariff challenges, these zones have become indispensable enclaves for “production-for-export” models.
The most powerful incentive within the Free Zone framework is the 100% Corporate and Income Tax Exemption. This is available to manufacturing companies that export at least 85% of the FOB value of the goods they produce within the zone. Furthermore, the wages of the employees working in these export-focused firms are also 100% exempt from income tax, allowing companies to offer highly competitive net salaries while maintaining lower gross costs. This fiscal package effectively makes Türkiye one of the most cost-competitive manufacturing bases for global trade in the world.
In addition to direct tax exemptions, Free Zones provide a “frictionless” logistical environment. Goods entering the zones from abroad are 100% exempt from VAT and Customs Duties, and the same applies to the purchase of new machinery and equipment. There are no time limits for storing goods within the zones, and companies are free to transfer their profits abroad—or to Türkiye—without any restrictions or withholding taxes. This makes Free Zones the ideal location for multinationals to set up regional distribution and assembly centers.
For sourcing professionals and supply chain managers, Free Zone-based suppliers offer a distinct price advantage. Because these manufacturers operate without VAT or corporate tax burdens, their “factory-gate” prices are often significantly lower than their competitors outside the zones. As Türkiye expands its Free Zone capacity to include “Specialized Free Zones” focused on high-tech and software exports, these areas are becoming the primary catalyst for Türkiye’s goal of reaching $390 billion in total exports by 2026.
Citations & Sources:
- Official Guide: Invest in Türkiye – Investment Zones and Free Zones
- Sector Insights: DESBAŞ – Why Free Zone? İstanbul Industry and Trade Free Zone
- Trade Goals: TİM – 2025-2026 Export Action Plan
