Establishing a company in a Free Zone in Turkey provides a range of advantages for businesses looking to expand into the country. Free Zones are regions within the political borders of the country but outside the customs territory, where commercial and economic regulations are not fully applied. These regions offer a favorable environment for foreign investment, lower production costs, and the opportunity to create new jobs.

Foreign or local real or legal entities can operate in a Free Zone by obtaining an activity license, and there are no restrictions on domestic or foreign capital for legal entities operating in these regions. Individuals can also establish a company in a Free Zone as long as they operate exclusively in the region.

To establish a company in a Free Zone, businesses must first obtain an activity license. This requires filling out the Activity License Application Form, depositing the application fee of USD 5,000 into the Free Zones Special Account at the Central Bank of the Republic of Turkey, and sending the application form and necessary documents to the Free Zone Directorate. Once approved, the articles of association must be prepared according to Circular No. 1998/4, and an application for the establishment of the company must be made to the trade registry. The company can then be established in accordance with Turkish Commercial Code provisions and commence operations in the Free Zone.

Additionally, establishing a company in a Free Zone in Turkey offers businesses many benefits, including a favorable investment environment, lower production costs, and opportunities for transit sales. To take advantage of these benefits, businesses must first obtain an activity license, follow the proper procedures for setting up a company, and ensure that their articles of association comply with the Circular No. 1998/4

To apply for an activity license in a free zone in Turkey, the following documents are required to be attached to the Activity License Application Form:

Information about the applicant:

• A separate page that details the real or legal person making the application and explains the free zone activity
• Authorization certificates and signature circulars of the signatory, and authorization certificates and signature declarations of the company representative (if any)
• If the applicant is a legal entity and an already established company, then Turkish Trade Registry Gazettes and Chamber of Commerce and Industry Registration that show the company’s establishment announcement and latest capital and shareholding structure must be attached.

Articles of Association of the Company:

The articles of association must be prepared in accordance with Circular No. 1998/4 titled “Evaluation of Activity License Applications, Branches, Companies with Branch Addresses”. The company title should reflect the free zone activity, and the article titled “Purpose and Subject” should be written in the context of the free zone. The use of the expression “purchase and sale” instead of “import” and “export” is recommended in the provisions under “Title”, “Purpose and Subject”, and related headings. The company’s fields of activity under “Purpose and Subject” must take into consideration the characteristics of the free zone and exclude goods prohibited from entering the zone. The purchase-sale and production sections of the application form must be compatible. The company’s duration must be at least as long as, or longer than, the activity license. The articles of association must include a section titled “Amendments to the Articles of Association” which states that the company must obtain approval from the Undersecretariat of Foreign Trade (General Directorate of Free Zones) for any changes to the title, purpose and subject, center, duration, etc. before registering these changes in the trade registry.

Additional requirements for a company to be established in the free zone:

1. Balance sheet and profit and loss statements for the last three years
2. Bank receipt showing payment of the Activity License fee to the Central Bank of the Republic of Turkey
3. Document showing the amount of foreign currency brought to Turkey in the last three years by the applicant (if any)
4. Permission certificate from the Banking Supervision and Regulation Agency (BRSA) for banks and financial leasing institutions and from the Undersecretariat of Treasury General Directorate of Insurance for insurance institutions
5. Original and photocopy of the Activity License Application Form

After approval, the company must submit a copy of the workplace contract within 30 days to the General Directorate of Free Zones along with other necessary documents. The company can then be established in accordance with the Turkish Commercial Code and start its activities in the free zone.

Activity licenses are granted for 20 years and can be renewed. If the company changes its address, the new address must be registered with the trade registry and announced in the Turkish Trade Registry Gazette and notified to the Undersecretariat of Foreign Trade (Ministry of Economy & General Directorate of Free Zones).