Turkey is rolling out a new generation of tax incentives designed to attract global capital, accelerate exports, and position Istanbul as a leading financial hub. Announced by Recep Tayyip Erdoğan in Istanbul, this reform package forms part of a broader strategy to make the country a top destination for investors and multinational companies.
Below is a clear, structured overview of what’s changing—and how businesses can benefit.
1) Policy Direction: Making Turkey a Global Investment Magnet
The reform agenda focuses on four priorities:
- Boosting foreign direct investment (FDI)
- Strengthening export competitiveness
- Attracting regional headquarters and high-value activities
- Elevating Istanbul as a global finance center
A comprehensive legislative package is expected to be submitted to Parliament, potentially expanding these incentives further.
2) Key Measures at a Glance
- Up to 20 years of tax exemption on foreign-sourced income for qualifying individuals
- 0% corporate tax on certain transit trade profits within the financial center
- Reduced corporate tax rates for exporters (9% / 14%)
- 100% tax exemption for eligible service exports
- Asset repatriation scheme with low rates (2–3%) and no audit on declared assets
- Incentives for multinationals relocating regional functions to Turkey
3) 20-Year Exemption on Foreign Income
Individuals who relocate to Turkey and have not been tax residents in the past three years can benefit from:
- Full exemption on foreign-sourced income for up to 20 years
- Taxation limited to income generated within Turkey
- Reduced inheritance/transfer tax (around 1%) for this group
Who benefits? Executives, entrepreneurs, investors, and mobile professionals seeking long-term tax efficiency.
4) Istanbul Financial Center: Expanded Advantages
The Istanbul Financial Center is central to the reform.
Enhanced benefits include:
- Transit trade incentives increased from 50% to 100%, resulting in 0% corporate tax on qualifying profits
- No corporate tax on certain intermediary trading activities conducted abroad via the center
- Additional advantages for companies holding participation certificates
Outside the center: companies engaged in transit trade may deduct up to 95% of related profits from their tax base.
5) Corporate Tax Cuts for Exporters
To support export-led growth:
- 9% corporate tax for manufacturing exporters
- 14% corporate tax for general exporters
These rates significantly undercut prior levels, improving Turkey’s competitiveness in global markets.
6) Full Exemption for Service Exports
Companies delivering services from Turkey to non-resident clients—such as:
- software and IT services
- engineering and consulting
- architecture and design
now benefit from 100% tax exemption on qualifying revenues.
Result: Turkey becomes a highly attractive base for digital and knowledge-driven businesses.
7) Asset Repatriation (Wealth Amnesty)
A new framework enables the transfer of foreign-held assets into Turkey:
- Low tax rates (2–3%)
- No tax audit or penalties on declared assets
This measure aims to increase liquidity and encourage capital inflows.
8) Incentives for Multinationals
Global companies relocating regional management or operational centers to Turkey may access:
- Full deduction of foreign-sourced income
- Up to 95% deductions on other revenues
- Long-term advantages (up to 20 years)
These policies are designed to position Istanbul as a credible alternative to major financial hubs.
9) What This Means for Your Market Entry
The opportunity is substantial—but execution matters. To benefit from these incentives, companies must:
- Choose the right market entry structure (entity vs. flexible solutions)
- Ensure full compliance with labor, tax, and reporting requirements
- Set up payroll and HR processes aligned with Turkish regulations
- Properly register and document qualifying activities
Missteps in setup can delay or limit access to incentives.
10) Practical Setup: Faster, Safer Expansion
Many international companies accelerate their entry by using flexible employment and compliance models that avoid immediate entity creation while ensuring local compliance. This approach can:
- Speed up hiring in Turkey
- Reduce administrative burden
- Maintain full legal compliance
- Enable quick scaling as operations grow
11) Why Work with a Local Expert
Navigating incentives, payroll, and compliance requires local expertise. Partnering with a specialist ensures:
- Accurate interpretation of tax benefits
- Proper documentation and registrations
- Seamless HR, payroll, and compliance management
- Reduced legal and operational risk
12) Get Started with Confidence
To fully leverage Turkey’s 2026 tax incentives and structure your expansion effectively, connect with Azkan Group, an expert in umbrella company services and recruitment since 2005.
They support international businesses with:
- Market entry strategy
- Hiring and workforce management
- Payroll and compliance
- Operational setup in Turkey
👉 Contact Azkan Group today to unlock these incentives and expand into Turkey with confidence.