Is it profitable to open a business in Turkey in 2022
It is profitable to open a business in Turkey. The country boasts a fast-growing economy, a convenient geographical location, and a developed banking sector. Companies that are registered in Free Economic Zones (FEZ) are exempt from a number of tax and customs duties.
Free Economic Zones in Turkey
Free Economic Zones of Turkey are intended to attract money into the country, stimulate the development of digital technologies and export-oriented production. Therefore most zones are located near Turkish ports.
Officially, FEZs are considered to be outside the country, so companies registered here are considered foreign. Turkey's legal stipulations, which regulate foreign exchange and export-import operations, are not valid here. There are no requirements for standard, product quality, prices, which are stipulated by Turkish law for other jurisdictions.
Advantages of Turkish FEZ
A company registered in the FEZ has many advantages:
- Businesses are fully exempt from corporate (20%) and income taxes (15-35%);
- No value added tax (VAT);
- Producers' income from the sale of goods manufactured in the FEZ is exempt from income and corporate taxes;
- Transactions and documents related to activities carried out by producers in the zones are exempt from stamp duty;
- Logistics services supplied to third countries are exempt from VAT;
- Companies that export more than 85% of their production are exempt from income tax, which is paid on staff salaries;
- Enterprises can safely transfer the proceeds to any other country;
- Utilities for businesses are free (light, water, gas).
In accordance with the EU-Turkey Customs Union Agreement, Turkish products are in free circulation, and no customs tax is payable. Since FEZs are located outside the customs border, companies registered here can buy goods in Turkey at export prices, without VAT.
Another advantage of registering a company in Turkey 2022 is that goods can be supplied to both the foreign and domestic market of Turkey. In the second case, the products are considered as foreign goods, and the tax rate of 0.5% of the transaction amount applies.
Investment Encouragement Certificate
Turks are interested in investors, so they have developed a whole program of incentives. The Investment Incentive Certificate is given to foreigners who do business in certain areas or regions. The following benefits are possible:
- Exemption from customs duties and VAT, including on foreign machinery and equipment that have received an investment incentive program certificate;
- Reduction of corporate and income taxes;
- Insurance payments;
- Promotion of large and strategic investment projects at the state level.
Other business benefits of Turkey
- Inexpensive skilled labor;
- High purchasing power. Turks like to follow fashion trends and willingly buy new items. Therefore, the main things for a successful business are the right business plan and marketing strategy;
- Loyal manufacturers who are open to even minimal orders;
- Opportunity to obtain citizenship for owners of companies that have made an investment of $500 000 or more, or created more than 50 jobs.
How to register a company in Turkey
To register a company and open a bank account in Turkey, contact IT-OFFSHORE specialists and we will help you.