What is a Free Zone? What are its advantages in terms of import/export?

Free Zones, by definition, are general areas located within the political borders of countries but considered outside the customs line in terms of foreign trade, tax, and customs legislation.

Free zones offer broader exemptions and incentives for industrial and commercial activities than the rest of the country, providing numerous advantages for companies engaged in commercial activities such as import and export.

If we start with Türkiye, the Free Zones located within our country's borders are part of the Turkish Customs Territory;

- It is not subject to any customs regime other than free circulation and, in addition, is considered outside our country's customs territories within the scope of customs duties, trade and foreign exchange practices.

- From the perspective of goods in free circulation, they are located here subject to the provisions of the export regime.

Free Zones are trade zones aimed at protecting and promoting commercial activities and attracting foreign direct investment. The primary goal in these zones is the elimination of trade barriers, quotas, taxes, and tariffs.

There are 19 Free Zones within the borders of Türkiye, employing more than 215,000 people, both directly and indirectly. The Free Zone management scheme is as follows:

- Customs Directorate,

- Regional Directorate,

- Operating company

It is in this form.

What Advantages Do Free Zones Offer in Commercial Activities?

According to Free Zone legislation, companies;

- 100% exempt from customs duties and similar taxes.

- Manufacturing companies are 100% exempt from corporate tax.

- There is a 100% exemption from VAT and excise tax.

- No stamp duty is applied to the compiled documents.

- There is a 100% exemption from property tax.

- Certain logistics services provided from Free Zones, entirely to foreign clients, will be 100% exempt from income and corporate taxes.

- There is also an exemption from income tax on employee salaries (for companies that export at least 85% of the FOB value of their products manufactured in free zones).

- Goods can be held in free zones without time restrictions.

- Companies can freely transfer profits earned from free zones domestically or internationally without any restrictions.

- They are exempt from title deed fees in property transactions.

- They are exempt from VAT in construction, project, occupancy, permit and approval processes.

And they have many other advantages.