Introduction

Free Zones (Serbest Bölge in Turkish abbrv.=SB) : Definition and Purpose
Free zones in Turkey are designated economic areas that are legally considered outside the country’s customs territory, despite being physically within national borders. These zones are designed to attract export focused investment and facilitate international trade by offering significant customs and tax incentives. Companies operating in free zones benefit from exemptions on customs duties, corporate income tax, value added tax (VAT) and other levies, and they can transfer profits abroad or within Turkey without restrictions. Free zones support a broad range of activities including manufacturing, warehousing, logistics, and international trade. They are strategically situated near major ports, airports and transportation hubs to optimize access to global markets. Turkey currently has 19 free zones, of which 18 are active, hosting thousands of investors across sectors.

Organized Industrial Zones (Organizse Sanayi Bolgesi in Turkish abbrv=OSB): Definition and Purpose
Organized Industrial Zones (OSBs) are planned industrial areas established to support structured industrial development. They bring industrial enterprises together within a defined geographical area with ready built infrastructure, including roads, utilities (water, electricity, natural gas), communications and waste treatment facilities, and available social services. The main objectives of OSBs are to promote efficient clustering of manufacturing activities, ensure environmentally managed production, reduce operational costs through shared infrastructure, and support orderly industrial expansion in line with regional development plans. Unlike free zones, OSBs are not specifically focused on export activity; firms in OSBs may produce for domestic and international markets without an export requirement. There are 460 OSBs in Turkey across all provinces, with several hundred active and others under construction, hosting tens of thousands of companies and providing employment for millions.

Key Distinctions Between Free Zones and Organized Industrial Zones
Free zones are tailored primarily to enhance Turkey’s international trade competitiveness. They operate under customs territory exemptions, thus facilitating import, processing and re export of goods with minimal fiscal barriers. OSBs focus primarily on industrial production efficiency and clustering, providing foundational infrastructure for manufacturing without specific customs exemptions tied to exports. Both types of zones offer formal legal structures, planned locations and incentives, but their legal frameworks, tax regimes and operational priorities differ: free zones leverage customs and tax exemptions to boost exports, while OSBs emphasize infrastructure and clustering to support broad industrial growth.

List of Special Economic Zones of Turkey

Figures about Free Zones and in Turkey
There are 19 Free Trade Zones across all provinces. There are more than 2000 companies located in Free Trade Zones; out of this over 500 is foreign companies. Trade volume of free trade zones is $27.7 billion–$28.5 billion in the recent years. Exports from these zones were approximately $12 billion–$12.5 billion in 2024, and continued growth has been observed into 2025. Imports into the zones in recent periods have ranged around $7.9 billion–$8.7 billion.

Figures about Organized Industrial Zones (OSBs) in Turkey
Turkey’s network of Organized Industrial Zones has grown significantly in recent years. As of early 2026, the total number of OSBs across the country has reached approximately 416, including zones affiliated with the Ministry of Industry and Technology and those under the Ministry of Agriculture and Forestry. These zones are spread across all 81 provinces, reflecting broad geographic industrial development. OSBs host a large share of Turkey’s industrial base. More than 68,000 factories and businesses operate within these zones, encompassing a wide range of manufacturing and industrial sectors. OSBs are instrumental in Turkey’s industrial production. Data from industry associations indicate that OSBs account for a significant portion of national output, often cited as close to 45 % of the country’s overall industrial production. Among all OSBs 27 zones certified for environmental standards with green certificates.

Incentives of Special Economic Zones

Free Trade Zone (FTZ) Incentives
Companies operating in Turkey’s FTZs benefit from a combination of fiscal, regulatory, and operational incentives designed to encourage exports and foreign investment. Key advantages include:

  • Customs and Tax Exemptions: Goods imported into the zone for processing, assembly, or storage are exempt from customs duties and VAT. Products that are exported after processing enjoy full exemptions from corporate income tax.
  • Profit Repatriation: Companies can freely transfer their profits abroad or within Turkey without restrictions, facilitating international business operations.
  • Simplified Bureaucracy: Licensing, registration, and trade procedures are streamlined, reducing administrative burden for companies.
  • Flexibility in Ownership: 100 % foreign ownership is allowed, which attracts international investors.
  • Sectoral Freedom: FTZs host manufacturing, logistics, R&D, software, and trading operations, allowing diverse business models to take advantage of incentives
  • Operational Efficiency: Companies benefit from easier logistics, proximity to ports and airports, and simplified foreign trade documentation.
  • Investment Encouragement: The zones allow foreign companies to establish fully-owned subsidiaries or joint ventures under favorable conditions.
  • Diverse Business Activities Supported: Manufacturing, logistics, R&D, IT services, and trading are all eligible for incentives, allowing companies to combine multiple value-added operations within one zone.

Incentives for Organized Industrial Zones (OSBs) in Turkey — Fiscal and Investment Support
Investors locating within Organized Industrial Zones benefit from a combination of general and regional investment incentives that complement Turkey’s broader national support programs. Under regional and large scale investment incentive schemes, projects in OSBs often qualify for enhanced support compared with the same project outside these zones. For example, if an investment is made in an OSB in a given region, it can benefit from the rates and terms of the next higher incentive region for tax deduction and employer social security premium support, increasing the attractiveness of factory investment inside OSBs. These incentives include Value Added Tax (VAT) and customs duty exemptions, tax deduction (corporate tax reduction), and government support for employer social security premiums for several years depending on the region and investment scale.

Additional OSB Specific Incentives and Cost Advantages
Beyond the structured national incentive schemes, OSBs provide additional practical and operational incentives that reduce investment and operating costs. Companies within OSBs typically receive VAT exemption on land purchases, exemption from real estate tax for several years after facility completion, and lower utility and service costs (water, natural gas, communications) compared with standard industrial areas. Activities related to parcel division or merger often enjoy tax exemptions, and facilities operating in zones with their own waste water treatment plants can receive exemptions on wastewater fees. These OSB specific benefits, coupled with access to ready infrastructure (roads, utilities, waste management) and state backed investment support, make OSBs financially and operationally competitive environments for manufacturing and industrial firms.