Free Zones Law (Law No. 3218)

Purpose

This is the main legal framework governing all Free Zones in Turkey. It sets the rules for company formation, tax exemptions, trade policies, and operational compliance.

Key Legal Provisions

  1. Objectives & Authority (Article 1-2):
    • The law aims to increase exports, attract foreign investment, and encourage production.
    • The President of Turkey has the authority to establish and regulate Free Zones.
    Business Activities Allowed (Article 4):
    • All industrial, commercial, and service activities are permitted.
    • Public regulations on pricing, quality control, and standards do not apply (except for producers).
    Investment & Land Usage (Article 5):
    • Free Zone land can be leased for 49 years to investors.
    • Construction permits and licenses are issued by Free Zone authorities (not municipalities).
    • Companies can lease land or build their own facilities.
    Tax Exemptions & Incentives (Article 6):
    • Customs & VAT Exemption:
      • Goods can enter and exit freely without import duties.
    • Corporate Tax Exemption:
      • Manufacturing companies are exempt from corporate tax until Turkey joins the EU.
    • Income Tax Exemption:
      • Manufacturers that export 85% or more of their goods get an income tax exemption on employee salaries.
    • Profit Repatriation:
      • No restrictions on transferring profits out of Turkey.
    Financial & Banking Regulations (Article 9):
    • Transactions in Free Zones are conducted in foreign currency.
    • Companies can freely transfer funds internationally.
    Trade & Customs Laws (Article 8):
    • Trade between the Free Zone and Turkey is treated as foreign trade (subject to import/export rules).
    • Trade between Free Zones and other countries is free from restrictions.
    Employment Laws (Article 10):
    • Foreigners can be employed if they hold a valid work permit.
    • The company must comply with Turkish labor laws & social security rules.
    Operational Regulations & Penalties (Article 12-13):
    • Companies must comply with all Free Zone regulations.
    • Violations can lead to fines, license suspension, or revocation.

Impact on Company Registration

Law No. 3218 defines the entire legal and regulatory structure governing Mersin Free Zone, including tax benefits, trade freedom, investment incentives, and employment rules.