Türkiye Unveils Major Investment Incentives: Corporate Tax Cuts and Investor-Friendly Reforms

Recep Tayyip Erdoğan announced a comprehensive package of economic measures aimed at boosting investment, exports, and Türkiye’s role as a regional financial hub. Key steps include cutting corporate tax to 9% for manufacturing exporters, expanding tax exemptions at the Istanbul Finance Center, and offering long-term tax advantages to foreign investors and returning entrepreneurs.

Sharp Corporate Tax Cuts for Exporters

The most significant policy shift targets export-driven industries:

• The standard corporate tax rate remains at 25%
• Under the new framework:
  • Manufacturing exporters’ tax rate reduced to 9%
  • Other exporters’ tax rate lowered to 14%

The move is designed to enhance competitiveness, support industrial production, and strengthen Türkiye’s export base—particularly in higher value-added sectors.

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Expanded Tax Incentives for Financial Sector

The government is also deepening incentives tied to the Istanbul Finance Center:

• Transit trade profits will be fully exempt from corporate tax
  (up from a previous 50% exemption)
• For companies operating outside the financial center:
  • 95% of transit trade income will be tax-exempt
• Multinational firms relocating regional headquarters to Türkiye will benefit from:
  • Up to 20 years of tax advantages on overseas income managed from Türkiye

Additional incentives include income tax exemptions for qualified employees working within these structures.

20-Year Tax Break for Returning Entrepreneurs

To attract capital and talent, Türkiye is introducing a long-term incentive scheme:

• Individuals who have not been tax residents in Türkiye for the past three years:
  • Will pay no tax on foreign income for 20 years
  • Will only be taxed on domestic earnings
• Inheritance tax for such individuals:
  • Reduced to 1%

This policy targets high-net-worth individuals, entrepreneurs, and global professionals.

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“One-Stop Office” to Simplify Investment

A new administrative model aims to reduce bureaucracy:

• The “One-Stop Office” system will centralize:
  • Company formation
  • Work and residence permits
  • Tax and social security processes
  • Investment incentives and environmental approvals

The platform will operate under the coordination of the Presidency Investment Office, with the goal of accelerating large-scale foreign direct investment.

Asset Repatriation Measures

Authorities also plan to encourage inflows of foreign-held assets:

• Cash, gold, and securities held abroad:
  • Can be transferred into Türkiye under low-tax arrangements

This step is aimed at boosting foreign exchange reserves and increasing financial system liquidity.

Policy Focus: Investment, Exports, and Capital Inflows

The package reflects a broader economic strategy centered on:

• Strengthening export-led growth
• Attracting international capital
• Positioning Türkiye as a regional financial and logistics hub

While the measures provide substantial fiscal incentives, their effectiveness will depend on implementation, regulatory clarity, and broader macroeconomic stability.