Establishing a software company in Turkey offers numerous advantages that can significantly benefit entrepreneurs and investors. As a leading law firm in Istanbul, Akkas & Associates Law Firm is well-positioned to guide you through the legal landscape of starting a business in this dynamic market.
Table of Contents
- Advantages of Establishing a Software Company in Turkey
- Government Incentives
- Strategic Location
- Favorable Economic Environment
- Skilled Workforce
- Growing Technology Ecosystem
- Legal and Regulatory Framework
- Access to Funding
- Conclusion & Suggestions
- Contact us for Establishing a Software Company in Turkey
Advantages of Establishing a Software Company in Turkey
Key Benefits for Software Companies in ISBI Freezone
Establishing your software company within the ISBI Freezone in 2025 comes with a remarkable array of advantages:
- 100% Corporate Tax Exemption: One of the most attractive incentives is the complete exemption from corporate tax on profits generated from activities within the Free Zone. This significantly boosts your company’s profitability and reinvestment capacity.
- 100% Income Tax Exemption on Employee Salaries (with Export Threshold): Software companies exporting at least 85% of their production can benefit from a 100% exemption from income tax on employee salaries. This translates to substantial cost savings and allows for more competitive talent acquisition.
- Full VAT Exemption: All goods and services traded within the Free Zone, and between Turkey and the Free Zone, are exempt from Value Added Tax (VAT). This streamlined tax environment reduces operational costs and simplifies financial management.
- Exemption from Customs Duties and Other Levies: Importing and exporting goods and equipment into and out of the ISBI Freezone are entirely exempt from customs duties and other associated levies. This is a crucial advantage for software companies dealing with international hardware or software components.
- 100% Foreign Company Ownership: The ISBI Freezone welcomes foreign investors with open arms, allowing for 100% foreign ownership of companies. This provides complete control over your operations and eliminates the need for local partnerships.
- Free Transfer of Profits: Companies operating in the ISBI Freezone can freely transfer their profits and revenues to any country, including Turkey, without being subject to any taxation or currency restrictions, in accordance with foreign exchange legislation. This offers immense financial flexibility.
- Simplified Bureaucracy and Operations: The Free Zone administration is designed to offer a streamlined bureaucratic process, making company establishment and ongoing operations significantly easier and faster compared to outside the zones.
These benefits create a robust and supportive environment for software companies to thrive, innovate, and expand their global footprint.
Government Incentives
The Turkish government offers various incentives to encourage the establishment of software companies. These incentives include tax exemptions, grants, and subsidies for research and development (R&D) activities. Companies located in technology development zones (TechnoParks) benefit from additional tax advantages and support.
ISBI Free Zone Incentives for Software Companies in Turkey
Turkey offers lucrative incentives for businesses operating in designated Free Zones, designed to boost export performance and economic growth. Below are the details of the incentives based on your export figures.
Incentives for Reaching a Total Export Figure of USD 2.250 Million in the Last 3 Years
Achieving this milestone grants you access to a range of benefits that significantly reduce operational costs and enhance business profitability.
- Rent Support: Up to USD 75,000 with a 50% rent support for 5 years (provided an annual export of USD 1 Million and increasing).
- Personnel Salary Support: USD 150,000 total support for 10 personnel salaries for 5 years (provided an annual export of USD 1 Million and increasing).
- License Period: 20 years.
- Tax Exemptions:
- 100% Corporate Tax Exemption.
- 100% Income Tax Exemption for Personnel (covers all personnel working in the free zone).
- 100% VAT and Stamp Tax Exemption.
- 100% Customs Duty Exemption.
- Social Security Contribution Support: 35% Employer’s Social Security Contribution Support for 7 years (provided an Investment Incentive Certificate is obtained).
Incentives for Not Reaching a Total Export Figure of USD 2.250 Million in the Last 3 Years
If your business has not yet reached the USD 2.250 million export figure in the last 3 years, you are still eligible for significant incentives.
- License Period: 3 years.
- Tax Exemptions:
- 100% Corporate Tax Exemption.
- 100% Income Tax Exemption for Personnel (covers all personnel working in the free zone).
- 100% VAT and Stamp Tax Exemption.
- 100% Customs Duty Exemption.
Note: At the end of 3 years, if you demonstrate an increasing performance with an annual export of not less than USD 1 Million, you can apply for rent and salary support with a 17-year license. You are not entitled to rent and salary support for the first 3 years.
How to Apply for Free Zone Incentives
Applying for these incentives involves a streamlined process designed to facilitate easy access for eligible businesses. Our experts at Akkas & Associates Law Firm are here to guide you through each step, ensuring that you maximize the benefits available to you.
- Eligibility Check: Determine if your business meets the export criteria for the desired incentives.
- Documentation: Prepare and submit the required documents, including proof of export performance.
- Application Submission: Submit your application to the relevant authorities.
- Approval and Implementation: Once approved, implement the incentives to reduce costs and enhance profitability.
Why Choose Akkas & Associates Law Firm
At Akkas & Associates Law Firm, we specialize in helping businesses navigate the complexities of Free Zone incentives in Turkey. Our experienced team offers tailored support to ensure you make the most of the available benefits.
- Expert Guidance: Benefit from our deep understanding of the regulatory landscape and incentive programs.
- Comprehensive Support: From eligibility checks to application submission, we provide end-to-end assistance.
- Maximize Benefits: Ensure your business takes full advantage of all available incentives to boost growth and profitability.
Strategic Location
Turkey’s geographical position serves as a bridge between Europe and Asia, providing access to a vast market of over 1.5 billion consumers. This strategic location facilitates trade and collaboration with various international markets, making it an ideal base for software companies looking to expand their reach.
Favorable Economic Environment
Turkey has been recognized for its growing economy and supportive government policies aimed at fostering entrepreneurship. The Turkish government offers various incentives for technology and software companies, including tax reductions, grants, and subsidies. These measures are designed to encourage innovation and attract foreign investment.
Skilled Workforce
Turkey boasts a young, tech-savvy population with a strong emphasis on education in science, technology, engineering, and mathematics (STEM). This results in a pool of skilled professionals who can contribute to the growth of software companies. The availability of qualified talent ensures that businesses can find the right employees to drive their projects forward.
Growing Technology Ecosystem
The Turkish technology sector is rapidly evolving, with numerous incubators, accelerators, and co-working spaces emerging in major cities like Istanbul, Ankara, and Izmir. This vibrant ecosystem supports networking, collaboration, and access to resources, making it easier for software companies to thrive.
Legal and Regulatory Framework
Navigating the legal landscape is crucial for any business. Turkey has made significant strides in improving its legal framework to support foreign investments. Establishing a software company in Turkey involves clear regulations that promote transparency and fairness. Akkas & Associates Law Firm specializes in guiding clients through the complexities of Turkish business law, ensuring compliance with all legal requirements.
Access to Funding
Turkey offers various funding opportunities for startups and technology companies. Government-backed initiatives, venture capital firms, and angel investors are increasingly interested in supporting innovative software solutions. This access to funding can be pivotal for new companies looking to scale their operations.
Conclusion & Suggestions
Establishing a software company in Turkey presents a unique opportunity for entrepreneurs and investors. With its strategic location, favorable economic environment, skilled workforce, and supportive legal framework, Turkey is an attractive destination for tech businesses.
At Akkas & Associates Law Firm, we are committed to providing the necessary legal support to help you navigate this promising landscape and achieve your business goals.
Contact us for Establishing a Software Company in Turkey
Establishing a software company in Turkey presents significant benefits, including strategic market access, cost efficiency, and robust government support. The country’s dynamic tech ecosystem, combined with a skilled workforce and advanced infrastructure, creates an ideal environment for software businesses to thrive.
Additionally, Turkey’s favorable business climate, comprehensive legal framework, and extensive trade agreements with emerging markets make it a prime destination for tech entrepreneurs. For expert legal guidance on setting up your software company in Turkey, contact Akkas & Associates Law Firm today.
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