Definition and History of Free Trade Zone

Definition and
History of Free Trade Zone

A free trade zone, in general, is where legal, and
administrative regulations relating to the business, financial, and economic
zones that are enforced at the level of one country are not enforced or partially
enforced, while the government is motivated. It provides more extensive
opportunities for industrial and commercial activities, including a comfortable
business environment and tax breaks for investors.

As the idea spread, the share of free zones in
industrial development in developing countries and their exports increased, and
the number of free zones around the world began to increase.

It is worth noting that more than 850 free zones are
active in more than 100 countries, especially in countries such as the United
States, Mexico, Brazil, Argentina, Germany, England, Spain, Bulgaria, Hungary,
Romania, India, China, South Korea, Indonesia, Egypt, Iran, Jordan, and Turkey.

Although free zones have been established in African
countries in recent years, most of them are found in Asian and South American
countries.

Free Trade Zones in Turkey and Ranking of Izmir in
Free Zones in Turkey

The most important developments in the creation of
free zones in Turkey began with the implementation of the January 24, 1980
decisions. According to the Ministry of Economy of Turkey, free zones in the
country have played a significant part in the production, employment, and trade
since 1985. In 2011, the total share of free trade in the free zones was 22.6
billion dollars, and 54,000 people were employed there.

The first free zones in Turkey were established in
1985 in Mersin and Antalya. In 1987, the Aegean Free Zone and the Free Zone of
Izmir were established, and the two Turkish Free Zones began operating in the
city of Izmir. It should be noted that the maximum volume of Turkish trade in
the free zone is due to the Aegean Sea. Aegean Free Zone and Izmir Free Zone
came in first place with 7.7 billion dollars in 2011, according to statistics.

The Free Trade Zone of Istanbul came in third with
3.6 billion dollars and Mersin Free Trade with 2.6 billion dollars,
respectively.

There are currently 21 free trade and industrial
zones in Turkey that are particularly attractive to companies and foreign
investors due to various tax breaks and unique facilities.

These include:

An excellent opportunity to sell to Turkey’s big
domestic market

Possibility to rent forced business units at
reasonable cost

Possibility of transferring income from freelance
activities into Turkey or other countries efficiently and without authorization

Exemption from income tax on manufacturing
activities

VAT exemption

Exemption from customs duties

Bank Transaction Tax Exemption

Foreign trade without legal restriction

Easy access to Turkish ports

Lack of quality, price and time limits for products
and commodities

Unlimited investment in founding companies

Providing all benefits equally, regardless of
nationalities

Advanced infrastructure in free trade zones

Important note:

It is worth noting that companies that are not
manufacturing, exporting, or transit only do not receive VAT and customs
duties, for example, if they send sex to free zones in Europe or any other
country. And later exported to a third country, in the process, no customs
duties will be paid.

Business licenses for companies residing in the
Turkish Free Zones are granted for companies with no production activity for
ten years, and companies with production activity for ten years.

Any purchase and sale between companies in the Free
Zones and companies within Turkey is subject to international trade
regulations, in other words, goods sold from within Turkey to the Free Zones
are subject to the laws of export and products sold within Turkey. It also
covers import laws.

The goal is to create free zones in Turkey

Encourage production and investment in the export
sector

Accelerate foreign direct investment and use of all
kinds of technology

Directing the business towards export

Improving international trade

 Free Zones function in Turkey to encourage
investors

Creating suitable land and locations for foreign
investment and developing technologies

Manufacturers can use some raw materials and
intermediates as needed, quickly, and without spending time.

 Providing government benefits and incentives,
making it possible to produce and export low-cost, tax-exempt goods

 Benefit from Turkey as transit to other
countries

Creating new job opportunities

Restrictions on Turkish Free Trade Zones

In addition to the benefits of free trade zones,
there are restrictions on some products in free trade activities.

Free Trade Zone in Turkey

Aegean Free Zone Ege Serbest Bölgesi

Izmir Menemen Deri Serbest Bölgesi Leather Free Zone

Antalya Free Zone Antalya Serbest Bölgesi

Bursa Serbest Bölgesi Free Zone Bursa

Mersin Serbest Bölgesi Free Zone

Istanbul Free Trade and Industrial Zone Endstanbul
Endüstri ve Ticaret Serbest Bölgesi

Kocaeli Free Zone Kocaeli Serbest Bölgesi

European Free Zone Avrupa Serbest Bölgesi

TÜBİTAK-Mam Tek Free Zone. Serbest Bölgesi

Kayseri Serbest Bölgesi Free Zone

Istanbul Free Zone İstanbul Trakya Serbest Bölgesi

Istanbul Atatürk Airport Free Zone Istanbul
atstanbul Atatürk Havalimanı Serbest Bölgesi

Adana Free Zone Adana-Yumurtalık Serbest Bölgesi

Samsun Serbest Bölgesi Free Zone

Gaziantep Free Zone Judge Serbest Bölgesi Free Zone

Trabzon Serbest Bölgesi Free Zone

Denizli Serbest Bölgesi Free Zone

Mardin Serbest Bölgesi Free Zone

Rize Serbest Bölgesi Free Zone

East Anatolian Free Zone Doğu Anadolu Serbest
Bölgesi

Menstanbul Menkul Kıymetler Borsası Serbest Bölge
Stock Exchange Free Zone

Istanbul Trakya Free Zone İstanbul Trakya Serbest
Bölgesi

Free Trade Zone Technology Marmara Research Center
Tübitak Marmara Araştırma Merkezi Teknologi Serbest Bölgesi

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