Free zone company registration in European Free Zone (ASB), Turkey. Service offer

*This free zone is designated as EFZ (European Free Zone) or as ASB (Avrupa Serbest Bölgesi – in Turkish).

** The cost of the package may vary depending on the number of shareholders and the type of licence.

1. Preparation of an application for a licence to the General Directorate of Free Zones under the Ministry of Trade. The application describes in detail the company’s business activities, ownership structure and expected financial performance.
2. The company pays the application fee of USD 5 000.
3. The application is submitted to the Directorate. The assessment period is 1 month.
4. In the case of approval, the free zone administration proceeds with the registration of a legal entity. In the case of refusal, the applicant receives a refund of USD 4 500 (90% of the fee).
5. After the legal entity is registered, it makes a lease agreement with the free zone administration to rent premises in the free zone’s territory.
6. The lease agreement is submitted to the Directorate.
7. The Directorate grants an operating licence to the company.

The European Free Zone is focused only on trading companies and companies that produce physical goods. IT companies, service and consulting companies cannot claim the benefits it provides. The free zone administration is first and foremost interested in companies dealing with cars spare parts, industrial equipment and food products.

There are no requirements for the size of turnover or other financial results of companies.

The company and the free zone administration make an office lease agreement; the address of such office is considered the official registered office address of the company.

All free zones in Turkey expect a company to rent physical offices and create economic substance. As a general rule, the European Free Zone makes available for rent buildings, closed areas, modular workplaces, offices, open stock areas and warehouses, and industrial premises.

The procedure of applying for a work permit for foreign employees is similar to the standard one, but the application is submitted to the General Directorate of Free Zones under the Ministry of Trade. If a company can prove that a foreign employee is highly qualified and essential to its business, then it can employ him without having to hire 5 local employees.

Documents to be submitted by the employer:

• Application form (scanned copy and original);
• Completed and signed employee questionnaire (scanned copy and original);
• Extract from The Trade Registry Gazette of Turkey, showing the list of shareholders and the share capital structure of the employing company (scanned copy and original);
• Balance sheet and profit and loss statement for the last year, certified by the tax office or a certified accountant (if applying online, only scanned copies);
• Proof of hiring Turkish employees along with a foreign applicant (if applying online, only scanned copies);
• Certified power of attorney from the employer for the person who submits the application (if applying online, only a scanned copy).

Documents to be submitted by the employee:

• Turkish residence permit (if applying from within the country);
• Passport copy with translation (if the document does not spell the holder’s data in Latin); the passport must be valid for at least another 60 days;
• Notarized copy of the diploma of education with translation;
• For employees with higher education received outside Turkey – a certificate of equivalence of their diploma to similar Turkish diplomas.

Annual licence renewal is not required. The company is required to pay rent and taxes.

Companies registered in the free zone and engaged in the production of goods are exempt from:

• corporate income tax (25%);
• payroll tax on employees’ salaries (if they export more than 85% of their products);
• value added tax (VAT);
• customs duties.

Other companies are only exempt from:

• VAT;
• customs duties.

All companies registered in the European Free Zone are exempt from VAT.

All Turkish companies are required to keep accounting records and prepare financial statements in accordance with Turkish Financial Reporting Standards, which are fully compliant with the International Financial Reporting Standards. Financial statements must be presented at the annual meeting of members.

Companies are only subject to audit of their financial statements if they meet two of the following criteria in two consecutive financial periods:

• total assets are or exceed TRY 35 000 000;
• net annual sales are or exceed TRY 70 000 000;
• number of employees is or exceeds 175.

As a general rule, the tax period for corporate income tax is the calendar year. The tax return is filed by the 30th day of the fourth month after the reporting period end-date (usually this is 30th April). Quarterly advance payments are made throughout the year. The final tax is paid on the tax return filing deadline date.

Turkey does not allow tax consolidation. Each company submits a tax return separately from other companies in the group.

[1] The cost of the package may vary depending on the number of shareholders and the type of licence.

[2] You can prepare apostilled copies of passports without our help.

[3] If an apostilled power of attorney is required for the registration of a company, you can prepare and submit it to us (we will provide the required text of the power of attorney).

[4] The minimum fee for keeping accounting records and preparing financial statements for a Turkish company is USD 500 per month (this fee does not include the audit of financial statements).