Turkiye has unveiled a comprehensive tax reform package aimed at attracting high-net-worth individuals and large corporations, leveraging its strategic location and infrastructure to become a global financial and logistics hub. The reforms, announced by the finance minister with support from President Recep Tayyip Erdogan's government, opposition parties, think tanks, and the Istanbul Chamber of Commerce, include a reduction in corporate tax for manufacturing exporters from 25% to 9%, zero income tax on foreign income for new residents for 20 years, and a 1% inheritance tax.
Key Tax Incentives for Individuals and Corporations
The Istanbul Chamber of Commerce stated: "The announced incentives, in this period when global supply chains are being reshaped by the developments in the Middle East, will reinforce our country's position as a financial, logistics and trade centre, as well as strengthen its mission as an island of regional stability." The reforms target both individual and corporate relocations. For individuals, foreign income is tax-free for 20 years, with a residency requirement of at least 183 days per year. Additionally, a 1% inheritance tax—down from 10%—and a 2% tax on repatriated assets (with no audit on source) are designed to attract wealthy foreigners. Property investment of $200,000 grants permanent residency, while $400,000 qualifies the investor, spouse, and children for citizenship.
Corporate Tax Cuts and Exemptions
Corporate tax for manufacturing exporters is slashed to 9%, and capital outlays such as land and machinery are exempt from VAT and customs duties, saving up to 25% on capital investments. Regional headquarters in the Istanbul Financial Centre enjoy 20 years of tax-free overseas income, and a 100% transit trade tax exemption applies to profits from goods and services not produced in Turkiye. A one-stop digital hub will streamline company incorporation, tax permits, residency, work permits, and environmental approvals.
Strategic Location and Infrastructure
Turkiye's position between Europe, the Middle East, Central Asia, and North Africa, combined with advanced seaports, international airports, rail links, and integrated supply chains, enables manufacturers to respond quickly to global demand. These reforms are expected to boost the manufacturing sector's investment-to-GDP ratio, increase employment for Turkiye's young population, and enhance exports. The package aims to compete with hubs like Dubai, Hong Kong, Singapore, Geneva, and Amsterdam by offering a 100% transit trade exemption at the Istanbul Financial Centre.
Impact and Outlook
President Erdogan's supply-side economic policy is anticipated to accelerate economic and employment growth, positioning Turkiye as an attractive destination for foreign capital and skilled talent. The reforms represent a bold move to leverage tax cuts as an equal opportunity employer, according to the writer, a philanthropist and economist based in Belgium.
