Free Zones are defined as special sites within the country but deemed to be outside of the cus­toms territory and they are the regions where the valid regulations related to foreign trade and other financial and economic areas are not applicable, are partly applicable or new regulations are tested in. Free Zones are also the regions where more convenient business climate is offered in
order to increase trade volume and export for some industrial and commercial activities as com­pared to the other parts of country.
 
The efforts to establish free zones in Turkey date back to the early years of the Turkish Republic and several free zones laws were put into force that could not be applied for reasons peculiar to their time. With the adoption of the Decisions of January 24, 1980, through which the import substitution policies were abandoned and arrangements toward liberalizing the economy became effective, free zones also came on the agenda among other liberalization policies. The first positive result achieved by the statement “Free Zones will be established” that was inserted in the 1984 Executive Plan which was put into force by the decision of Council of Ministers dated September 22, 1983 no:83/7077. The studies gained impetus and the Free Zones Law No:3218 came into effect in June 15, 1985.In the Free Zones Law, the main objectives of the establishment and operation of free zones
are stated as increasing export-oriented investment and production in Turkey, accelerating the entry of foreign capital and technology, procuring the inputs of the economy in an economic and orderly fashion and increasing the utilization of
external finance and trade possibilities. Since the adoption of the Free Zones Law,
• Mersin (1987), Antalya (1987) and Adana-
Yumurtal›k (1999) Free Zones on the
Mediterranean coast,
• Aegean (Izmir-1990), Denizli (2001) and
Izmir Menemen Leather (1998) Free Zones on
the Aegean region,
• Istanbul Atatürk Airport (1990), Istanbul
Leather and Industry (1995), Istanbul Thrace
(Catalca-1998) and Istanbul Stock Exchange
International Securities (1997) Free Zones in
Istanbul,
• Trabzon (1992), Rize (1998) and Samsun
(1998) Free Zones on the Black Sea coast,
• Mardin (1995) and Gaziantep (1999) Free
Zones in South-East Anatolia,
• Eastern Anatolia (Erzurum-1995) Free
Zone in the eastern part of Turkey,
• Europe Free Zone (Tekirdag-Corlu-1999)
on the European side of Turkey,
• Bursa (2001), Kocaeli (2001), Tubitak­
Marmara Research Center Technology (2002)
Free Zones in the Marmara Region,
• Kayseri Free Zone in the Central Anatolia
became operational.
In general all kind of activities can be per­formed in Turkish Free Zones such as manufac­turing, storing, packing, trading. Investors are free to construct their own premises, while zones have also available office spaces, ateliers, or warehouses on rental basis with attractive terms. All fields of activities are open to Turkish and foreign companies.

Incentives and Advantages Offered in the Turkish Free Zones
Turkish free zones offer foreign investors attractive incentives including 100 percent of repatriation of capital and 100 percent foreign ownership and there exists no distinction between foreign and domestic firms in terms of advantages offered by the Turkish free zones.

The advantages offered in
Turkish Free Zones are as follows:

• Free zone users that operate under pro-
duction licence are exempted from the income or
corporate taxes until the end of the taxation peri-
od of the year Turkey becomes full member of
the European Union. The free zone users that
obtained operating licence other than production

before 06/02/2004, the income or corporate
tax exemption continues during the validity peri­
od of the operating licence. The free zone users
that obtained operating licence other than pro­
duction after 06/02/2004 do not enjoy income
or corporate tax exemption.
• The validity period of an operating licence is
maximum 10 years for tenant users, and 20 years
for users who wish to build their own working
spaces in the zone; If the operating licence is for
production, these terms are 15 and 30 years for
tenant users and investors, respectively.
• Currencies used in the zone are convertible
foreign currencies dealt by the Central Bank of
Turkey.
• There is no limitation on the proportion of
foreign capital participation in investment within
the Free Zones.
• There are no procedural restrictions
regarding price, standards or quality of goods in
the Turkish Free Zones.
• Since the trade conducted between Turkey
and the free zones is subject to the foreign trade
regime, free zone users can purchase goods and
services from Turkey without paying value added
tax.
• In contrast to most Free Zones in the
world, sales to the domestic market are allowed.
• The goods can remain in the zones without
any time limit.
• The incentives and advantages provided in
the free zones are available to all firms regardless
of their origin.
• Turkish Free Zones are close to the EU and
Middle East markets, adjacent to the major
Turkish ports on the Mediterranean, Aegean and
Black Seas and have easy access to international
airports and highways.
• Infrastructure of the Turkish Free Zones is
competitive with international standards. The
rents of closed and open areas are lower than other countries.
• Since free zones are part of the Turkey-EU
Customs Territory, the goods in free circulation
can be sent to the EU Countries by an A.TR cer­
tificate. Customs duties for the goods of third
country origin are also not paid at the entry into
the free zones. However, the goods of third
country origin that are not in free circulation can
be sent to the EU countries by an A.TR certifi-
cate, only after the customs duties are paid over
the rates determined in the Common Customs
Tariff.
• The goods in free circulation can be sent to
Turkey or to the EU countries from the free
zones without any customs duty payment.
Moreover, no customs duty is applied on the
goods of third country origin at the entrance into
the free zones and exit to the third countries.
Operating in a free zone can be more
advantageous for the firms, that;
• require minimum bureaucracy,
• sell abroad the goods they produce with
imported inputs,
• engage in labour intensive sectors,
• engage in re-export,
• prefer to use foreign currency in all trans-
actions (wholesalers, manufacturers),
• demand modern office and working spaces
with good and ready infrastructure.

General information:

Gaziantep plays an important role in the Turkish economy with its industrial and commercial infrastructure; the city acts as a bridge between important regions due to its geographical location in a commercial center. The number of large industry businesses established in Gaziantep comprise four percent of the Turkish industry in general, and small industries comprise six percent. The industrial sector with many small and medium size businesses offers a wide opportunity of employment.  The brances of the manufacturing industry make up 28.72 percent of the economically active population. The major areas of the existing businesses in Gaziantep are mainly located in the regions of Organize Sanayi Bölgeleri Örnek Sanayi, Küçük Sanayi Bölgesi, Nizip Caddesi, 1, and 2, Ünaldı - Şehreküstü.

Manufacturing Industry and its Sectoral Structure:

The manufacturing industry in Gaziantep is highly developed, and as a result the city is known as  an economical center in the East and South East Anatolia regions. Besides small manufacturing shops and workshops in the manufacturing industry, the city has also attracted many large size installations. The industry in Gaziantep is one of the leading important production centers in Turkey across many sectors. 

The manufacturing industry in Gaziantep is comprised of eight groups, namely food, textile, chemicals-plastics, machinery-metals, automotive subcontractors, building subcontractors, leather and processed leather products and forest-wood-paper products industries.

Organized Industrial Zone: The Organized Industrial Zone is a system that offers easier and more competitive production for medium and small size operations that cooperatively manufacture products, by utilizing common substructure facilities on a well planned site. Currently, Gaziantep has three organized industrial zones covering 12 million sqm. The first Organized Industrial Zone was established on a 210 hectare land, with 138 active firms. In general, such firms are medium sized and active in sectors such as textile, machinery metal, chemicals, plastics and food.  There are 20,000 employees working in the First Organized Industrial Zone and a monthly average of 20 million Kw/h power and 10O.OOOm tons of city water is consumed.

The second Organized Industrial Zone has been established on a 450 hectare land and spaces have been allocated for 277 industries. Although its substructure has not been completed yet, 150 large scale firms have started acting, and currently 100 firms are at the construction stage in this zone. The main industries found here include textiles, chemicals, plastics and food.  There are 20.000 employees, and a monthly average of 25 million kW/h power and 100.000 m tons of city water is consumed.

The third Organized Industrial Zone has been planned on 540 hectares of land. More than 900 industries have requested for allocation of a lot to act in this zone, but only 297 lots were available. Currently 100 firms have already started acting in textile, food, building materials and synthetic weaving sectors.  In addition to this, a fourth Organized Industrial Zone is at the stage of establishment to satisfy the demands of the remaining industries in Gaziantep.

Örnek Sanayi and Küçük Sanayi Sitesi: (Model and Small Industry Sites)

Örnek Sanayi Sitesi is a zone for 50 sample businesses over a 800 sqm covered area, allocating 350.000 sqm of land for each and is the result of a partnership between the Ministry of Industry and Commerce and United Nations Industrial Development Organization (LlNIDO).

This site was established to act as an example and provide incentive to small and medium size industries on operation volumes and production methods. The main sectors in this site are textile machinery, steel casting, automotive spare parts, steam boilers, dam equipment’s, grains and pulses process machinery, metal and wood process machinery and die and packing industry installations. There is a total of 3620 business places in all three small industrial sites, and a total of 25,000 workers are employed.  KOSGEB has been established for the purpose of servicing industries in the region and offers services of training, engineering, consultancy and laboratories to the operations in this region.

Nizip Street and lts Neighborhood:

The first zone that has been active in the city-center before the establishment of Organized Industrial Zones and small industry sites was Nizip Street; 150 firms are active in this region.  In general, the firms that are active in this region manufacture plastics, shoes, flour, semolina, carpet, acrylic thread, cotton thread and metal goods. These operations having been surrounded by the city-center due to fast population increases and urbanization have the tendency of moving their production facilities in full or in part to the industrial zones.

Ünaldı Şehreküstü Region:

This is one of the first settlement regions for industries in Gaziantep, and about 700 small and medium sized firms can be found here. The majority of the firms are factories for lentil processing, plastics and carpets.

SEAP PROJECT

SEAP is an integrated Regional Development Project which encompasses industry agriculture, road construction, education, health and other similar sectors, and which will help tremendously to improve the socio-economic structure of the region. It is the biggest large-scale project ever carried out by the Central Government in a regional sphere.

Because its industrial and economic structure surpasses that of other towns in the SEAP area, Gaziantep is very closely involved with this project and through the SEAP irrigation network project, some areas of Gaziantep will be irrigated. As a consequence, yields will rise, product diversity for domestic and export markets will be enhanced, and product fertility will be increased by development in product design and rotation. With SEAP in Gaziantep animal husbandry has improved, fish breeding has already started in areas with sufficient water, and the transportation of passengers and cargo has expanded. As a parallel to this increase, new highways have been built; a!I of these things have served to make the city more attractive and resulted in an increase in the population.

All of these developments throughout the SEAP project will be a source of employment, bringing a solution to unemployment and migration problems in the city. Thanks to the infrastructure which is already in place, its location at an important junction and its economic and industrial structure, Gaziantep, along with those provinces under its influence, will be able to offer a wide range of products to domestic and foreign markets by taking advantage of the region’s raw materials and agricultural resources.

Source : GSO