Turkey has dramatically raised the bar in the global 'war' to attract capital, talent and businesses. At a ceremony held at Dolmabahçe Palace in Istanbul on 25 April, President Recep Tayyip Erdogan announced one of the most aggressive investment and tax packages ever presented by a country in the wider region.
The plan, titled 'Türkiye Century Strong Center for Investment,' provides that anyone who has not been a tax resident of Turkey for the past three years and decides to relocate to the country will pay not a single cent in tax for 20 full years on income and capital gains originating abroad.
In addition, the package includes:
- An inheritance tax of just 1 per cent for new residents.
- Corporate tax of 9 per cent for construction-sector exporters and 14 per cent for other exporters, down from the current 25 per cent.
- Full exemption from corporate tax for transit trade companies based at the Istanbul Financial Centre (IFC).
- A 95 per cent exemption for similar companies outside the IFC.
- Twenty‑year tax incentives for multinationals relocating regional headquarters to Turkey, with 95 to 100 per cent exemptions.
- Repatriation of capital, cash, gold and securities, with low taxation within a specified timeframe.
- A digital single‑stop platform for company registration, licensing and tax registration.
Who Ankara wants to 'poach'
With this tax package, Turkey is looking in two directions at the same time.
First, it is targeting investors and entrepreneurs leaving Dubai as instability in the Middle East increases and multinationals reassess their exposure to the region. Istanbul is being promoted as a European‑Asian alternative with greater security and connectivity.
Second, it aims to attract people and capital from Europe, presenting Istanbul as an upgraded alternative for high‑income digital nomads.
The package has not yet become law, as parliamentary approval is required, with no specific timetable yet announced for its submission.
Analysts note that a “clear legal framework and official confirmation are required before implementation,” pointing out that Turkey has a track record of abrupt tax changes. In addition, high inflation and volatility of the lira could erode the real benefits for foreign investors calculating in euros or dollars.
Erdogan’s announcements challenge Cyprus’ non‑domicile tax regime, one of the most attractive in Europe, which provides 17 years of income tax exemption on dividends and interest within the European legal framework.
The Turkish proposal is longer in duration, 20 compared with 17 years, and far more aggressive in corporate incentives. If approved and implemented, it will change the competitive landscape in the wider region.
Sources: Reuters, IMI Daily, Turkiye Today, invest.gov.tr