Free
Zone
Although
free zones are located within the political borders of the country in which
they are located, they are regions that are considered outside the customs line
in terms of foreign trade, taxation, and customs legislation. In these regions,
legal and administrative regulations in financial, commercial, and economic
fields are not applied or partially applied. Free zones, which are physically
separated from other parts of the country they are in, are given wider
incentives and exemptions for industrial and commercial activities compared to
other regions.
Free
zones are generally located close to an international port or airport, but they
are processed separately from the customs area. Goods that are not subject to
customs procedures at the entrance to the zone can be stored, processed, and
used in production in free zones. As long as they do not enter the customs
borders, there is no need to pay taxes on these goods.
Free
zones generally cover activities such as production, packaging, storage,
research and development, banking, insurance, sorting, loading, consultancy,
architecture, engineering, leasing, software, maintenance, and repair.
Free
zones are generally established for the following purposes:
· To
encourage export-oriented investment and production,
· To
accelerate foreign direct investment and technology entry,
· Directing
businesses to export,
· To
develop international trade.
Free
Zone Incentives
Companies
located in free zones can obtain various incentives and benefits according to
the countries in which they are located. These incentives and advantages, which
vary for each country, can be summarized as follows for Turkey:
· Tax
advantages for producers
· Opportunity
to obtain medium and long-term operating license
· Profit
transfer opportunity
· Facilitation
of trade
· Trade
opportunity free from customs duty procedures
· Possibility
of obtaining free movement documents required by EU and Customs Union criteria
· Interest
support on loans
· Equality
principle
· No
time restrictions
· Access
to domestic and foreign markets
· Reduced
bureaucracy
· Strategic
advantages of free zones due to their location
· Affordable
infrastructure opportunities
· Rental
support
Contribution
of Free Zones to the Country's Economy
· Free
zones not only increase the foreign exchange inflows of the country in which
they are established, but also contribute to the increase in the export
revenues of the country and the expansion of the export markets with the
exports to be made from the region.
· Thanks
to the raw materials, semi-processed and finished goods exported from the
domestic market of the country in order to use in the production activities of
the users in the free zones, a contribution is made to the country's
production.
· Free
zone users, who have tax advantages, will have the opportunity to produce under
the same conditions as their competitors abroad.
· Thanks
to the economic activities in the free zones, the country's employment is
contributed.
· Foreign
capital investments in the free zones, where production is made, bring along
technological developments, and provide technology transfer to the country.
· Goods
brought to free zones in large quantities can be imported into the country in
small batches when necessary, thereby reducing production costs.
· They
act as a steppingstone in facilitating and accelerating the export of export
products.
· The
sale of goods coming from abroad can be carried out through cross trade.
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