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Company Formation

Company Formation in the Istanbul Financial Centre

Formation of a company or opening of a branch in the Istanbul Financial Centre, the participant certificate and one-stop office procedures, and tracking of the exemptions on financial service exports in the accounting and tax records.

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Overview

The Istanbul Financial Centre (İstanbul Finans Merkezi, İFM) is the area whose boundaries are set by Law No. 7412 and where financial activities are carried out. Those who will operate in the İFM office area obtain a participant certificate (katılımcı belgesi) from the managing company (yönetici şirket) established by the Türkiye Wealth Fund (Türkiye Varlık Fonu). (Istanbul Financial Centre Law No. 7412, Art. 2, 3)

Participants are not limited to companies. Real persons and legal entities, their branches and representative offices, ordinary partnerships (adi ortaklık), liaison offices, regional headquarters and national wealth funds that obtain a participant certificate and operate in the office area can be participants. (Law No. 7412, Art. 2)

Some of the tax exemptions are aimed at financial institutions that carry out the financial activities listed in the laws, such as banking, insurance, capital markets and payment services, and at their financial service exports. The transit trade deduction and the staff salary exemptions, on the other hand, are subject to separate conditions.

KEYBIZ CPAs & Advisors advises on the formation of a company or the opening of a branch in the İFM, the participant certificate process and the tracking of the exemptions in the accounting and tax records. For the general steps of company formation, see our Limited Liability and Joint Stock Company Formation in Türkiye page.

İFM Incentives

IncentiveWho and Conditions
Financial Service Export ProfitsAs a general rule, 75% of profits from financial service exports as defined in the law is deducted from corporate income; this ratio is applied as 100% for profits relating to the 2022–2047 tax periodsFinancial institutions holding a participant certificate; the deduction is shown separately in the corporate tax return (Law No. 7412, Art. 5, Art. 6/1-a, Provisional Art. 1). For periods beginning on or after 1 January 2026, this deduction is also deducted when calculating the domestic minimum corporate tax base (Corporate Tax Law, Art. 32/C-2-d; Law No. 7582, Art. 9 and 14)
Transit Trade Profits95% of profits from selling goods purchased abroad outside Türkiye without bringing them into Türkiye, or from brokering purchases and sales of goods carried out abroad, is deducted from corporate income; for entities operating in the İFM with a participant certificate, this ratio is 100%The profit must be transferred to Türkiye by the due date of the annual corporate tax return for the relevant accounting period, and in brokering activities the seller and the buyer of the goods must not be in Türkiye. Applies to profits for tax periods beginning on or after 1 January 2026 and to returns due from 1 July 2026. (Corporate Tax Law No. 5520, Art. 10/1-i; Law No. 7582, Art. 7 and 14)
BSMVTransactions qualifying as financial service exports and amounts received in the institution’s favour in connection with these transactions are exempt from banking and insurance transactions tax (BSMV)Financial institutions holding a participant certificate (Law No. 7412, Art. 6/1-b)
Fees and Stamp DutyTransactions relating to financial service export activities are exempt from fees (harç), and the documents issued are exempt from stamp dutyFinancial institutions holding a participant certificate (Law No. 7412, Art. 6/1-c)
Staff Salaries (Law No. 7412, Art. 6/2)60% (at least 5 years of professional experience gained abroad) or 80% (at least 10 years of professional experience gained abroad) of the net actual value (gerçek safi değer) of the monthly salary is exempt from income taxStaff employed by participants in the İFM who have not worked in Türkiye in the last three years before starting work in the İFM (Law No. 7412, Art. 6/2)
Qualified Service Staff (Income Tax Law Art. 23/1-20)The portion of the salaries of qualified service staff employed in qualified service centres (nitelikli hizmet merkezi) that does not exceed 3 times the gross minimum wage is exempt from income tax; for qualified service centres operating in the İFM with a participant certificate, this limit is 5 times the gross minimum wageThis exemption does not apply if the same employee benefits from the exemption under Law No. 7412, Art. 6/2 (Income Tax Law No. 193, Art. 23/1-20; Law No. 7412, Art. 6/2)
Qualified Service Centre Profits (Corporate Tax Law Art. 10/1-j)95% of the profits that entities operating as qualified service centres under the Foreign Direct Investment Law earn from abroad exclusively within the scope of these activities is deducted from corporate income; for entities operating in the İFM with a participant certificate, this ratio is 100%The profit must be transferred to Türkiye by the due date of the annual corporate tax return for the relevant accounting period. The deduction applies for twenty accounting periods from the accounting period in which the centre starts operating; it applies to profits for periods beginning on or after 1 January 2026 (Corporate Tax Law, Art. 10/1-j; Law No. 4875, Additional Art. 1; Law No. 7582, Art. 6, 7 and 14)
Lease TransactionsTransactions relating to the leasing of real estate in the İFM are exempt from fees, and the documents issued are exempt from stamp duty(Law No. 7412, Art. 6/3)
Financial Activity FeesFinancial activity fees payable under the Law on Fees (Harçlar Kanunu) are not collectedHeadquarters and branches in the İFM of financial institutions holding a participant certificate; the period is 20 years from the date Law No. 7412 entered into force (Law No. 7412, Provisional Art. 1/2)
Limited Liability and Joint Stock Company Formation in Türkiye

Formation Process in the İFM

  1. Defining the Activity and the Structure

    It is determined whether the planned activity is one of the financial activities listed in the Law and in which form the business will be present in the İFM: as a company, branch, representative office, liaison office or regional headquarters. For financial activities, the permit and licence procedures of the relevant authority are assessed separately. For details, see our Licence Support Services page.

  2. Forming the Company or Opening the Branch

    The general provisions apply to company formation and branch opening. For foreign-headquartered entities, see our Branch Formation for Foreign-Headquartered Companies in Türkiye page.

  3. Participant Certificate

    To operate in the office area, a participant certificate is obtained from the managing company. The procedures and principles for issuing the certificate, the exemption conditions, and its suspension and cancellation are set out in the implementing regulation. (Law No. 7412, Art. 3) If the participant certificate is cancelled, the lease agreement in the İFM also terminates automatically. (Law No. 7412, Art. 9)

  4. One-Stop Office and Staff Permits

    • Participants’ applications for permits, licences and authorisations, and permit applications for their employees and the persons those employees are obliged to support, can be made through the one-stop office (tek durak büro). The one-stop office is directed and administered by the Presidency of the Republic of Türkiye Finance Office (Cumhurbaşkanlığı Finans Ofisi). (Law No. 7412, Art. 4) Following the 2026 amendment, the participant certificate is issued by the managing company. (Law No. 7412, Art. 3/3)
    • Work permit applications for foreign staff are assessed as exceptional cases under Art. 16 of International Labour Force Law No. 6735. (Law No. 7412, Art. 8)

  5. Accounting and Tax Records

    Because each incentive is tied to a different type of profit or salary, each is tracked separately:

    • Financial service exports: These are financial services provided by financial institutions holding a participant certificate to persons resident abroad and ultimately used abroad. Derivative transactions carried out by the institution in its own name and for its own account, purchases and sales of assets for its portfolio, and transactions that take the savings of persons resident in Türkiye abroad are not covered. The deduction is shown separately in the tax return. (Law No. 7412, Art. 5, 6/1-a)
    • Transit trade: The profit must be transferred to Türkiye by the due date of the annual corporate tax return for the relevant accounting period, and in brokering activities the seller and the buyer of the goods must not be in Türkiye. For entities operating in the İFM with a participant certificate, the deduction rate is 100%; for other entities it is 95%. (Corporate Tax Law Art. 10/1-i)
    • Staff salaries: Staff covered by Law No. 7412, Art. 6/2 and qualified service staff covered by Income Tax Law Art. 23/1-20 are tracked separately; the two exemptions are not applied together for the same employee.
    • The Ministry of Treasury and Finance (Hazine ve Maliye Bakanlığı) is authorised to issue rules allowing participants to keep their books and records in a foreign currency. (Law No. 7412, Art. 7)

    For details, see our Accounting and Bookkeeping page.

Frequently Asked Questions

Who Can Operate in the İFM?

Real persons and legal entities that obtain a participant certificate, their branches and representative offices, ordinary partnerships, liaison offices, regional headquarters and national wealth funds. (Law No. 7412, Art. 2)

What Is a Participant Certificate?

It is a certificate issued by the managing company that allows the participant to use the relevant independent unit and the common areas in the İFM office area. The procedures and principles are set out in the implementing regulation. (Law No. 7412, Art. 2, 3)

What Is a Financial Service Export?

Financial services provided by financial institutions holding a participant certificate to persons resident abroad and ultimately used abroad. Derivative and portfolio transactions carried out by the institution in its own name and for its own account, and transactions that take domestic savings abroad, are not covered. (Law No. 7412, Art. 5)

How Much Can Be Deducted from Financial Service Export Profits?

As a general rule, 75% of the financial service export profits of financial institutions holding a participant certificate is deducted from corporate income. This ratio is applied as 100% for profits relating to the 2022–2047 tax periods. The deduction is shown separately in the corporate tax return. (Law No. 7412, Art. 6/1-a, Provisional Art. 1)

Is There a Deduction for Transit Trade Profits?

95% of profits from selling goods purchased abroad outside Türkiye without bringing them into Türkiye, or from brokering purchases and sales of goods carried out abroad, is deducted from corporate income; for entities operating in the İFM with a participant certificate, this ratio is 100%. The profit must be transferred to Türkiye by the due date of the annual corporate tax return for the relevant accounting period, and in brokering activities the seller and the buyer of the goods must not be in Türkiye. The rule applies to profits for tax periods beginning on or after 1 January 2026 and to returns due from 1 July 2026. (Corporate Tax Law No. 5520, Art. 10/1-i; Law No. 7582, Art. 7 and 14)

Which Exemption Applies to Staff Salaries?

For staff employed by participants in the İFM, 60% of the net actual value of the monthly salary is exempt from income tax for those with at least 5 years of professional experience gained abroad, and 80% for those with at least 10 years of professional experience gained abroad. The exemption applies to staff who have not worked in Türkiye in the last three years before starting work in the İFM. (Law No. 7412, Art. 6/2)

Which Exemption Applies to Staff of Qualified Service Centres?

The portion of the salaries of qualified service staff employed in qualified service centres that does not exceed 3 times the gross minimum wage is exempt from income tax. For qualified service centres operating in the İFM with a participant certificate, this limit is 5 times the gross minimum wage. This exemption does not apply if the same employee benefits from the exemption under Law No. 7412, Art. 6/2. (Income Tax Law No. 193, Art. 23/1-20; Law No. 7412, Art. 6/2)

Can Foreign Staff Be Employed?

Yes. Participants can employ foreign staff with a work permit issued by the Ministry of Labour and Social Security (Çalışma ve Sosyal Güvenlik Bakanlığı); applications are assessed as exceptional cases under Law No. 6735, Art. 16. (Law No. 7412, Art. 8)

Can Contracts Be Made in a Foreign Language?

Articles 1 and 3 of Law No. 805, which concern the obligation to use Turkish, do not apply to transactions, contracts and correspondence that participants draw up among themselves and within the scope of their activities in the İFM. In private law transactions among themselves, participants may choose the governing law, provided that this does not conflict with the legislation that governs their activities. (Law No. 7412, Art. 7)

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