Turkey’s Law No. 7582: A New Tax Incentive Package for International Investors, Entrepreneurs and Multinational Groups

Turkey has enacted a wide-ranging tax and investment reform package under Law No. 7582. The reform is intended to strengthen Turkey’s position as a destination for foreign direct investment, internationally mobile entrepreneurs, group service centres, manufacturing operations and high-net-worth individuals with cross-border assets. The draft on which this article is based correctly identifies the reform as a strategic attempt to improve Turkey’s competitive position against other relocation and investment jurisdictions. The more important professional question is how the incentives will operate in practice, what they do not cover, and how advisers should manage the surrounding tax-residence, source-of-income, asset-disclosure, banking, accounting and international-compliance issues.

The package is notable because it does not focus on one isolated measure. It combines a long-term exemption for certain foreign-source income of qualifying new individual residents, a reduced inheritance-tax rate for those within the personal exemption regime, an asset-disclosure mechanism, enhanced incentives for technology start-ups, a reduced corporate-tax rate for eligible production activity, and a new qualified service centre model for multinational groups. Taken together, these measures are likely to be of interest to business owners, family offices, senior executives, internationally mobile founders, and multinational groups considering the location of management, shared-service, production or investment activities.

The reform should nevertheless be approached with a degree of caution. The statutory text gives the Turkish Ministry of Treasury and Finance and other competent authorities powers to determine detailed procedures, and implementing communiques or administrative guidance may materially affect how the rules are applied. A client-facing analysis should therefore distinguish between the headline incentives and the practical conditions that must be satisfied before a client may safely rely on them.

Background to the reform

Law No. 7582 was adopted on 21 May 2026 and published in the Official Gazette dated 4 June 2026. It amends several legislative instruments, including the Income Tax Law, Corporate Tax Law, Inheritance and Transfer Tax Law, Foreign Direct Investment Law, legislation relating to research and development, and the Istanbul Finance Centre framework.

From a policy perspective, the reform has two connected objectives. The first is to make Turkey more attractive to internationally mobile individuals and investors by reducing the Turkish tax cost of foreign-source income for a defined period. The second is to increase the country’s appeal as a location for business activity, including manufacturing, agricultural production, technology entrepreneurship, international service centres and finance-centre operations. The reform is therefore both a personal-tax relocation measure and an economic-development instrument.

For professional advisers, the reform should not be assessed only by headline rates. The relevant questions include the individual’s tax residence history, whether income is genuinely foreign-source for Turkish purposes, whether assets can be disclosed and repatriated through banking channels, how foreign taxes and exit taxes interact with Turkish exemptions, and whether a corporate incentive may be affected by minimum-tax, transfer-pricing or substance requirements.

The 20-year foreign-income exemption for qualifying individuals

The most prominent individual measure is the introduction of a 20-year exemption for foreign-source income and gains of certain individuals who become regarded as settled in Turkey. The statutory condition is that, before becoming treated as settled in Turkey, the individual must not have had residence in Turkey and must not have had Turkish tax liability during the preceding three calendar years. Where the conditions are met, the individual’s income and gains derived outside Turkey may be exempt from Turkish income tax for a period of 20 years.

This measure is likely to attract attention from internationally mobile founders, investors, remote business owners and family-office principals. It may be particularly relevant where the individual has foreign dividends, interest, capital gains, rental income, royalties or other foreign-source returns. However, advisers should avoid presenting the rule as an unrestricted exemption until the client’s facts have been examined. The source of income, the timing of residence, the individual’s previous Turkish connections, and any remaining tax exposure in the former jurisdiction must be reviewed carefully.

The statutory text also states that income within the exemption does not need to be included in an annual Turkish income-tax return, and that such income is not included where a return is filed for other reasons. Corresponding expenses and costs are not taken into account in determining taxable income, and foreign taxes paid on exempt income cannot be credited against Turkish income tax. These mechanics are important because they make the exemption attractive, but they also prevent taxpayers from using foreign taxes or related costs to optimise other Turkish tax positions.

The practical risk is evidential. A client may believe that foreign-source income is automatically outside Turkish tax; the tax authority may later examine whether the statutory conditions were actually satisfied. If the conditions are subsequently found not to have been met, the non-assessed tax may be treated as tax loss. For that reason, residence history, date of relocation, source analysis and documentary support should be prepared before the client relies on the exemption.

Inheritance-tax treatment during the exemption period

Law No. 7582 also introduces a reduced inheritance-tax rate for persons benefiting from the new foreign-income exemption. In broad terms, inheritance transfers occurring during the relevant exemption period are subject to a 1% rate. This is a significant estate-planning feature and may be commercially important for high-net-worth families considering Turkey as part of wider residence and succession planning.

This point should be handled carefully in client materials. The measure should not be treated as a complete succession-planning solution. It needs to be assessed together with the law governing the situs of assets, the residence and domicile concepts of other jurisdictions, forced-heirship rules where relevant, double-tax treaty availability or absence, banking documentation, family governance arrangements, and the client’s existing trusts, foundations, companies or investment holding vehicles.

Asset-disclosure and repatriation mechanism

A further important part of the package is an asset-disclosure mechanism, commonly described in Turkish commentary as an asset-peace or asset-regularisation measure. The statutory wording refers to money, gold, foreign currency, securities and other capital-market instruments held abroad, and to certain assets held in Turkey but not recorded in statutory books. The relevant disclosure period runs until 31 July 2027, subject to the extension powers provided in the law.

The tax cost depends on the period for which the declared assets are committed to certain approved instruments or accounts. The general rate is 5%, but lower rates may apply where the assets are kept in specified Turkish instruments for a defined period. In some circumstances, a 0% rate may apply where the assets are committed for at least five years. The law also provides increased rates for later disclosures made from 1 January 2027 to 31 July 2027.

For advisers, this mechanism requires careful AML, source-of-wealth, banking and tax-risk analysis. An asset-disclosure regime is not a substitute for knowing the source of funds, nor does it remove the need to consider sanctions, exchange-control restrictions, anti-money-laundering obligations, reporting requirements in other jurisdictions or possible criminal-law considerations. Clients from jurisdictions with complex foreign-exchange, sanctions or capital-control issues should be advised that tax regularisation in Turkey may not resolve non-Turkish compliance issues.

Corporate measures: production, technology and qualified service centres

The reform also contains several corporate measures which may be relevant to operating companies and multinational groups. First, for companies holding an industrial registration certificate and actually carrying on production activities, the corporate tax rate is reduced to 12.5% for profits derived exclusively from production activities. A similar reduced rate applies to agricultural production activity. The measure applies to profits derived in the 2027 and subsequent taxation periods.

Secondly, the reform enhances the employee share incentive rules for qualifying technology-start-up companies. The exempt amount for employee share benefits is increased to twice the employee’s annual gross salary, and the holding-period mechanics are amended. This is particularly relevant for technology founders seeking to attract and retain skilled staff through equity-based incentives.

Thirdly, the reform creates a qualified service centre framework. A qualified service centre is, broadly, a Turkish capital company established to provide specified services to a related group operating in at least three different countries, and deriving at least 80% of its annual revenue from overseas related companies or the group. The permitted service categories include finance, strategic management, risk management, treasury, budgeting, financial reporting, international accounting and compliance, audit, digital transformation, technology consultancy, data analysis, certain legal-advisory coordination, brand management, human resources, training, technical support, R&D-related coordination and similar group-support functions.

For qualifying service centres, 95% of foreign-source income from qualifying activities may be deductible for corporate tax purposes, increasing to 100% in certain specified areas such as the Istanbul Finance Centre or qualifying zones, subject to statutory conditions including transfer of the income to Turkey by the relevant corporate-tax filing deadline. The deduction is available for 20 accounting periods from the period in which the qualified service centre begins operations.

International positioning and competitive limits

It is understandable that the reform is being compared with regimes in Cyprus, Portugal, the United Arab Emirates and other relocation or investment hubs. Turkey’s new personal exemption is long in duration and potentially broad in scope, while the corporate measures are directed at real economic activity and group service functions. Nevertheless, any comparison should be made with caution. A low headline rate or exemption period does not by itself determine the attractiveness of a jurisdiction.

Clients will also consider the stability of tax administration, banking access, treaty network, exchange-of-information exposure, immigration status, corporate-law flexibility, availability of qualified staff, cost base, currency risk, and the treatment of distributions or exits from existing structures. In many cases, the relevant comparison will not be Turkey versus another jurisdiction in the abstract, but whether Turkey works for the client’s specific asset base, operating model, family circumstances and long-term exit plans.

For large multinational groups, the OECD Pillar Two global minimum-tax framework may reduce the practical benefit of certain corporate incentives where the group is within scope and the Turkish effective tax rate falls below the applicable minimum level. This does not make the Turkish measures irrelevant, but it means that the benefit must be modelled at group level rather than assessed solely by reference to Turkish domestic law.

Practical implications for business owners and advisers

For business owners and internationally mobile investors, the reform creates genuine planning opportunities. It may support a relocation strategy, an asset-regularisation exercise, a manufacturing investment, a technology start-up incentive plan, or the establishment of a Turkish shared-service centre. However, each of these outcomes requires disciplined implementation.

The first practical step is to identify the client’s objective: personal tax residence, succession planning, asset regularisation, corporate production activity, group service centralisation, or a combination of these. A client pursuing several objectives at once should be advised that the documentation must be coherent across immigration, tax, accounting, banking, corporate and family-governance files.

Secondly, advisers should prepare a source and residence analysis. For individuals, this means reviewing prior Turkish connections, the date of relocation, days of presence, permanent home, centre of vital interests, business management roles, and the origin of foreign income. For companies, it means identifying the activity that produces the profit, the place where people functions are performed, the contracting chain, the related-party pricing model and the evidence of substance in Turkey.

Thirdly, advisers should consider the former jurisdiction. An individual leaving another country may have exit-tax exposure, continuing residence exposure, controlled-foreign-company issues, reporting obligations or wealth-tax implications. A corporate group relocating service functions may have transfer-pricing, permanent-establishment or withholding-tax consequences outside Turkey. These foreign issues can materially affect the net value of the Turkish incentive.

Particular relevance for third-country clients

The reform is especially relevant for internationally active clients from third countries, including entrepreneurs, investors and business families from Russia, Ukraine, China and other jurisdictions who are considering a broader relocation, asset-management or operating-structure strategy. Such clients may have international income streams, family assets, offshore holdings, operating companies, investment portfolios, banking relationships and historic tax positions in more than one jurisdiction.

For these clients, the Turkish rules should be considered as part of a wider cross-border plan. The question is not only whether Turkey offers an exemption, but whether the client can safely document eligibility, move or disclose assets through acceptable channels, maintain banking access, avoid inconsistent tax-residence claims, and align the personal relocation with the governance of operating companies and investment vehicles.

Advisers should also be mindful that asset-disclosure or tax-incentive regimes do not override international transparency standards. Bank due diligence, beneficial-ownership enquiries, sanctions screening, common reporting standard exchanges, local filing obligations and evidential requests from foreign authorities may remain relevant. In practical terms, the strongest planning position is one that can be explained consistently to a tax authority, bank, auditor, immigration authority and corporate registry.

What the reform does not mean

The reform should not be overstated. It does not mean that all foreign nationals moving to Turkey are automatically outside Turkish income tax. It does not mean that Turkish-source income is exempt. It does not remove the need to determine the source of income, the client’s tax residence under foreign law, or the effect of double tax treaties. It does not eliminate AML or source-of-wealth obligations for banks and professional advisers. It does not automatically make Turkey the most suitable jurisdiction for every entrepreneur, investor or group.

Equally, the corporate incentives should not be treated as pure rate arbitrage. Production companies must identify eligible production profits. Qualified service centres must satisfy group, revenue, activity and transfer conditions. Multinational groups must model the interaction with transfer pricing, withholding taxes, controlled-foreign-company rules, permanent-establishment risk and the global minimum-tax framework.

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Law No. 7582 is an important development in Turkey’s tax and investment landscape. It gives Turkey a more prominent place in discussions on residence planning, high-net-worth relocation, asset regularisation, technology incentives, manufacturing investment and multinational service-centre structuring. For some clients, the new rules may be commercially significant and may justify a detailed feasibility review.

The principal professional lesson is that the reform should be used carefully and documented properly. The headline incentives are attractive, but their value will depend on eligibility, evidence, banking execution, foreign-tax interaction and administrative guidance. For internationally mobile individuals, business owners and investors, the most robust approach is to treat Turkish relocation or investment planning as a coordinated legal, tax, accounting, banking and compliance exercise from the outset.

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Frequently asked questions

# What is Turkey Law No. 7582?

Turkey Law No. 7582 is a tax and investment reform package published in the Official Gazette on 4 June 2026. It introduces measures concerning foreign-source income for qualifying new residents, inheritance tax, asset disclosure, technology start-ups, production activity and qualified service centres.

# Does Law No. 7582 make Turkey tax-free for new residents?

No. The reform introduces a specific exemption for certain foreign-source income and gains of qualifying individuals. Turkish-source income, eligibility conditions, prior residence history, foreign-tax exposure and documentation requirements must still be reviewed.

# Who may benefit from the 20-year foreign-income exemption?

The measure is aimed at individuals who become settled in Turkey and who did not have Turkish residence or Turkish tax liability during the preceding three calendar years, subject to the detailed statutory and administrative requirements.

# What assets can be disclosed under the asset-disclosure mechanism?

The article refers to money, gold, foreign currency, securities and other capital-market instruments held abroad, and certain assets held in Turkey but not recorded in statutory books. The practical effect depends on the applicable disclosure timing, holding commitment and implementing guidance.

# What corporate incentives are introduced by Law No. 7582?

The reform includes a reduced corporate tax rate for eligible production and agricultural production activities, enhanced employee share incentive treatment for qualifying technology start-ups, and a qualified service centre regime for certain multinational group support activities.

# What should advisers check before relying on the reform?

Advisers should check eligibility, residence history, income source, former-jurisdiction tax exposure, source of funds, banking requirements, AML and sanctions issues, transfer pricing, substance and any Turkish implementing communiques or administrative guidance in force at the time of advice.