How can you protect capital and reduce your tax burden using Turkey’s new rules?

Turkey is opening up new opportunities for international investors, business owners, and private capital. In 2026, the country introduced a series of tax changes aimed at attracting foreign assets, fostering the growth of international companies, and creating a more favorable investment climate. Of particular note are the new rules regarding capital repatriation, tax incentives for foreign-sourced income, and special regimes for international business. However, effectively leveraging these opportunities requires proper legal structuring. It is essential not only to minimize taxes but also to ensure the transparency of the origin of funds, the legality of transactions, and the protection of assets.

One of the most significant developments in 2026 is the Asset Repatriation Program. This program allows individuals and legal entities to declare specific assets—including cash, gold, foreign currency, and securities—under a special set of tax rules.

As a general rule, the tax rate on declared assets is 5%. However, if the funds are invested in designated financial instruments for a specified period, this rate may be reduced:

• 4% — if the investment is held for at least one year;
• 3% — for at least two years;
• 2% — for at least three years;
• 1% — for at least four years;
• 0% — for at least five years.

For declarations submitted on or after January 1, 2027, these rates will increase by 0.5 percentage points. The program remains in effect until July 31, 2027, unless the timeframe is altered by legislation. Provided that the established conditions are met, it also offers protection against certain tax audits regarding the declared assets. At the same time, this mechanism does not serve as a means to legalize funds of illicit origin, nor does it waive financial monitoring requirements. Another significant change concerns individuals who relocate to Turkey and become tax residents there. The new legislation allows for the exemption of certain types of foreign-sourced income from Turkish income tax for a period of up to 20 years.

One of the key conditions is that the individual must not have been a Turkish tax resident during the three calendar years preceding their relocation. For international entrepreneurs and investors, this can serve as a valuable tax planning tool. However, it is essential to consider the nature of the income, the rules for determining tax residency, and any tax obligations in other jurisdictions. Simply obtaining a Turkish residence permit or citizenship does not automatically trigger eligibility for this benefit.

In 2026, Turkey also expanded tax incentives for companies that hold stakes in foreign businesses. Specifically, for certain dividends received from foreign subsidiaries, the portion of income exempt from corporate tax has been increased from 50% to 80%, subject to compliance with statutory requirements. This may make Turkish companies a more attractive option for structuring international investments and receiving dividends from overseas assets. At the same time, establishing a holding company in Turkey does not automatically exempt all foreign-sourced income from taxation. Factors such as the ownership structure, the nature of the income, Controlled Foreign Company (CFC) rules, and international tax treaties must be taken into account.

Specific benefits are available to companies that establish international management and business service centers in Turkey. The "Qualified Service Center" regime allows eligible companies to reduce their corporate tax base by 95% of their qualified foreign-sourced profits. For companies meeting specific operational criteria within the Istanbul Financial Center or designated industrial zones, this deduction can reach 100%. This regime may be attractive to international groups planning to base management, coordination, and support functions in Turkey.

However, these incentives are contingent upon meeting established criteria, including requirements related to international operations, income composition, and other conditions. Tax optimization is merely one component of asset protection. For an international investor, it is equally important to properly determine the capital ownership structure and assess the legal risks associated with the movement of assets.

Before utilizing these new Turkish regulations, it is necessary to evaluate the following:

• Tax residency: Identify the countries where the investor has tax obligations and determine whether double taxation might arise.
• Source of funds: Determine what documentation is required for banking compliance checks and to verify the legitimacy of the assets.
• Ownership structure: Assess whether it is more appropriate to utilize personal ownership, a holding company, or another corporate model. Conditions for tax incentives. Deadlines, restrictions, and investment obligations that must be met.
• Future use of assets. How dividends, investment income, the sale of assets, or the transfer of funds abroad will be taxed.
• Turkey’s new tax regulations create additional opportunities for international investors and business owners.

An asset repatriation program, tax relief on foreign-sourced income, and special regimes for international companies can serve as effective tools for capital management. Are you planning to move capital to Turkey, establish.

Looking to establish an international company or take advantage of new tax incentives? Turn to Antwort Law! Our lawyers will help analyze your situation, identify available tax mechanisms, select the optimal asset ownership structure, and guide you through the necessary legal procedures.

Contact Antwort Law to develop a tailored strategy for capital protection and lawful tax optimization.

Lidia Ivanova

International lawyer
Antwort Law