Turkey is preparing a major fiscal incentive package that could grant foreign residents a 20-year exemption from tax on overseas income and capital gains, in a move aimed at attracting global wealth and investment. The proposal, announced by President Recep Tayyip Erdoğan, is part of a broader strategy to position the country as a leading international financial and investment hub.
Zero Tax on Foreign Income for Two Decades
Under the proposed framework, individuals who have not been tax residents in Turkey for at least three years would be eligible for the scheme. Qualifying individuals would pay no Turkish tax on foreign-source income for 20 years, with only locally earned income subject to domestic taxation.
The package also includes reduced inheritance taxes and gift taxes for eligible individuals, with rates potentially set at a flat 1%, significantly lower than current progressive rates in the country.
Longer and More Competitive Than European Schemes
Turkey’s proposal would offer one of the most generous tax regimes globally. Comparable programmes in countries such as Italy and Greece typically last around 15 years, while Portugal’s updated system offers approximately 10 years of benefits.
Unlike many European schemes, which require annual lump-sum tax payments, Turkey’s proposal would not impose a flat charge on foreign income, further strengthening its competitiveness.
Boost for Citizenship by Investment Programme
The proposed tax exemption could significantly increase the appeal of Turkey’s Citizenship by Investment Programme. Currently, tax residents in Turkey are subject to progressive income tax rates on worldwide income. If implemented, the new regime would remove this exposure for qualifying individuals, adding a strong fiscal incentive for investors considering relocation.
Additional Corporate Tax Incentives Included
The package also introduces corporate tax reductions aimed at boosting exports and international business activity. Manufacturing exporters could see tax rates reduced from 25% to 9%, while other exporting companies may benefit from rates of 14%.
Companies operating within the Istanbul Finance Center could benefit from full tax exemptions on transit trade income, while firms outside the centre may receive up to 95% exemptions on similar activities.
Strategic Timing Amid Regional Shifts
The announcement comes amid shifting regional dynamics, with Turkey seeking to attract capital flows as businesses reassess their presence in other Middle Eastern hubs following the Iran War.
Officials believe geopolitical instability in parts of the Gulf region is creating an opportunity for Turkey to reposition itself as a stable and attractive base for international companies and high-net-worth individuals.
Ambition to Become a Global Financial Hub
The initiative forms part of a wider effort to elevate Turkey’s position in global finance. While cities like Dubai and Abu Dhabi currently rank higher as financial centres, policymakers aim to close the gap through regulatory reforms, tax incentives and infrastructure development.
The proposal still requires parliamentary approval, and further details are expected once the full legislative package is submitted. If implemented, the 20-year tax exemption could mark a significant shift in Turkey’s investment landscape.
Cameron Deggin 
Founder & CEO, Property Turkey
Cameron Deggin is Founder and CEO of Property Turkey. A former finance professional and FCCA-qualified accountant, he founded the company in 2001 after recognising Turkey’s investment potential. With more than two decades analysing Turkish real estate, Cameron regularly advises international investors and is quoted by media including the Financial Times and BBC.
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