Short answer
A free zone is an area that lies within the country's borders but is treated as outside the customs territory. No import duties arise on goods located there. Its main difference from a bonded warehouse is that it allows not only storage but also manufacturing, assembly and trading. Taking goods from a free zone into the domestic market counts as an import, and duty arises at that moment.
What a free zone is
A free zone is an area located within the country’s borders but treated as outside the customs territory. Geographically it is in Türkiye; for customs purposes it is not.
The direct consequence of this is that no import duties arise on goods entering the zone. The goods wait there, are processed, or are re-exported; duty only becomes an issue if they are brought into the domestic market.
Difference from a bonded warehouse
Both suspend duty. The difference lies in what can be done there.
| Bonded warehouse | Free zone | |
|---|---|---|
| Legal nature | A customs regime | An area outside the customs territory |
| Storage | Yes | Yes |
| Handling | Yes (not changing identity) | Yes |
| Manufacturing and assembly | No | Yes |
| Trading | Limited | Yes |
| Duty | Suspended | Suspended |
An operation that would change the goods’ GTİP (tariff code) cannot be carried out in a bonded warehouse. It can be carried out in a free zone — a product can be manufactured there, assembled, or turned into a different product.
What it is used for
Re-export. Goods arriving from a third country are sold on to another country without ever entering the domestic market. No duty ever arises.
Manufacturing and assembly. Inputs are brought in duty-free, the product is manufactured there, and exported.
Regional distribution centre. Shipments to neighbouring countries are managed from a single point; stock sits duty-free.
Value-added processing. Labelling, packaging, kitting, quality control.
A domestic sale is an import
This is the most commonly misunderstood point. Being located in a free zone does not remove the duty, it only defers the moment it arises.
When goods are taken from a free zone into the domestic market, a declaration for release into free circulation is filed, and duties accrue at that moment. The rate, exchange rate and any surveillance threshold are also determined as of that date.
This has a planning consequence: in periods when duty rates are changing, the date of the domestic drawdown directly affects cost.
Who it suits
A free zone does not suit every operation. It pays off when three conditions hold together:
- A high re-export ratio — most of the product is going abroad
- Value-added processing is involved — for storage alone, a bonded warehouse is simpler and generally cheaper
- Cash flow benefits from the duty deferral — stock turns slowly, or the duty burden is high
If the entire product will be sold domestically, the advantage is largely lost; meanwhile zone rent and operating cost are added on top.
Common mistakes
Treating a free zone as a duty exemption. Duty is deferred, not waived.
Overlooking that a domestic sale is an import. The declaration and duty process apply just the same.
Setting up a free zone when a bonded warehouse would suffice. For storage alone, a free zone is needlessly complex and expensive.
Not accounting for in-zone service costs. Rent, handling and operating charges should be weighed against the benefit of the duty deferral.
This page is general information, not legal advice. Regulations change; confirm the current position before acting.