Türkiye is preparing legislation to expand tax incentives beyond the Istanbul Financial Center (IFC) in a bid to capture business relocating from conflict-affected parts of the Middle East, Bloomberg reported on April 8.
The Treasury and Finance Ministry is drafting a bill that would extend selected advantages currently limited to the IFC across the country. The draft is expected to reach parliament in the coming weeks.
At the centre of the proposal is a tax break already available to IFC-based firms, allowing companies to deduct 50% of income earned from selling or intermediating goods sourced abroad without bringing them into Türkiye.
The push comes as the Iran war drives companies to reconsider their Gulf presence. IFC chief executive Ahmet Ihsan Erdem told Reuters that more than 40 companies, mostly headquartered in East Asia and Gulf countries, had met with the centre over the past month as firms consider partially relocating or expanding operations in Türkiye. Around 15 meetings with prospective companies had already been scheduled before the war.
What it means for travel and business tourism
The implications for Türkiye’s business travel and corporate meetings market are significant. A wave of corporate relocations to Istanbul would drive demand for extended-stay accommodation, serviced apartments, premium hotel stock and conference facilities on the city’s Asian side around the IFC complex.
The IFC site in the Atasehir district includes 1.4mn square metres of office space, a 100,000 square metre shopping centre, a congress centre with capacity for 2,100 people and a 30,000 square metre five-star hotel, all designed within a “smart city” model.
Istanbul’s meetings and events sector has been growing rapidly, with the city already ranking among Europe’s top five destinations for international conferences. A permanent shift of Gulf and Asian financial operations to Istanbul would deepen that pipeline considerably.
The IFC opened three years ago on Istanbul’s Asian side and currently houses the central bank, state-owned lenders and financial regulators. It offers incentives including corporate tax exemptions for the first 10 years. Companies meeting certain criteria can deduct 100% of income from eligible financial activities from their corporate tax base. Individuals who have lived abroad for at least three years can benefit from income tax exemptions of between 60% and 80% depending on professional experience.
Turkish Vice President Cevdet Yilmaz said the government was making “an intensive effort to position Türkiye as a strong regional management centre for multinational companies, transform it into a global hub for transit trade, and turn the Istanbul Finance Centre into one of the world’s leading financial centres.”
The wider opportunity
Türkiye has long positioned itself as a bridge between Europe and the Middle East, but the Iran war has accelerated a structural shift. Dubai, Bahrain and parts of Saudi Arabia have all come under Iranian missile and drone attack since February 28, with the UAE reporting incoming fire as recently as April 8. For risk-averse multinationals, Istanbul offers NATO-member security, a large domestic market and direct air connectivity to both European and Gulf capitals.
The question is whether the ceasefire holds. If the two-week truce agreed on April 7 leads to a lasting settlement at Islamabad talks starting April 10, some firms may opt to stay put in the Gulf. If fighting resumes, the pipeline to Istanbul could accelerate sharply.