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December 21, 2023

About the Overall Evaluation of Istanbul Financial Center Law and Istanbul Finance Center Regulation


The Istanbul Financial Center Law (“Law”), it is aimed to increase the financial competitiveness of the Republic of Turkey in the international arena, contribute to the development and deepening of financial markets and products and services, strengthen integration with international finance and capital markets, adapt to the innovations in the financial markets in line with technological developments, to enable foreign credit institutions or financial institutions and organizations and other real and legal persons to manage their activities in the countries of the region domestically and make the Istanbul Finance Center (“IFC”) one of the leading global financial centers. 

The Law regulates the provisions on the field, management, and operation of the IFC and the activities carried out within the scope of the IFC, and primarily discounts, exemptions, other tax advantages, and some conveniences are envisaged primarily for companies holding a participant certificate. In this context, since IFC aims to unite a wide range of financial institutions and organizations such as banks, capital markets institutions, participation finance companies, financial investment and portfolio management companies, and insurance companies in a single location; incentives are provided by adopting sustainable and participatory approaches to all financial services, especially in the field of international trade.

As well as focusing on strategic sub-sectors such as banking, insurance, green finance, financial technologies, and participation finance within the scope of IFC; it is intended to be supported portfolio management, wealth management, project finance, fund management, and reinsurance companies operating in the international financial services sector line with the best practice examples in the world. In addition, to support financial services activities to be carried out at IFC, it is aimed to create a wide ecosystem across the region, together with consultancy, IT, telecommunications, and financial technology companies.


By referring to the relevant legislative provisions with Article 2 of the Law; It is regulated that securities, derivative instruments, payment systems, electronic money, and similar activities, services, and transactions under banking, capital markets, insurance, financial leasing, factoring, and similar markets can be carried out as financial activities in IFC-Istanbul. Financial activities and persons engaged in financial activities within the scope of the law are listed in TABLE-1 below. It should be emphasized that simply being one of the relevant persons within the scope of TABLE-1 will not be sufficient to operate as a participant in IFC-Istanbul. It is stipulated in Article 3 of the Law that financial institutions can operate in IFC-Istanbul with a “participant certificate” to be issued by the Presidency Finance Office (“Finance Office”). The criteria that will form the basis for the issuance of the participant certificate are determined in Istanbul Financial Center Regulation (“IFC Regulation”) published in the Official Gazette dated 7 July 2023 and numbered 32241 and are explained in detail in the following sections.


Activities, services, and transactions specified under Law No. 1567 on the Protection of the Value of Turkish Currency
  • Persons who purchase and sell foreign exchange, coins, shares, bonds, precious metals, precious stones, and all kinds of goods and assets made of or containing them, and all kinds of instruments and documents that are used to provide commercial papers and payments.
Activities, services, and transactions specified under the Private Pension Savings and Investment System Law No. 4632
  • Pension companies licensed in the pension branch established by Law No. 4632 to operate in the private pension system 
  • Retirement Mutual Funds
Activities, services, and transactions specified under Banking Law No. 5411
  • Deposit banks established in Turkey
  • Participation banks
  • Development and investment banks and branches of such establishments established abroad in Turkey
  • Financial holding companies
  • Banks Association of Turkey
  • Turkish Participation Banks Association
  • Banking Regulation and Supervision Agency
  • Savings Deposit Insurance Fund
Activities, services, and transactions specified under Law No. 5464 on Bank Cards and Credit Cards
  • Organizations that establish a bank or credit card system, issue cards, and sign merchant agreements
Activities, services, and transactions specified under Insurance Law No. 5684
  • Operating in Turkey;
  • Insurance companies
  • Reinsurance companies
  • Association of Insurance, Reinsurance, and Pension Companies of Turkey
Activities, services, and transactions specified under Law No. 6361 on Financial Leasing, Factoring, Financing, and Savings Finance Companies
  • Established in Turkey;
  • Financial leasing companies
  • Factoring companies, 
  • Financing companies,
  • Savings finance companies
  • Banks
  • Participation banks
  • Development and investment banks
Activities, services, and transactions specified under the Capital Markets Law No. 6362
  • Those who issue capital market instruments and offer them to the public;
  • Publicly traded companies,
  • Portfolio management companies,
  • Investment partnerships,
  •  Other companies engaged in capital market activities
  • Capital market institutions
  • Operators of organized markets where capital market instruments are traded.
  • Turkish Capital Markets Association
  • Association of Valuation Experts of Turkey
  • Central clearing houses 
  • Central depository institutions 
  • Central Registry Agency 
  • Capital Markets Board
Activities, services, and transactions specified under Law No. 6493 on Payment and Securities Settlement Systems, Payment Services, and Electronic Money Institutions
  • Legal entities (payment institutions) authorized to provide and perform payment services
  • Legal entities authorized to issue electronic money (electronic money institutions)

It should be stated that, within the scope of the Law, not only legal entities engaged in financial activities but also branches, liaison offices, representative offices, and national wealth funds of legal entities are considered financial institutions.


All kinds of financial activities permitted or not prohibited by the relevant legislation such as deposit acceptance, participation fund acceptance, cash and non-cash lending transactions of all types and forms, custody services, factoring and forfeiting transactions, financial leasing transactions, insurance, portfolio management, investment consultancy, issuance of debt instruments related to capital markets, crowdfunding, project financing can be carried out by the participants.

First of all, the area where the activities will be carried out within the scope of the Law has been determined as IFC; In IFC, it is regulated that all kinds of works and transactions, including the operation and management of the infrastructure and superstructure, and the renting of independent sections and areas, will be carried out by the “managing company” for 20 years. The managing company will be established as a joint-stock company by the Turkey Wealth Fund to use the duties and authorities given under the Law and will operate subject to the provisions of private law. With the arrangement made, services such as energy, security, cleaning, waste management, transportation, parking, landscaping, promotion, rental, maintenance, and repair are carried out uniformly and uninterruptedly; In this way, it is aimed to ensure managerial efficiency, to provide support to the participants regarding all infrastructure and superstructure, and to reduce management and operating costs.

In this context, it should be noted that; IFC has been designed as two different sections, the office area where financial institutions will operate, and the out-of-scope area, which includes commercial and social units where employees will meet their daily needs.

A. Office Area 

Real and legal persons and their branches and representatives, ordinary partnerships, liaison offices, regional management centers, and national wealth funds are required to obtain a participant certificate to operate in the office area, which consists of independent sections designated according to the purpose of use within the boundaries of IFC.  The participant certificate can be issued in different types and qualities according to the activities to be carried out by the participants. Thanks to the distinctive feature of the participant certificate, it is aimed to create a qualified financial ecosystem and human resources in the region.

B. Out of Scope Area

Discounts, exceptions, and conveniences designed for structures that will carry out financial activities will not be applied to businesses that will be located in an area outside the scope where they can meet the daily needs of the personnel who will work at IFC and the visitors.

C. One-Stop Bureau

A one-stop bureau will be established to facilitate the permit, license, license, and similar approval application processes regarding the activities and employees of the participants, and to quickly monitor the works and transactions from a single source. 

It has been determined in Article 17 of the IFC Regulation that the one-stop bureau is to be formed from representatives of the following institutions:

  • Ministry of Labor and Social Security 
  • Ministry of Environment, Urbanization and Climate Change
  • Ministry of Treasury and Finance 
  • Ministry of the Interior 
  • Ministry of Trade
  • If deemed necessary by the above-mentioned ministries, the relevant institutions of the ministries and 
  • Municipality of Ümraniye

For the management of the one-stop bureau, the Finance Office has been authorized. In this light, while the main services in the one-stop bureau are to be provided by the related institutions, the management of the operational processes of the one-stop bureau is entrusted to the Finance Office. It has been foreseen that the Finance Office will provide information and education services to the IFC stakeholders consisting of participant candidates, participants, and employees of the participants, determine other services required by the mentioned stakeholders through periodical evaluations, and take the necessary initiatives to provide these services.


A. Tax Exemption, Reduction, and Immunity

  • Regarding financial services export;

To begin with, it shall be noted that financial services provided by financial institutions to non-residents by obtaining a participant certificate within the scope of the law will be considered financial service exports, provided that the service is ultimately utilized abroad. However, derivative transactions carried out by financial institutions on their behalf and account, buying or selling assets for their portfolios, and activities that bring the savings of residents abroad are not included in the scope of export of financial services.

  • Corporation Tax:
  • Activities in the nature of Financial Services Export

It is regulated that 75% of the earnings obtained within the scope of activities in the nature of financial service export will be deducted from the corporate income in the determination of the corporate tax base, provided that it is separately shown on the corporate tax return. In this context, it should be added that in order to make IFC competitive on a global scale and to encourage moving to IFC, the exemption rate will be applied as 100% for corporate earnings for the taxation period of 2022 to 2031. The mentioned period covers the accounting periods starting within the relevant years for the institutions designated as special accounting periods.

  • Activities within the Scope of Transit Trade

In addition to the activities in the nature of financial services export; the participants who are operating in the Istanbul Finance Center Zone with a participant certificate in accordance with the provisions of the Law, can deduct the 50% of the revenue generated from the sale of goods purchased from abroad without bringing them to Turkey or intermediating in the purchase and sale of goods abroad, with the condition that these activities stay within the scope of the participant’s activities conducted in IFC-İstanbul.

Revenue generated from the sale of goods purchased abroad without bringing them to Turkey or from the intermediation in the purchase and sale of goods abroad must be included in the corporate income in the period in which they are obtained, and the discount will not be utilised for the part of these revenue that are not transferred to Turkey until the end of the filing period of the corporate tax return. Revenue that are not transferred to Turkey within this period will not be eligible for the aforementioned deduction even if they are transferred to Turkey in the following years.

  • Banking and Insurance Transactions Tax:

Transactions in the nature of financial service exports and money received in favour of these transactions are exempt from banking and insurance transactions tax. In terms of financial institutions, banking, and insurance transactions tax increase the intermediation costs as it is a transaction cost element. Accordingly, in order to reduce the operating costs of the participants and to ensure their competitiveness, only the activities within the scope of financial services export and the money received in favour of these activities are exempted from the tax on banking and insurance transactions.

  • Stamp Duty and Fees

Transactions related to financial service activities are exempt from all kinds of fees, and papers issued regarding these transactions are exempt from stamp duty.

It should be noted that the financial activity fees required to be collected from the headquarters and branches of the financial institutions in IFC, which have obtained the participation certificate, in accordance with the Act of Fees Law No. 492, will not be collected for 5 years from the effective date of this law; In addition, accrued fees as of the effective date of the law will not be cancelled and the collected ones will not be refunded.

  • Regarding the employees;

The actual net value of the monthly wage paid to the personnel employed by financial institutions that have obtained a participant certificate and who did not work in Turkey in the last three years before starting to work; 60% of those who have at least five years of professional experience abroad and 80% of those who have at least ten years of professional experience abroad will be exempted from income tax. Thus, it is aimed that IFC becomes a center of attraction for the qualified human resources that will come from abroad and are expected to create added value in their field.

  • Regarding leasing of immovables;

Transactions regarding the leasing of immovables in IFC are exempt from all kinds of fees and the documents issued regarding these transactions are exempt from stamp duty.

  • Participants Operating in At least Three Countries

Exceptions and exemptions regarding i. Regarding the financial service exports, ii. Regarding the employees and iii. Regarding the leasing of immovables, among the international companies that provide certain operational functions through the treasury and regional management offices by focusing some of their units, it is foreseen to be implemented in terms of the activities of the regional treasury and financial management centers of the participants operating in at least three countries.

B. Facilitation of Adaptation to International Markets:

As it is known, in the Presidential Decree dated 12.09.2018 and numbered 85 and the Decision No. 32 on the Protection of the Value of Turkish Currency published in the Official Gazette dated 13.09.2018, the contract value and other payment obligations in certain types of contracts to be concluded between themselves in foreign currency. Some regulations have been made regarding the fact that it cannot be determined in denominated or foreign currency indexed. However, in accordance with this Law; It is stated that the Ministry of Treasury and Finance is authorized to make regulations so that the participants operating in IFC can keep and issue books and documents in foreign currency, regardless of the provisions of the Tax Procedure Law No. 213 and the Turkish Commercial Code No. 6102.

In addition, the participants are exempted from the obligation to use Turkish in all kinds of transactions, accounts, documents, and books that they are obliged to keep for the services they perform and carry out among themselves and at IFC. With the provision of these regulations, participants operating in IFC are provided with the freedom to keep records in a foreign language required by international organizations.

In addition, organizations that have obtained a participant certificate are also allowed to freely choose their preferred law in all kinds of transactions and contracts subject to private law within the scope of their activities at IFC, provided that they do not contradict the provisions of the legislation to which the relevant participants are subject.

It should be emphasized that; only the participants and the regional treasury and financial management centers of the participants actively operating in at least three countries will be able to benefit from these regulations, which are considered within the scope of harmonization with international markets.

C. Benefits of IFC in terms of Labor Law

In accordance with the International Labor Law No. 6735, which regulates the procedures and principles to be followed in the work and transactions regarding work permits and work permit exemptions to be granted to foreigners, it is prohibited to work or be employed in Turkey without a work permit, but exceptional cases where a work permit can be issued are also regulated.

Within the scope of the IFC, in order to facilitate access to qualified international human resources, the Law stipulates that the regional treasury and financial management centers of the participants that will operate in the IFC and the participants actively operating in at least 3 countries can employ foreign nationals with work permits and that work permit applications to be made within this scope will be considered as one of the exceptional cases listed in the International Labor Law.


As explained above, it is obligatory to obtain a participant certificate in order to operate in the IFC office area.

Participant certificate applications will be made to the Finance Office by filling in the application form and uploading the requested documents through the IFC portal to be established. However, the documents that should be included in the participant certificate applications are not explicitly listed in the IFC Regulation and it is foreseen that the relevant documents will be determined by the Finance Office.

The matters to be taken into consideration in the process of evaluation of the applications are regulated in Article 12 of the IFC Regulation. Accordingly, applications for participation certificates will be evaluated by compliance with the applicant’s potential contribution to İstanbul becoming a global financial center and national development plan, medium-term program, annual program, sectoral plans and programs, and through the discretion of the Finance Office. In addition, as will be discussed in detail below, if the office area planned to be used within the scope of the activity is not the property of the participant, the conclusion of the lease agreement for the office area is mandatory for obtaining a participant certificate.

In addition, it is foreseen in the aforementioned article of the IFC Regulation that the participant candidates who carry certain qualifications will be given priority in the applications for the participant certificate. According to this, the applications of the participant candidates operating relating the following fields: 

  • Services and transactions related to financial activities within the scope of IFC Regulation,
  • Commercial services related to commodities subject to international trade, especially precious metals and mines,
  • Support services related to financial activities,
  • Sectors with high added value such as energy, infrastructure, artificial intelligence, health and agricultural technologies,
  • The services provided by the regional units that create the investment and management strategies of legal entities and
  • To green and sustainable financial services

will be given priority in the evaluation process.

It should be noted that since the participant certificate only gives the participant the right to operate in the IFC office area and to benefit from the opportunities regulated in the Law, obtaining a participant certificate does not constitute a tool for the fulfilment of the obligations of the participants such as permits and licenses arising from other regulations such as banking and capital markets legislation regarding the activities to be carried out in the IFC office area. As a matter of fact, as stipulated in Article 11 of the IFC Regulation, the aforementioned obligations regarding the activity must be fulfilled before the application of participant certificate.

The situations in which the participant certificate will be suspended or cancelled are also regulated in the IFC Regulation. Accordingly, in the event that the license, permit or authorization certificate obtained by the participant regarding the activity performed at IFC is suspended, the participant certificate shall be suspended after the relevant institution notifies the Finance Office of this issue. On the other hand, the participant certificate at the occurrence of following cases:

  • Expiration of the participant’s lease agreement for the IFC office area,
  • Cancellation of the license, permit or authorization document obtained by the participant in relation to the activity carried out at IFC,
  • The conditions existing during the participant certificate application are subsequently lost, the commitments made during the application are not fulfilled or it is understood that a false statement has been made in the participant certificate application or
  • Change of participant’s tax identification number

is cancelled. 

It should be noted that although it is obligatory to obtain a participant certificate in order to operate in the IFC office area, a participant certificate will not be issued for those who will operate outside the office area in accordance with Article 13 of the IFC Regulation. Therefore, it is possible to operate within the IFC -but outside the office area- without fulfilling the obligations regarding obtaining a participant certificate. However, in order to operate outside the office area, the immovable to be operated must be leased from TVF İFM Gayrimenkul İnşaat ve Yönetim Anonim Şirketi (“Management Company”) as explained below.


In accordance with the Law and the IFC Regulation, the Managing Company is exclusively authorized in matters related to the lease of independent sections and areas in IFC. In this respect, as stipulated in the second paragraph of Article 9 of the IFC Regulation, all processes regarding the lease of office area and out-of-scope area are carried out by the Management Company, except for the leases to be made by the owners of the immovables and public institutions and organizations in the IFC to their affiliates applying for the participant certificate.

Lease applications for immovable properties in the IFC are made through, and although it varies according to the nature of the applicant, the application to be made by companies mainly requires an activity certificate, trade registry chamber registration declaration, signature declaration, tax plate and tax declaration.

In the event that the participant certificate of the persons operating in the IFC office area is cancelled, the lease agreement will be automatically terminated in accordance with the Article 9/5 of the IFC Regulation.


Within the scope of the Law, sustainable and participatory approaches will be adopted and promoted for all financial services, particularly in the field of international trade. The Law regulates discounts, exemptions and other tax advantages aimed at making the IFC competitive. In addition, mechanisms that will facilitate the use of IFC opportunities by stakeholders, such as a one-stop bureau that will strengthen the attraction center nature of the IFC have been envisaged. With the regulations provided in the Law, facilities are introduced to attract qualified human resources.

While the possibility to benefit from the discounts, exemptions and other tax advantages stipulated in the scope of Law is conditional upon obtaining a participant certificate, exporting financial services and/or performing transit trade, the condition of being in the office area only by obtaining a participant certificate in order to benefit from the regulations for attracting qualified human resources was deemed sufficient. The main matter to be taken as a basis in the evaluation process to be carried out by the Finance Office regarding the acquisition of the participant certificate has been determined as the added value that the participant will provide to IFC, and it has been stated that the participant certificate applications will be evaluated in accordance with these principles.

This Legal Memorandum has been prepared for the purpose of providing information and usefulness, for your information and questions, you can always contact us from the contact information in our letterhead.

Kind Regards,

Kılınç Law & Consulting 


Levent Lezgin Kılınç

Levent Lezgin Kılınç

Founding Partner

Elif Kalebek

Elif Kalebek


Alptekin Dayı

Alptekin Dayı