Report: Special Economic Zones
Media: Lufthansa Inflight Magazine
Sector: Trade & Foreign Direct Investment (FDI)
Publication Date: September 2016
ESBAŞ – The Aegean Free Zone
A Model Industrial Park
The Aegean Free Zone has become the partner of choice for more than 170 companies and a competitive location for high-tech industries.
In the short span of little more than 25 years, the Aegean Free Zone has become a recognised address for forward-thinking manufacturing and export processing companies. Located in the district of Gaziemir in İzmir City, which was once a small Turkish village with a population of 10,000 people, the Zone is today home to a cluster of highly respected companies. Operated by private company ESBAŞ, which stands for Aegean Free Zone Development and Operating Company, it has attracted over 170 companies. “We offer foreign enterprises very competitive prices as well as the same high-quality standards of facilities and services that they would expect to receive in their own home countries,” says Dr Faruk Güler, CEO of ESBAŞ. German companies such as PFW, which manufactures and assembles aircraft construction components for Airbus and Boeing, as well as German fashion houses such as Hugo Boss and Roy Robson, have already discovered the advantages of operating in the Aegean Free Zone. Situated at the crossroads of Europe, Caucasia, Africa and the Middle East, the Aegean Free Zone stretches over 2.2 million square metres of land in İzmir, Turkey’s third largest city. The İzmir Adnan Menderes International Airport is just 4 kilometres away and the Port of İzmir, Turkey’s top exporting seaport, 12 kilometres.
A Catalyst for Growth
ESBAŞ has become an engine of economic growth, for the region and for Turkey. “Today, ESBAŞ hosts more foreign direct investment and employs more workers than any of the 18 other free zones in Turkey.” In 2015, the total trade volume generated was US$4 billion. “One third of all investment in Turkey’s free zones reaches the Aegean Free Zone, which provides employment for some 18,200 people,” says Güler. Since ESBAŞ was founded in 1990, the company has focused on attracting high-tech investment, in particular in the aerospace industry. “To facilitate investment, we helped establish an aerospace clustering association, and we will continue our quest to attract more players from this sector on the back of our state-of-the-art infrastructure, our young and low-cost workforce as well as the many financial incentives on offer.”
A Host of Advantages
The Aegean Free Zone provides a unique set of advantages to companies with a manufacturing focus, including two important tax breaks. Manufacturing companies can benefit from a 100% exemption from corporate tax, and if a company exports 85% or more of its production, the company’s employees are exempt from income tax. There are also no stamp taxes, no tariffs and no duties levied on companies operating in the Aegean Free Zone. ESBAŞ also provides all essential business basics such as energy, water, telecommunication, natural gas, loading and unloading services, as well as health and child care facilities.
ESBAŞ’ achievements have not gone unnoticed, and the Turkish Zone has become a role model for the development and operation of special economic zones worldwide. Güler explains that they are regularly contacted to provide consultancy or to be part of new free zone projects all over the world. Expansion lies also at the heart of ESBAŞ’ plans for the future. “We have signed a protocol agreement with the Turkish Ministry of Economy regarding the extension and expansion of the Aegean Free Zone,” says Güler. “This has become our priority project. We need more land because our current capacity has almost been reached, but we are keen to partner with more players.”