Turkey Startup Incentives 2026: What Law No. 7582 Changes for Tech Startups

Turkey startup incentives took a significant step forward in 2026. Law No. 7582 Amending Certain Laws was adopted by the Turkish Grand National Assembly on 21 May 2026 and published in the Official Gazette No. 33270 of 4 June 2026. Public attention focused mostly on its asset amnesty provisions, yet the law also contains a package of structural changes that directly affect technology startups, their founders, their employees and the investors who fund them.

This guide looks at the new Turkey startup incentives from the perspective of an international reader: a foreign venture capital fund considering a Turkish deal, a founder thinking about relocating to Turkey, or a technology group weighing Istanbul as a regional hub. A Turkish-language version, Teknogirişimlere 2026’da Neler Değişti?, is also available.

Convertible Notes Finally Have a Legal Basis in Turkey

For years, the main structural obstacle for foreign investors in Turkish startups was the absence of a workable convertible instrument. Convertible notes and SAFE-style agreements are standard tools of early-stage financing worldwide, but under Turkish Commercial Code No. 6102 they collided with the rigid rules on conditional capital increases. Many foreign VC funds and angel investors either stayed away or required founders to set up an offshore holding company before investing.

Article 11 of Law No. 7582 addresses this directly. Non-public companies holding a technology startup badge (teknogirişim rozeti) issued by the Ministry of Industry and Technology are now exempt from the relevant provisions of the Turkish Commercial Code for conditional capital increases based on convertible loan agreements. The detailed procedures will be set by the Ministry of Industry and Technology after consulting the Ministry of Trade.

For foreign investors, this may be the most important of the new Turkey startup incentives. Badge-holding startups can now raise early-stage capital through a structure close to international market practice, which may remove much of the pressure to move the operating company offshore. Secondary legislation has not yet been published, so the precise mechanics of conversion, registration and investor protection remain to be seen. We discuss the instrument itself in more detail in Startup Law 1: Convertible Note.

A Broader Tax Exemption for Employee Share Plans

Employee stock ownership plans are one of the most effective tools a startup has to attract and retain talent. Article 3 of Law No. 7582, one of the most practical Turkey startup incentives in the package, amends Article 17 of the Income Tax Law No. 193 to make these plans considerably more attractive for employees of technology startups.

Under the 2024 regime, shares granted free of charge or at a discount by a technology startup were exempt from income tax only up to the amount of the employee’s annual gross salary. The new law doubles that ceiling to twice the annual gross salary.

The holding periods required to keep the exemption have also been shortened. If the shares are disposed of within the first two years, the full amount of the untaxed income is clawed back. Disposal in the third or fourth year triggers a 75 percent clawback, disposal in the fifth or sixth year a 25 percent clawback, and there is no clawback after six years. Under the previous rules, the corresponding thresholds were three, four to six and seven to twelve years. Employees can therefore reach the full tax benefit much sooner, which makes equity packages more competitive against cash compensation.

Turkey Startup Incentives for Relocating Founders

One of the most notable measures for the international ecosystem is the new Article 20/D of the Income Tax Law. Individuals who become tax resident in Turkey, and who had neither a residence nor a tax liability in Turkey during the three calendar years preceding their move, will be exempt from income tax on their foreign-source earnings and income for 20 years. The exemption applies to individuals deemed resident in Turkey from 1 January 2026 onwards. The law also sets a reduced inheritance and gift tax rate of 1 percent for qualifying individuals during the same period.

For founders of Turkish origin who have built their careers abroad, and for foreign founders considering Turkey as a base, this is one of the strongest Turkey startup incentives in the law. A founder who relocates to Istanbul to build a regional company can keep income from foreign investments and foreign sources outside the Turkish tax net for two decades. As with any residence-based exemption, the details of the individual’s tax position in the country of departure should be reviewed before the move.

Exemption from Chamber Fees for Digital Companies

Turkey startup incentives also include a modest but concrete cost advantage at the earliest stage. Companies qualifying as a Digital Company, as defined by the Ministry and established by entrepreneurs who have been accepted as incubation entrepreneurs under Technology Development Zones Law No. 4691, are exempt from the chamber registration fee at incorporation and from annual chamber dues for up to three years from the date of incorporation.

Qualified Service Centres: A New Structure for Technology Groups

Law No. 7582 adds Additional Article 1 to Foreign Direct Investment Law No. 4875 and introduces the concept of a Qualified Service Centre. Capital companies established to provide services to international groups active in at least three different countries, and that generate at least 80 percent of their annual revenue from abroad, can benefit from this status. Eligible services include digital transformation and technology consultancy, research and development coordination, software testing and data analytics.

For technology groups, this is where Turkey startup incentives become most significant. Salaries of qualified service personnel benefit from an income tax exemption of up to three times the gross minimum wage, rising to five times for centres operating in the Istanbul Financial Centre. In addition, 95 percent of earnings derived from abroad can be deducted from the corporate tax base, rising to 100 percent for participants in the Istanbul Financial Centre. For a technology group that serves global markets from Turkey, this structure can become a meaningful tax planning tool. Our guide to entering the Turkish market explains how such an entity fits among the available corporate structures.

What Law No. 7582 Means for Foreign Investors and Founders

Taken together, these Turkey startup incentives reinforce each other. The legal basis for convertible notes makes it easier for foreign investors to fund Turkish companies directly. The expanded share plan exemption helps startups keep qualified staff. The 20-year exemption on foreign income makes Turkey a credible place for global founders to live and build, and the Qualified Service Centre regime gives technology groups a reason to locate service functions in the country.

Much of the framework behind these Turkey startup incentives still depends on secondary legislation. The criteria for the technology startup badge, the structure of convertible loan agreements and the scope of the Digital Company definition will become clearer over the coming months. Investors negotiating a Turkish deal today should draft their documents with that uncertainty in mind, for example by providing for a fallback structure if the badge-based exemption is not available on closing. Shareholder arrangements remain equally important, and our article on the shareholders agreement in Turkey covers the key clauses.

Frequently Asked Questions

Does every Turkish startup benefit from the convertible note regime?

No. The exemption applies only to non-public companies holding the technology startup badge issued by the Ministry of Industry and Technology.

Who qualifies for the 20-year income tax exemption?

Individuals who become resident in Turkey from 1 January 2026 and who had no Turkish residence or tax liability during the previous three calendar years. The exemption covers foreign-source earnings and income, not income generated in Turkey.

Which Turkey startup incentives matter most for foreign investors?

The convertible note regime and the Qualified Service Centre status are the most relevant for foreign investors and technology groups, while the 20-year income tax exemption is aimed at individuals relocating to Turkey.

How KYO Legal Can Help

KYO Legal advises founders, technology startups and international investors on financing rounds, employee share plans and corporate structuring in Turkey. Learn more about our venture capital and start-up law practice or contact us for an assessment of how the Turkey startup incentives under Law No. 7582 apply to your company. The official text of the law is available on mevzuat.gov.tr.

This article is for general information only and does not constitute legal advice. Please seek specific advice for your situation.