Executing an app business in Turkey can be challenging, and the lack of foreign investment is a clear sign of the difficulties. However, when it comes to the gaming industry, Turkey offers significant advantages and support. These benefits can outweigh the challenges, helping game companies achieve sustainability and potentially grow into million or even billion-dollar businesses.
In this article, we will explore these benefits and present a guide for game entrepreneurs to navigate the business environment in Turkey. This guide is built on practical knowledge and experience rather than theoretical advice. If you can’t find answers that fit your app business, feel free to reach out to us via message or email with your specific questions.
This guide will cover four main areas:
- The right time and legal structure to establish your company
- Choosing between Technoparks and Free Zones
- How to handle and minimize tax on expenses
- How to get refunds on your expenses through government incentives
- How to optimize tax on your revenue streams and take advantage of exemptions
1. Should I Start a Company Now? Legal Considerations
If you have already started developing your product and have at least two partners, it is generally advisable to establish a company in the early or middle stages of development. If you expect to raise investment in the future, forming a joint-stock company (JSC) is usually the most practical route because of Turkish tax and corporate law considerations. If you are a solo founder, you may postpone incorporation until you are closer to launch.
A few key points should be kept in mind.
First, because of the incentives available in Turkey, it is often financially inefficient to establish the operating company abroad from the outset. Many foreign-owned businesses publish their games or apps through Turkish subsidiaries in order to benefit from these support mechanisms.
Second, if you are concerned about legal structuring or plan to seek foreign investment later, it may be useful to establish a parent company abroad and keep the Turkish company as a wholly owned subsidiary. It is usually more tax-efficient to complete this kind of restructuring early.
Third, if you are planning to start advertising within the next six months, acquiring a dormant company instead of establishing a new one may provide a timing advantage. This can make it easier to access certain cash incentives for marketing expenses.
Finally, if your business has multiple founders, you should prepare a Shareholders’ Agreement (SHA) at an early stage. It is also wise to consider employee stock option arrangements if you plan to attract key talent. In practice, companies should also register under the correct NACE code, such as 62.01, to remain eligible for many technology-related support programs.
2. Should I Establish My Company in a Technopark or Free Zone?
In Turkey, high tax and social security costs can partly be mitigated through incentive schemes available to technology companies. Depending on your structure and business model, you may benefit from tax exemptions and other advantages by operating from a Technopark, a Free Zone, a TEKMER, or an approved R&D or design center.
That said, these options are not automatically the right choice for every startup.
If your company is unlikely to be highly profitable in its first year and you expect to employ fewer than five people, these structures may not justify the administrative burden. Reporting obligations, project tracking requirements, tax compliance, and operational formalities can all become quite demanding. Some incubators may initially appear affordable, but they sometimes require equity-linked arrangements that may become costly in the long term.
If you do not expect to grow beyond five employees in the near future, it may be more practical to avoid these structures at the beginning. If you expect rapid growth, however, establishing a base in a Technopark or Free Zone may become worthwhile. If suitable space is not immediately available, opening a branch later can also be considered.
At present, establishing a formal R&D or design center is usually not the most practical option for early-stage game startups because of bureaucracy and operational limitations
Comparison of Technoparks and Free Zones:
Here’s a link to a detailed comparison.
Currently, establishing an R&D or design center may not be the best fit for game startups due to bureaucracy and other limitations.
3. What Are the Tax Implications for My Expenses?
The gaming and mobile app business in Turkey are highly dependent on imported services. You’ll need to pay for advertising networks, servers, and various software tools (e.g., Unity, Atlassian, Figma). Unfortunately, the government tends to pass the tax burden of these services onto startups.
The most significant expense will be advertising. When you advertise internationally (assuming your games are sold via platforms like App Store, Play Store, Steam, etc.), no VAT or withholding tax (WHT) is applied since the service is provided outside of Turkey. While paying extra taxes might make you feel patriotic, it will drastically slow down your growth. Unfortunately, we often see accountants misguiding companies in this regard.
Read more about mobile app tax obligations here:
https://www.finahukuk.com/mobil-uygulama-vergisi/
When purchasing certain software tools for development, VAT may apply (known as VAT2). Whether you need to pay VAT2 depends on your accountant’s knowledge of these tools. It’s worth hiring an experienced accountant to handle this.
4. How Can We Finance Our Expenses with Government Support?
In practice, direct project funding for game development is difficult to obtain through institutions such as TÜBİTAK or KOSGEB, because games are often not treated as innovation projects in the way startups expect. If, however, you are developing a separate underlying technology, such as infrastructure or a technical platform that supports your game, you may consider TÜBİTAK’s 1507 or 1501 programs depending on your company’s size and profile.
For most self-publishing app or game businesses, the more relevant route is the support offered by the Turkish Ministry of Trade.
These support schemes can cover a significant portion of digital marketing expenses, app store commissions, and certain software or analytics tools used for international growth. In practice, support may extend to tools such as Adjust, AppsFlyer, Sensor Tower, and similar products, provided the legal and documentary requirements are properly met. A meaningful portion of software-related costs and, in some cases, other eligible operational expenses may also be reimbursed.
Importantly, foreign ownership of the company is not, by itself, a barrier. What matters is whether the Turkish entity, structure, payment flow, and documentation comply with the program requirements.
5. Not in a Technopark? How to Benefit from the 4% Corporate Tax for App Business in Turkey?
If this question matters to you, it probably means your business is already generating revenue or is close to doing so.
In Turkey, software exporters may benefit from significant corporate tax advantages even if they are not based in a Technopark or another tax-exempt zone. Under the current structure, qualifying software export income may benefit from an 80% corporate tax exemption. In practical terms, this can reduce the effective corporate tax burden to a very low level.
This tax treatment may apply to revenue generated from in-app purchases and subscriptions. Advertising income, however, is generally treated differently and should be assessed separately. Since the revenue is derived from international sales, VAT consequences must also be analyzed in light of export-of-services rules.
As a result, even a small app company or a one-person software business may benefit from substantial tax advantages in Turkey without being located in a Technopark.
Conclusion
In many jurisdictions, the combined burden of corporate tax, payroll costs, and social security can become a major obstacle for app startups. Turkey, however, currently offers a rare combination of cash incentives and tax advantages for mobile app and game businesses targeting international markets.
Many founders assume that these benefits are either inaccessible or too bureaucratic to use in practice. That assumption is often based on incomplete or outdated information. With the right structure, correct documentation, and proper timing, these incentives can become a real financial advantage.
If you are building an app or game business and want to understand the legal, tax, and incentive framework in Turkey, professional guidance can save both time and money. That allows founders to focus on what matters most: building and growing the product