Türkiye’s Emerging Tax Regime – Why International Investors and High-Net-Worth Individuals Should Pay Attention

For internationally mobile entrepreneurs, investors, high-net-worth individuals and families, the UAE has become a leading destination for relocation, offering a combination of tax efficiency, a business-friendly environment, global connectivity, year-round sunshine and a well-established expatriate community.

However, the UAE is not the only jurisdiction seeking to attract international wealth and talent. Türkiye is increasingly positioning itself as an interesting alternative, combining strong connections between Europe and Asia, an attractive lifestyle and a new long-term tax incentive for qualifying internationally mobile individuals.

Qualifying individuals who become Turkish tax residents from 1 January 2026 may benefit from a 20-year exemption from Turkish income tax on foreign-source income and gains.

The length of the incentive is particularly notable. At a time when many countries are reviewing or shortening preferential regimes for internationally mobile individuals, Türkiye has introduced a 20-year window.

This raises an interesting question: could Türkiye become a genuine alternative to the UAE for globally mobile individuals who value tax efficiency, connectivity, lifestyle and proximity to Europe?

Türkiye’s new 20-year foreign income exemption

Under the new regime, qualifying individuals can benefit from a 20-year exemption from Turkish tax on foreign-source income and gains.

To qualify, individuals must become Turkish tax residents and must not have been tax resident in Türkiye during the three calendar years immediately before becoming resident.

The distinction between foreign and Turkish source income is important. Turkish source income remains subject to the ordinary Turkish tax rules, while overseas businesses managed from Türkiye will require separate consideration.

There is also a potentially attractive succession planning benefit, with a 1% inheritance tax rate applying to qualifying transfers during the exemption period. The application of this benefit will depend on the individual’s circumstances and should form part of the wider succession planning considerations when moving to Türkiye.

Taken together, these features could make the regime particularly attractive to internationally mobile individuals whose wealth is generated and held outside Türkiye, particularly those looking for a longer-term alternative to the shorter incentives available in other jurisdictions.

Twenty years versus four

The significance of the Turkish regime becomes clearer when compared with the UK’s current rules.

Since 6 April 2025, the UK has operated a four-year Foreign Income and Gains (FIG) regime for qualifying new UK residents. Broadly, an individual must be within their first four years of UK tax residence following at least 10 consecutive tax years of non-UK residence. Where a claim is made, eligible foreign income and gains can benefit from UK tax relief during those four years.

Türkiye’s potential 20-year exemption is therefore five times as long as the UK’s FIG window.

That does not mean Türkiye is automatically more attractive. The regimes have different eligibility requirements. However, the duration of the Turkish incentive is significant and could give internationally mobile individuals considerably more certainty when considering a long-term relocation.

Can Türkiye compete with the UAE?

The UAE has long set the benchmark for internationally mobile individuals seeking tax efficiency, so any new regime inevitably invites the comparison.

The UAE’s appeal is its simplicity. UAE tax residents are generally not subject to personal income tax on employment income, investment returns, or capital gains – a clean, predictable tax environment.

Türkiye takes a more targeted approach, offering significant long-term tax advantages for qualifying individuals.

For those with substantial overseas wealth, the combination of tax efficiency, lifestyle and proximity to Europe could make Türkiye an increasingly attractive alternative to the UAE.

The question isn’t which regime is “better”, it’s which one fits.

The wider appeal of Türkiye

Tax is only one part of the proposition.

Türkiye’s geographical position provides access between Europe, the Middle East and Asia, while cities such as Istanbul offer a developed business environment, international schools, healthcare facilities and a strong cultural offering.

The ongoing development of the Istanbul Financial Center also reflects Türkiye’s ambition to strengthen its position as a regional finance hub.
Lifestyle is also an important factor. Compared with many Western European countries, Türkiye can offer a lower cost of living while still providing access to high-quality housing, restaurants, leisure facilities and coastal living.

Why the UAE remains difficult to challenge

Despite Türkiye’s attractive proposition, the UAE remains one of the most established relocation destinations for wealthy individuals and entrepreneurs.

Over the last two decades, the UAE has developed a complete ecosystem built around international business. It offers:

• world-class infrastructure;
• international schools;
• access to global financial institutions;
• business-friendly free zones;
• excellent connectivity; and
• a large international community.

For business owners, the UAE also provides a mature environment for establishing and scaling international businesses.

That said, the UAE is not entirely free from taxation. The UAE introduced corporate tax in 2023, with businesses generally subject to a 9% corporate tax rate on taxable profits above AED 375,000, subject to available reliefs and exemptions.

Therefore, while individuals may benefit from a highly competitive personal tax environment, corporate structures still require careful planning.

A changing international landscape

Türkiye’s new regime comes at a time when international tax planning is changing rapidly. The UK’s reforms to the former non-domicile regime have prompted many internationally mobile individuals to reassess where they live and how their wealth is structured.

As traditional tax regimes evolve, Türkiye’s 20-year exemption adds another potential option for individuals considering an international relocation.

Our view

Türkiye’s new foreign tax regime exemption represents one of the most interesting developments in international taxation in recent years.

Although it is unlikely to replace the UAE, Türkiye offers something different: a combination of European lifestyle, lower living costs and potentially favourable taxation for individuals with substantial overseas wealth.

For some internationally mobile entrepreneurs, investors and families, that combination could be compelling. The individuals who benefit most will be those who plan carefully before relocating.

Successful international tax planning is not about finding the lowest tax rate. It is about creating the right combination of tax efficiency, business opportunity, family considerations and long-term certainty.

If you are considering a move and would like to explore your options, our team can provide advice tailored to your circumstances.