1. What does the 20-year tax exemption mean?
2. Tax exemption is not a work permit.
3. What does the digital nomad status solve?
4. Foreign sole proprietorship
5. Turkish sole proprietorship
6. Special case US LLC
7. Capital company abroad
8. The 183-day rule
9. Which structure is suitable?
10. Practical examples
11. Who is it suitable for?
12. For whom is it not suitable?
13. Our conclusion
Turkey is becoming increasingly attractive to expats, entrepreneurs, remote workers, and high-net-worth individuals. Antalya, Alanya, and Izmir, in particular, are very popular with many German-speaking buyers: pleasant climate, lower cost of living compared to Germany, international communities, and an attractive selection of real estate.
Additionally, a new tax regulation is attracting attention: Under certain conditions, income earned abroad can be exempt from Turkish income tax for up to 20 years. This initially sounds very attractive.
Many therefore ask themselves the question:
Can I simply move to Turkey, work online, and receive my foreign income tax-free?
The clear answer is: No, it's not that simple.
In practice, several areas need to be examined separately:
1Tax residency
220-year tax exemption on foreign income
3Digital nomad status
4Work permit in Turkey
5Business premises / permanent establishment
6Company structure: Sole proprietorship, corporation or US LLC
This distinction is often overlooked. Many people confuse tax exemption with a work permit or believe that a foreign company automatically solves all problems. This is precisely where the greatest risks arise.
1. What does the 20-year tax exemption actually mean?
The new tax regulation is aimed at certain natural persons who become tax residents in Turkey and receive income from abroad.
The key point is:
This concerns income that is actually generated outside of Türkiye.
However, this does not automatically mean that all income is tax-free just because the customer, employer, or bank account is located abroad.
The crucial question, therefore, is:
Where is the service actually provided?
If someone is based in Alanya, Antalya or Izmir and works operationally from there on a daily basis, it can be debated for tax purposes whether the income really still qualifies as purely foreign income.
2. Tax exemption is not a work permit.
A very important point that is often overlooked in practice:
Tax law and labor law are two fundamentally different areas.
Even if an income were tax-advantaged or tax-free, this does not automatically mean that the person is legally allowed to work in Turkey.
Important: A normal tourist Ikamet, rental Ikamet or real estate Ikamet generally does not permit gainful employment.
Anyone living and actively working in Turkey therefore needs either:
- a suitable digital nomad status,
- a work permit,
- an exemption from the requirement for a work permit,
- or another legally appropriate structure.
Key point: Tax exemption does not replace the right to work.
3. What does the digital nomad status solve?
The Turkish digital nomad status is intended for people who work remotely from Turkey for foreign employers or clients.
According to the official application logic, there are two main cases:
Case 1: Employees at a foreign companyThe person has an employment contract with a company outside of Türkiye.
Case 2: Self-employed / FreelancersThe person has a business contract or service agreement with a company outside of Türkiye.
In addition, proof of a certain minimum income is required.
Important: The digital nomad status primarily resolves the residency and work status issues for approved remote work abroad. However, it is not an automatic tax exemption.
Specifically, this means:
- With digital nomad status: Approved remote work for foreign clients is significantly cleaner from a labor law perspective.
- Without digital nomad status: Working actively from Turkey can quickly become a problem if there is no work permit or exemption from work permit requirements.
However, even with digital nomad status, it must be separately checked for tax purposes whether the income actually falls under the 20-year tax exemption.
4. Why a foreign sole proprietorship can be problematic
Many freelancers think:
I own a German sole proprietorship. My clients are located in Germany. Therefore, my income is foreign income.
However, that's an oversimplification.
In a sole proprietorship, there is no separate legal entity. The freelancer themselves is the natural person. If this person is based in Turkey and works from there daily, the service is effectively provided from Turkey.
This creates two significant risks:
Tax riskTurkey could argue that the work is actually carried out in Turkey. In that case, the income would no longer be clearly distinguishable as purely foreign income.
Employment law riskIf there is no digital nomad status, no work permit, and no work permit exemption, the activity may be considered unauthorized work.
Therefore, from our point of view, a foreign sole proprietorship is not recommended for a long-term Turkish structure with 20 years of tax exemption.
In individual cases, a genuine contract with a company outside of Turkey might be considered for a digital nomad application. However, for a long-term tax-free structure, it is significantly weaker than a genuine employment relationship or a robust foreign corporation.
5. Turkish sole proprietorship: Why this is not a solution for the 20-year tax exemption
Some are considering:
Then I'll simply set up a sole proprietorship in Turkey and invoice my foreign customers from here.
However, this also poses a problem for the 20-year tax exemption.
Because a Turkish sole proprietorship means:
- The structure is located in Turkey,
- The work is carried out in Turkey.,
- The revenue is generated through a Turkish structure.,
- and the foreigner works independently in Turkey.
This makes it almost impossible to present it cleanly as purely foreign income.
Additionally, there is the issue of work permits. A foreigner who opens a business or works independently in Turkey generally needs a work permit.
5-employee rule: In many cases, the five-employee rule is also relevant for foreign business owners: This employment requirement may not be enforced under certain circumstances during the first six months. From the seventh month onward, at least five Turkish citizens must generally be employed.
Important: These six months do not constitute an exemption from the work permit requirement. It simply means that the employment conditions can be handled differently during the initial phase.
Therefore, a Turkish sole proprietorship is generally not the appropriate structure for the 20-year tax exemption.
6. Special case of US LLCs: Why not every LLC is a true corporation
One particularly important point concerns the US LLC.
Many freelancers, online entrepreneurs, and small remote businesses are now setting up an LLC in the USA. At first glance, this looks like a foreign corporation.
In practice, however, one must differentiate very precisely.
Not every LLC is treated for tax purposes like a traditional corporation.
Especially in the case of freelancers and small business owners, it is often a so-called single-member LLC — that is, an LLC with only one owner.
Unless this single-member LLC explicitly opts for taxation as a corporation, it is generally treated as tax transparent in the US. This means that the LLC is not treated as a separate corporation for income tax purposes; instead, its income is attributed to the owner.
This is very important for the Turkish structure. Because if the owner of the LLC is based in Antalya, Alanya or Izmir and carries out all the business activities from there, the LLC can be just as problematic as a sole proprietorship.
The risk is particularly high if:
- there is only one owner,
- no employees are located abroad,
- no real management exists abroad,
- no own business premises or substance abroad,
- The operational work is carried out entirely from Turkey,
- The LLC is treated in a tax-transparent manner.,
- The LLC serves only as a formal shell for the owner's activities.
Therefore, you should always check the following when forming an LLC:
- Is it a single-member LLC or a multi-member LLC?
- Is the LLC treated transparently for tax purposes?
- Has the LLC opted for taxation as a corporation?
- Is there any real substance abroad?
- Where is the actual management located?
- Who actually provides the service?
- From where is the operational business managed?
For the purposes of the 20-year tax exemption, a simple single-member LLC without a genuine foreign structure is therefore not automatically better than a German sole proprietorship.
On the contrary: If the LLC is tax transparent and the owner works entirely from Turkey, it can be just as risky for this structure as a sole proprietorship.
Key point: An LLC is not automatically a safe corporation. Especially for freelancers and small business owners, a single-member LLC must be examined very carefully.
7. Limited company abroad: Better, but not automatically safe
A genuine foreign corporation can be significantly cleaner than a sole proprietorship or a tax-transparent single-member LLC.
Examples include:
- GmbH,
- UG,
- Ltd.,
- Corporation,
- or an LLC that is treated as a corporation for tax purposes.
But here too, the following applies:
The company must not only be based abroad on paper.
The crucial factor is whether genuine substance is present. This includes, for example:
- foreign customers,
- foreign contracts,
- foreign bank accounts,
- Accounting abroad,
- Management outside of Türkiye,
- operational structure outside of Türkiye,
- clear separation between person and society.
Therefore, if the entire management is effectively based in Turkey, even a foreign limited company can become problematic.
Key point: A corporation is significantly better than a sole proprietorship — but it is not a free pass.
8. The 183-day rule is often misunderstood.
Many say:
I'll just stay under 183 days, then everything is tax-free.
That's too general a statement.
The 183-day rule is a tax rule. However, it does not automatically resolve all issues.
Above all, it does not replace a work permit.
Furthermore, it is also possible to check whether a permanent establishment or place of business exists in Turkey within 183 days.
An apartment does not automatically become a place of business. But if someone works from there regularly, systematically, and permanently, that can become a risk.
This point is particularly important for sole proprietorships, freelancers, and single-member LLCs. This is because, in these cases, it is often not a genuine foreign organization that is operating, but the individual themselves.
9. Which structure is the cleanest for the 20-year tax exemption?
From our perspective, the cases must be clearly distinguished. The resulting picture is as follows:
Option A: Employee at a foreign company
This is usually the clearest structure for the digital nomad status.
Example: A software developer moves to Izmir. She remains employed by her German employer, has a clear employment contract, receives her salary from abroad, and applies for digital nomad status.
Evaluation: For employment status, this is significantly clearer than a standard residence permit without remote work status. However, for tax purposes, it must still be examined whether and to what extent the salary can be treated as foreign income.
Option B: Foreign corporation with real substance
This can be a strong structure for entrepreneurs.
Example: An entrepreneur owns a limited liability company (GmbH) or corporation abroad. The company has real customers, contracts, bank accounts, accounting, and management outside of Turkey. He is moving to Alanya and is also exploring digital nomad status or another suitable residency solution.
Evaluation: Significantly better than a sole proprietorship. But only if the company has real substance and the management is not effectively completely relocated to Turkey.
Option C: Single-Member LLC without Corporation Election
This is common among freelancers and small business owners.
Example: An online marketer establishes an LLC in the USA. He is the sole owner, has no employees in the USA, no management abroad, and works entirely from Antalya.
Evaluation: Very critical. If the LLC is tax-transparent, it can be treated similarly to a sole proprietorship. This structure is not automatically suitable for the 20-year tax exemption.
Option D: Foreign sole proprietorship / freelancer
Example: A German freelancer with a German sole proprietorship moves to Alanya and works there daily for German clients.
Evaluation: Not recommended for a long-term, 20-year tax-free structure. The individual works from Turkey, which creates tax and labor law risks.
Variant E: Turkish sole proprietorship / Şahıs Şirketi
Example: A remote worker sets up a Turkish sole proprietorship in Alanya and invoices European customers.
Evaluation: This is generally not suitable for the 20-year tax exemption. The work is carried out through a Turkish structure. Additionally, the foreigner generally needs a work permit, and depending on the structure, employment criteria may become relevant from the seventh month onwards.
Option F: Passive foreign income
Example: An investor moves to Izmir. He receives dividends, capital gains or investment income from abroad and does not conduct any active business operations from Turkey.
Evaluation: This structure fits much better with the idea of 20 years of tax exemption for active freelance work. Nevertheless, the specific type of income, the applicable double taxation agreement, and the supporting documentation must be carefully examined.
10. Practical examples from Antalya, Alanya and Izmir
Practical example 1: Freelancer in Antalya with a German sole proprietorship
A marketing consultant moves to Antalya. He keeps his German sole proprietorship and works daily from his apartment for German clients.
Evaluation: Risky. Although the clients are located abroad, the physical work is performed in Turkey. Without digital nomad status, an additional labor law issue arises. Therefore, this structure is not recommended for the 20-year tax exemption.
Practical example 2: Online entrepreneur in Alanya with a single-member LLC
An online entrepreneur establishes a US LLC. He is the sole owner, has no employees in the US, and runs his business entirely from Alanya.
Evaluation: This structure should not automatically be treated as a safe limited liability company. If the LLC is tax-transparent and has no real substance abroad, it is more like a sole proprietorship for the purposes of Turkish taxation. This is problematic for the 20-year tax exemption.
Practical example 3: Employed remote worker in Izmir
An employee works for a company in Germany. She moves to Izmir and applies for digital nomad status.
Evaluation: This is significantly clearer regarding employment status. However, for tax purposes, it must still be separately assessed whether the income falls under the 20-year rule.
Practical example 4: Entrepreneur with a genuine limited liability company in Alanya
An entrepreneur owns a foreign limited company with real customers, contracts, accounting, bank account, and management located outside of Turkey. He is moving to Alanya and wants to explore the 20-year tax exemption.
Evaluation: This is a significantly better starting point. Nevertheless, it is essential to carefully avoid a situation where the actual management is entirely based in Turkey.
Practical example 5: Turkish sole proprietorship in Antalya
A foreigner establishes a Turkish sole proprietorship in Antalya and works from there for clients in Europe.
Evaluation: Not eligible for the 20-year tax exemption. The income is generated through a Turkish structure. Additionally, the foreigner generally needs a work permit.
Practical example 6: Investor in Izmir with passive foreign income
An investor moves to Izmir and receives dividends and capital gains from abroad. He does not actively conduct business operations from Turkey.
Evaluation: This structure is generally a better fit for the idea of 20 years of tax exemption. However, the specific type of income, the supporting documentation, and the tax audit remain crucial.
11. For whom might the 20-year tax exemption be of interest?
This regulation may be of particular interest to people who:
- Moving to Turkey,
- previously not tax residents in Turkey,
- receive genuine foreign income,
- do not establish a Turkish work structure,
- do not serve Turkish customers,
- be able to properly document their income,
- have a suitable residence status,
- Have tax and labor law reviewed separately.
It can also be particularly interesting for:
investors
Shareholder
People with dividends
Individuals with capital gains
Wealthy individuals
Entrepreneurs with a genuine international structure
Employees at foreign companies with digital nomad status
12. For whom is the 20-year tax exemption less suitable?
However, it is rather unsuitable or highly risky for:
- Freelancer with a foreign sole proprietorship,
- Freelancer with a single-member LLC lacking real substance,
- People who operate entirely from Turkey,
- People without digital nomad status,
- People with normal Ikamet status who still work,
- Foreigners with Turkish sole proprietorships,
- People who serve Turkish customers,
- Entrepreneurs whose actual management is effectively based in Turkey,
- People who believe that an LLC automatically solves all tax problems.
13. Our conclusion
The 20-year tax exemption is an exciting development for Turkey. It can make Antalya, Alanya, Izmir and other regions even more attractive to international investors, entrepreneurs and wealthy individuals.
But it is not a free pass.
Key point: Tax exemption does not replace a work permit.
Key point: Digital nomad status does not replace a tax audit.
Therefore, one should be particularly careful with sole proprietorships and simple LLC structures.
In our view, a German sole proprietorship, a Turkish sole proprietorship, or a tax-transparent single-member LLC are not the ideal solution for a long-term Turkish structure with 20 years of tax exemption.
Cleaner are usually:
- Employment with a genuine foreign company with digital nomad status
- Foreign limited company with real substance outside of Türkiye
- Passive foreign income without active operational activity from Turkey
The following are not recommended:
- Turkish sole proprietorship
- Foreign sole proprietorship operating entirely from Turkey
- Single-member LLC without substance and without a corporation structure
- Normal Ikamet without matching work status
Anyone planning to emigrate to Antalya, Alanya, or Izmir should therefore not only consider property, residence permit (Ikamet), and living expenses. Their own income and business structure must be carefully examined beforehand.
Because when it comes to Turkey, the following applies more than ever:
The residence permit, tax status, company structure and work authorization must all be compatible.
A notice: This article provides general information only and does not replace individual tax or legal advice. For a specific assessment of your situation, we recommend consulting a specialized tax advisor and a Turkish lawyer.
Frequently Asked Questions: Taxes in Türkiye for Expatriates
Am I automatically tax-free in Turkey if I live there?+
No — not automatically. Tax exemption in Turkey is only possible if certain conditions are met: tax residency in Turkey, genuine foreign income, a suitable business structure, and — if actively working — a legally recognized work status such as digital nomad status. Simply moving in and working online is not enough.
What is the difference between tax exemption and a work permit in Turkey?+
These are two completely separate areas. Tax law and labor law are independent of each other. Even if income were eligible for preferential tax treatment, that doesn't mean you're allowed to work in Turkey. Anyone actively working from Turkey needs a suitable employment status—for example, digital nomad status, a work permit, or an exemption from work permit requirements.
What is digital nomad status in Turkey — and what does it cover?+
The Turkish digital nomad status is intended for individuals who work remotely from Turkey for foreign employers or clients. It primarily addresses residency and employment status issues. However, it is not an automatic tax exemption. Whether the income qualifies for the 20-year tax exemption must be assessed separately by the tax authorities.
Can I remain registered as a sole proprietor in Germany and still be tax-exempt in Turkey?+
This is problematic in practice. With a sole proprietorship, there is no separate legal entity. If you are based in Turkey and work from there daily, the service is effectively performed in Turkey. This can lead to tax and labor law risks. In our view, a German sole proprietorship is not advisable for a long-term, 20-year tax-free structure.
Is a US LLC automatically recognized as a corporation in Turkey?+
Not automatically. Especially with a single-member LLC without choosing corporation status, the LLC is typically treated as tax-transparent in the US—meaning the income is directly attributed to the owner. If the owner works entirely from Turkey, the LLC can be just as risky as a sole proprietorship. Therefore, every LLC structure must be examined very carefully.
What does the 183-day rule state — and is it sufficient on its own for tax exemption?+
The 183-day rule is a tax rule used to determine tax residency. However, it doesn't automatically resolve all issues—and it doesn't replace a work permit. Furthermore, even after 183 days, it can be determined whether a permanent establishment or place of business exists in Turkey. Anyone who regularly and permanently works from a residence in Turkey should not take this lightly.
Which corporate structure is best suited for the 20-year tax exemption?+
The cleanest options are generally: a genuine employment relationship with a foreign company with digital nomad status, a foreign limited liability company with real substance outside of Turkey, or passive foreign income without active operational involvement. Sole proprietorships, Turkish sole proprietorships, and single-member LLCs without substance are not recommended.
For whom is the 20-year tax exemption in Turkey particularly suitable?+
It can be particularly interesting for investors, shareholders, individuals receiving dividends or capital gains, high-net-worth individuals, and entrepreneurs with a genuine international presence. Employees of genuine foreign companies who apply for digital nomad status also generally have a stronger starting position.
Real estate in Turkey: First, create the right foundation
Anyone emigrating to Turkey shouldn't just plan for real estate and living expenses. First, tax status, company structure, and work permits need to be clarified. We'll guide you through the process—from initial orientation to finding the right location.
We help you find the right professionals and support you in your property search in Antalya, Alanya and Izmir.
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