Türkiye offers 20-year tax exemptions to lure AI data centers amid Gulf crisis

Türkiye has announced tax incentives for individuals and companies affected by the Gulf crisis due to the Iran war, offering 20-year corporate tax exemptions for firms moving regional headquarters to the Istanbul Financial Center (IFC) and income tax exemptions for foreign professionals relocating from the region.

Companies that relocate their regional headquarters to the IFC will receive corporate tax exemptions on profits generated from overseas operations for 20 years. Foreign professionals who had not resided in Türkiye during the previous three years before relocation will also receive income tax exemptions on foreign earnings for the same period.

The disruption triggered by the Gulf crisis could accelerate AI data center investments in Türkiye. Iran has reportedly designated 11 U.S. technology companies as targets, including Microsoft, Google, Apple, Meta, Oracle and Nvidia.

Gulf countries had aimed to build a $500 billion ecosystem by 2030 under the Stargate project, leveraging tax incentives and low-cost energy. Regional instability, however, has disrupted those plans. Between Feb. 28 and March 31, around 500,000 foreign residents reportedly left the region with their families, primarily from Dubai and Doha, while 15,000 companies either suspended operations or relocated to safer jurisdictions.

The first tangible commitment came from Google Cloud, which signed a deal for a $3 billion hyperscale data center in Ankara, with groundbreaking scheduled soon under a partnership with Turkcell. The move marked the first major hyperscale cloud investment entering the country. Meanwhile, Amazon Web Services (AWS) and Microsoft are reportedly reassessing partnership structures and waiting for the most favorable conditions before making commitments.

In recent weeks, Treasury and Finance Minister Mehmet Şimşek said Türkiye is making an intensive effort to attract large-scale data centers, adding that one of the main motivations behind the country's nuclear energy investments is meeting the enormous power needs of such facilities. A similar message was delivered by Vice President Cevdet Yılmaz at the opening of an AI data center project established through cooperation between NGN and Cerebrum Tech.

Türkiye's digital infrastructure is expanding rapidly. According to the FTTH/B Market Panorama report covering September 2024-September 2025, Türkiye ranked second in Europe after Germany in annual growth of fiber-to-the-home/building (FTTH/B) household coverage. The operator contributing most significantly to this surge was Türk Telekom.

Türk Telekom CEO Ebubekir Şahin said the company is not only addressing today's connectivity needs but also building a robust digital backbone capable of supporting the 5G ecosystem, artificial intelligence applications and broader advanced technologies. "As Türk Telekom, which leads Türkiye's digital transformation, we are carrying our country into the future through human-centered investments and uninterrupted efforts," Şahin said. "Our activities do not simply meet today's connectivity requirements. We are also building a powerful digital backbone that will support the AI ecosystem of the 5G era, advanced technologies and our national technology production vision."

Türkiye's homegrown startup ecosystem is also gaining momentum. Grand Games, a mobile gaming company founded roughly two years ago by Bekir Batuhan Çelebi, Mehmet Çalım and Mustafa Fırtına, has raised $103 million across three funding rounds in just two years, including a $70 million Series B investment in May 2025 led by Balderton Growth Fund. The company has posted 500% growth and reached the top two spots on the U.S. iOS download charts with titles including Magic Sort and Block Out. Grand Games CEO Bekir Batuhan Çelebi said: "In many companies, teams remain purely executors. We built a model where the people developing the games have real ownership over the product."