Company Formation in Turkey: 7 Essential Steps to Establish Your Business

Company formation in Turkey offers a promising opportunity for entrepreneurs and investors looking to establish a business in a dynamic and strategically located market. With its unique position bridging Europe and Asia, Turkey has become an attractive destination for foreign direct investment.

Our lawyers will guide you through the essential aspects of setting up a company in Turkey, including the types of business entities, the formation process, and key considerations for foreign investors.

Our company formation team is experienced in establishing a limited company, joint stock company, holding company, branch office, liaison office, free zone company formation, management, and governance in Istanbul.

Table of Contents

Understanding the Types of Companies in Turkey

When considering company formation in Turkey, it’s crucial to understand the various types of business entities available:

1. Limited Liability Company (LLC): The most common form for small to medium-sized enterprises. An LLC requires a minimum of one shareholder and a share capital of at least 50,000 Turkish Lira (TRY). This type of company limits the liability of its shareholders to their capital contributions.
2. Joint Stock Company (JSC): Suitable for larger businesses, a JSC requires a minimum of one shareholder and a share capital of at least 250,000 TRY. This structure allows for the issuance of shares and is ideal for companies looking to attract investment.
3. Collective Company: All partners have unlimited liability, making this structure less common for foreign investors.
4. Limited Partnership: Similar to a collective company but allows for both general partners (with unlimited liability) and limited partners (whose liability is restricted to their capital contribution).
5. Cooperative Company: Formed by a group of individuals for mutual benefit, this type of company is less common in the context of foreign investment.

The Company Formation Process

Setting up a company in Turkey involves several key steps:

1. Preparation of Documents

Before initiating the registration process, you must prepare the necessary documents, including:

• Articles of Association: This document outlines the company’s purpose, structure, and operational guidelines.
• Identification: Passports of all shareholders and legal representatives must be translated into Turkish and notarized.
• Tax Identification Number: Foreign shareholders must obtain a potential tax identity number from the relevant tax office.

2. Notarization and Registration

The next step involves notarizing the Articles of Association and other required documents. Once notarized, you can apply for registration at the Trade Registry Office. This process includes:

• Submitting the notarized documents along with the application forms.
• Paying a registration fee, which includes 0.04% of the company’s capital to the Competition Authority.
• Obtaining a bank certificate confirming the deposit of the minimum capital.

3. Tax and Social Security Registration

After the company is registered, it must be registered with the tax office and the Social Security Institution. This step is crucial for obtaining a tax number and ensuring compliance with local labor laws.

4. Publication

Once registered, the company’s establishment is published in the Trade Registry Gazette, marking the official start of operations.

Key Considerations for Foreign Investors

Legal Requirements

Foreign investors can establish a company in Turkey without the need for a local partner. The Turkish Commercial Code allows for 100% foreign ownership, which is a significant advantage for international entrepreneurs.

Taxation

Turkey offers a competitive corporate tax rate of 25%, with various incentives available for businesses operating in free trade zones. Understanding the tax implications and benefits is essential for optimizing your investment.

Business Environment

Turkey’s strategic location, coupled with its growing economy and improving infrastructure, makes it an attractive market for foreign investment. The government actively encourages foreign direct investment, providing a supportive legal framework and various incentives.

Professional Assistance

Navigating the company formation process can be complex, especially for foreign investors unfamiliar with local regulations. Engaging a local law firm or consultancy can streamline the process, ensuring compliance and efficiency.

Post-Registration Procedures

Several important tasks follow registration:

1. Register for Social Security
2. Open a company bank account
3. Obtain necessary operating licenses

Each industry may have specific additional requirements. Our team at Akkas & Associates can guide you through these post-registration procedures to ensure full compliance.

Foreign Investment Considerations

Turkey welcomes foreign investment, but there are some sector-specific restrictions and requirements to be aware of:

• Certain industries may require special permits or have limitations on foreign ownership percentages.
• Some professional services may require Turkish citizenship.
• Real estate acquisitions by foreign companies are subject to specific regulations.

It’s crucial to consult with legal experts who understand these nuances to navigate potential challenges successfully.

Tax Implications for Foreign Investors

Understanding Turkey’s tax system is vital for business planning. Key points include:

• Corporate Income Tax rate: 25%
• Dividend Withholding Tax: 15% (may be reduced under double taxation treaties)
• Value Added Tax (VAT): Standard rate of 20%, with reduced rates for certain goods and services

Turkey has double taxation agreements with many countries, potentially offering tax benefits to foreign investors. Our tax specialists can provide detailed advice tailored to your situation.

Conclusion: Your Gateway to Turkish Business Success

Company formation in Turkey presents a valuable opportunity for investors seeking to tap into a vibrant market. By understanding the types of business entities, the formation process, and the legal landscape, you can make informed decisions that align with your business goals.

With the right support and guidance, establishing a company in Turkey can be a straightforward and rewarding endeavor. For tailored advice and assistance with your company formation in Turkey, consider reaching out to our experienced professionals who can guide you through every step of the process.

Fast & Easy Company Formation in Turkey

We have established more than 260 companies for our foreign clients including Spain, UAE, Ukraine, Russia, UK, Morocco, Lebanon, Syria, S. Korea, Germany, Italy, Jordan, Vietnam, Poland, France, Pakistan, China, Hong Kong, USA, Malaysia, Iran, Portugal, Norway, Canada, Saudi Arabia, Iraq, and Kuwait.

How Many Days Needed for a Company Formation in Turkey?

We can form your company and open bank accounts and get online banking in 1-2 days if partners are in Turkey and the company formation process will be faster and cost less.

We can establish your company remotely if you are not in Turkey, however, the setup process will be longer and cost more.

Steps of Company Formation in Turkey

According to the Turkish Commercial Code, a limited company (LLC) requires a minimum of one partner and it can be a legal entity or a real person, there can be a maximum of 50 shareholders. The partner/partners can be Turkish or foreign as well. Foreigners can own 100% of a company and transfer their profit out of Turkey without any problems.

The minimum required capital for a limited liability company is 50,000. -TL (Turkish lira). The capital of the company shall be paid in two years and up to four installments.

Company Formation Roadmap in Turkey

• Partners’ passport translation and notarization
• Obtaining tax ID numbers for the partners
• Getting Power of Attorney from the partners for company formation before the Notary Public
• Determining and reserving the company title
• Signing a lease contract for the company address
• Preparing online company establishment procedures
• Filing company details at the Istanbul Chamber of Commerce online
• Filing company Articles of Incorporation online and getting it approved
• Filing all the documents at the Istanbul Chamber of Commerce and paying official company registration fees
• Obtaining a company registration certificate from the Istanbul Chamber of Commerce
• Getting signature circular notarized at Notary Public
• Giving Power of Attorney to an accountant on behalf of the company
• Opening company bank account

We Need the Following Documents for Company Formation in Turkey

From Real Persons;

• 2 Translated and notarized passport copies
• 2 Passport photos
• Power of Attorney to us for incorporating the company from each shareholder

Bank Account Opening for Your Company

We open bank accounts for companies established in Turkey. Nowadays, there is a huge demand for bank account opening by foreign companies in Turkey. We assist you in opening company bank accounts.

We need the below documents for the company bank account:

• Company articles of incorporation.
• Shareholders’ and directors’ passport copies and their addresses proving documents such as an electricity invoice.
• Turkish tax ID number for each shareholder (we will get it).
• Signature circular for the company.
• Company stamp.

How Akkas & Associates Can Assist You

With over three decades of experience in Turkish business law, Akkas & Associates offers comprehensive support for company formation in Turkey:

1. Legal consultation on the most suitable business structure
2. Document preparation and legalization
3. Representation during the registration process
4. Guidance on post-registration compliance
5. Ongoing legal support for your business operations

Our multilingual team ensures clear communication throughout the process, making your entry into the Turkish market as smooth as possible.

Reach us for a Company Formation in Turkey

Establishing a business in Turkey offers exciting opportunities for foreign investors looking to tap into a strategic market bridging Europe and Asia. The process of company formation in Turkey involves several crucial steps, from choosing the right business structure to navigating registration procedures and complying with local regulations.

Whether you’re considering a Limited Liability Company (Ltd. Şti.) or a Joint Stock Company (A.Ş.), understanding the legal requirements, minimum capital needs, and tax implications is essential for a successful venture.

With its robust economy, skilled workforce, and government incentives, Turkey presents an attractive destination for international business expansion. However, the complexities of Turkish business law can be challenging to navigate alone.

For expert guidance through every stage of company formation and ongoing legal support, contact Akkas & Associates Law Firm. Our experienced team of multilingual lawyers has been assisting foreign investors since 1992, ensuring a smooth and compliant entry into the Turkish market. Reach out to Akkas & Associates today to turn your Turkish business aspirations into reality.