Thinking of expanding your business to Turkey in 2025? Turkey offers a dynamic market and strategic location for foreign investors. Navigating to form company in Turkey can seem complex, but with the right guidance, it’s a straightforward process. Akkas & Associates Law Firm, a leading full-service law firm in Istanbul since 1992, is here to simplify your journey.
Table of Contents
- Understanding Turkish Company Types
- Step-by-Step Company Formation Process
- Foreign Investment Considerations
- Tax Obligations and Incentives
- Sector-Specific Regulations
- Banking and Financial Requirements
- Employment and Labor Law Compliance
- Ongoing Compliance Requirements
- FAQs on Forming a Company in Turkey
- Reach us to Form a Company in Turkey Fast
Turkey’s strategic location bridging Europe and Asia makes it an attractive destination for international businesses. With its growing economy, skilled workforce, and favorable investment climate, forming a company in Turkey has become increasingly popular among foreign investors.
Understanding Turkish Company Types
Before diving into the formation process, it’s crucial to understand the different company structures available in Turkey. The most common types include:
Joint Stock Company (Anonim Şirket – A.Ş.) is ideal for larger businesses planning to go public or attract significant investment. The minimum capital requirement is 250,000 Turkish Lira, and shareholders’ liability is limited to their capital contributions.
Limited Liability Company (Limited Şirket – Ltd. Şti.) is the most popular choice for small to medium-sized enterprises. With a minimum capital requirement of just 50,000 Turkish Lira, this structure offers flexibility and limited liability protection for shareholders.
Branch Office allows foreign companies to establish a presence in Turkey while maintaining their original corporate structure. This option requires approval from the Ministry of Trade and is suitable for companies wanting to test the Turkish market.
Step-by-Step Company Formation Process
1. Choose and Reserve Your Company Name
The first step involves selecting a unique company name that complies with Turkish naming regulations. The name must be in Turkish and cannot conflict with existing registered companies. You can check name availability through the Turkish Trade Registry Gazette.
2. Prepare Required Documentation
Gather all necessary documents including passport copies, certificate of residence, and any required apostilled documents from your home country. For foreign investors, documents must be translated into Turkish by certified translators and notarized.
3. Open a Bank Account and Deposit Capital
Before registration, you must open a blocked bank account with a Turkish bank and deposit the minimum required capital. The bank will issue a capital deposit certificate, which is essential for the registration process.
4. Draft Articles of Association
The Articles of Association must be prepared in accordance with Turkish Commercial Code requirements. This document outlines the company’s purpose, capital structure, management framework, and operational guidelines. Working with experienced Turkish corporate lawyers ensures compliance with all legal requirements.
5. Register with Trade Registry
Submit your application to the local Trade Registry office along with all required documents. The registration process typically takes 1-2 business days once all documentation is complete and accurate.
6. Obtain Tax Registration
After trade registry approval, register with the local tax office to obtain your tax identification number. This step is mandatory for all Turkish companies and must be completed within 30 days of registration.
7. Complete Social Security Registration
If you plan to hire employees, register with the Social Security Institution (SGK). This registration is required before employing any staff members in Turkey.
Foreign Investment Considerations
Turkey welcomes foreign investment with minimal restrictions. Foreign investors can own 100% of most Turkish companies, with exceptions in certain strategic sectors. The Foreign Direct Investment Law provides equal treatment for foreign and domestic investors.
Foreign investors must also consider currency regulations and reporting requirements. Companies with foreign shareholders may need to report certain transactions to the Central Bank of Turkey, particularly those involving foreign exchange operations exceeding specific thresholds.
Tax Obligations and Incentives
Turkish companies are subject to corporate income tax at a rate of 25%. However, Turkey offers various investment incentives including tax reductions, customs duty exemptions, and social security premium support for qualifying investments.
Understanding VAT requirements is also crucial. Companies with annual turnover exceeding certain thresholds must register for VAT and submit regular returns. The standard VAT rate is 20%, with reduced rates for certain goods and services.
Sector-Specific Regulations
Some business sectors require additional licenses or permits before commencing operations. Industries such as banking, insurance, telecommunications, and healthcare have specific regulatory requirements that must be fulfilled alongside standard company formation procedures.
Tourism businesses, manufacturing companies, and technology firms may qualify for special incentive programs offered by the Turkish government. These programs can provide significant cost savings and operational advantages for qualifying businesses.
Banking and Financial Requirements
Establishing banking relationships is crucial for business operations in Turkey. Turkish banks offer comprehensive commercial banking services, but the account opening process can be complex for new companies. Requirements typically include company registration documents, tax certificates, and identification of authorized signatories.
Consider working with banks that have experience serving international businesses. Many Turkish banks offer specialized services for foreign-owned companies, including multi-currency accounts and international transfer facilities.
Employment and Labor Law Compliance
If you plan to hire employees, understanding Turkish labor law is essential. Turkey has comprehensive employment regulations covering working hours, minimum wage requirements, social security contributions, and termination procedures.
Employment contracts must comply with Turkish Labor Law requirements, and all employees must be registered with social security authorities. Foreign employees may require work permits, depending on their nationality and the nature of their employment.
Ongoing Compliance Requirements
Once your company is established, maintaining compliance with Turkish regulations is ongoing. This includes filing annual tax returns, submitting periodic reports to trade registry authorities, and maintaining proper corporate records.
Companies must also comply with Turkish Commercial Code requirements regarding board meetings, shareholder assemblies, and financial reporting. Regular legal compliance reviews help ensure your company meets all regulatory obligations.
FAQs on Forming a Company in Turkey
1. How long does it take to form a company in Turkey? The company formation process typically takes 2-5 business days once all required documents are prepared and submitted. The timeline can vary depending on the company type and completeness of documentation.
2. What is the minimum capital requirement for forming a company in Turkey? For Limited Liability Companies (Ltd. Şti.), the minimum capital is 50,000 Turkish Lira. Joint Stock Companies (A.Ş.) require a minimum capital of 250,000 Turkish Lira.
3. Can foreign nationals own 100% of a Turkish company? Yes, foreign investors can own 100% of most Turkish companies. There are restrictions only in certain strategic sectors such as media, aviation, and telecommunications.
4. Do I need to be physically present in Turkey during company formation? While physical presence is not always required, it’s highly recommended. Alternatively, you can appoint a local representative with power of attorney to handle the formation process on your behalf.
5. What ongoing reporting requirements apply to Turkish companies? Turkish companies must file annual tax returns, submit periodic reports to trade registry authorities, maintain corporate records, and comply with social security reporting requirements for employees.
6. Are there any tax incentives available for new companies in Turkey? Yes, Turkey offers various investment incentives including reduced corporate tax rates, customs duty exemptions, and social security premium support for qualifying investments in priority sectors and regions.
Reach us to Form a Company in Turkey Fast
Establishing a company in Turkey involves navigating complex legal, regulatory, and administrative requirements. The process requires careful attention to documentation, compliance with local laws, and understanding of ongoing obligations. Professional legal assistance ensures your company formation proceeds smoothly and meets all regulatory requirements.
For expert guidance on Turkish company formation, corporate structuring, and ongoing compliance matters, contact Akkas & Associates Law Firm. Our experienced legal team has been providing comprehensive Turkish business law services since 1992, helping international clients successfully establish and operate companies in Turkey.
Please fill out and submit the form below to make an appointment.
