Setting up a business in Turkey opens doors to exceptional growth opportunities in one of the world’s most dynamic emerging markets. With the right legal guidance and strategic planning, foreign investors can successfully navigate the company formation process and position themselves for long-term success.
Since 1992, Akkas & Associates Law Firm has been a top-notch, full-service legal partner in Istanbul, guiding foreign shareholders through the complexities of Turkish law. We have successfully registered over 250 companies for our international clientele. This article outlines the vital steps to successfully set up your business in Turkey in 2025.
Table of Contents
- Why Foreign Investors Choose Turkey for Business Formation
- Understanding Business Structures in Turkey
- Step-by-Step Process to Register Your Company
- 1. Choosing the Optimal Company Structure
- 2. Obtain Your Turkish Tax ID Number (TIN)
- 3. Preparation and Notarization of Essential Documents
- 4. Deposit Capital and Competition Authority Fee
- 5. Final Registration with the Trade Registry Office
- 6. Post-Registration Formalities and Compliance
- 7. Understanding the 2025 Turkish Tax Landscape
- Understanding Tax Obligations in Turkey
- Work Permits and Residence Requirements for Foreign Entrepreneurs
- Timeline and Costs for Business Setup
- Key Advantages of Doing Business in Turkey
- Common Challenges and How to Overcome Them
- Ongoing Compliance Requirements
- Frequently Asked Questions (FAQs)
- Contact us to Set up a Business in Turkey
Why Foreign Investors Choose Turkey for Business Formation
Turkey’s appeal to international investors extends far beyond its geographical advantages. With a population of over 84 million, Turkey offers significant domestic market potential that continues to attract businesses from around the globe.
The Turkish government has implemented substantial reforms to create a business-friendly environment. The establishment of a one-stop shop through the Trade Registry Directorates located in the Chamber of Commerce enables businesses to complete the incorporation process in a single day, significantly streamlining what was once a complex bureaucratic process.
Foreign investors benefit from equal treatment under Turkish law, with no restrictions for foreign investors to establish companies in Turkey. This means you can own 100% of your Turkish company without requiring a local partner in most sectors.
Understanding Business Structures in Turkey
Selecting the appropriate legal structure is crucial for your business success. The most popular options for foreign investors include:
Limited Liability Company (LLC)
The LLC, known locally as “Limited Şirket,” is the predominant structure for foreign enterprises, accounting for roughly 90% of foreign company presence due to its operational flexibility and straightforward establishment. An LLC offers several advantages:
- The minimum capital requirement to set up a company in Turkey is TRY 50,000 for a Limited Liability Company
- Requires only one shareholder minimum
- Limited liability protection for owners
- Flexible management structure
- Suitable for small to medium-sized enterprises
Joint Stock Company (JSC)
For larger ventures or businesses planning to go public, the JSC (Anonim Şirket) provides greater scalability. The minimum capital requirement is TRY 250,000 for a Joint Stock Company, and this structure allows shares to be publicly traded, making it ideal for companies seeking significant growth or investor funding.
Branch Office
Foreign companies can also establish a branch office, which are viewed as extensions of the parent company and must conduct their operations according to the parent company’s regulations. Branch offices require no minimum capital but are limited to the parent company’s scope of activities.
Step-by-Step Process to Register Your Company
The company formation process in Turkey has been significantly modernized through digital platforms, making it more accessible for foreign investors.
1. Choosing the Optimal Company Structure
The first critical decision is selecting the right legal entity. The Turkish Commercial Code (TCC) offers several options, but foreign investors overwhelmingly favor two types for their flexibility and recognition:
- Limited Liability Company (LLC / Limited Şirket): This is the most popular choice for SMEs. It requires a minimum capital of TRY 50,000 (as of 2025). Capital payment can be made within 24 months of registration. Liability is limited to the subscribed capital.
- Joint Stock Company (JSC / Anonim Şirket): Suitable for larger ventures or businesses planning public offerings. It requires a minimum capital of TRY 250,000 (as of early 2025 data). At least 25% of the cash capital must be paid before registration. JSCs offer greater flexibility in share transfer.
Key Insight: Turkey generally permits 100% foreign ownership in both LLCs and JSCs, ensuring national treatment for all investors.
2. Obtain Your Turkish Tax ID Number (TIN)
Every founder, shareholder, and authorized representative—whether a natural person or a legal entity—must secure a Turkish Tax Identification Number (TIN). This is a fast, straightforward process that can often be completed online via the Interactive Tax Office (İnteraktif Vergi Dairesi) portal or through an authorized lawyer in Turkey.
3. Preparation and Notarization of Essential Documents
The core document is the company’s Articles of Association (AoA).
- Drafting and MERSİS Registration: The AoA must be drafted in Turkish through the Central Registry System (MERSİS). MERSİS is the national centralized electronic system used for all commercial registry transactions.
- Document Authentication: For foreign legal entities, apostilled documents like the Certificate of Activity(proving the company’s existence and signatories) and the Board of Directors Resolution authorizing the establishment must be prepared. All foreign documents require certified Turkish translation and notarization.
- Signature Circular: Notarized signature declarations for the company’s authorized signatories must be prepared.
4. Deposit Capital and Competition Authority Fee
The subscribed capital must be deposited into a Turkish bank account opened in the name of the prospective company.
- JSC Requirement: For a Joint Stock Company, a minimum of 25% of the subscribed cash capital must be deposited before submitting the registration application.
- LLC Flexibility: For Limited Liability Companies, the entire capital can be paid within 24 months after registration.
- Competition Authority Fee: A small percentage (currently 0.04%) of the capital is paid to the Turkish Competition Authority via the Trade Registry Office.
5. Final Registration with the Trade Registry Office
Once all documents are notarized, certified, and the capital proof is secured, the application is filed with the relevant Trade Registry Office, typically within the local Chamber of Commerce. Our Istanbul corporate law team ensures the application dossier is complete, preventing delays.
- The Trade Registry Office reviews and approves the application.
- Upon approval, the company is officially registered, gaining legal personality. An announcement of the company’s establishment is published in the Trade Registry Gazette.
6. Post-Registration Formalities and Compliance
Registration is just the beginning of sound corporate governance. The newly formed company must complete several crucial post-registration steps:
- Tax Office Activation: The Trade Registry automatically notifies the Tax Office (Vergi Dairesi). A tax officer will visit the company headquarters to prepare a “determination report,” a final check before full tax registration is complete and the tax plate is issued.
- Social Security Institution (SGK) Registration: Required if the company intends to hire employees.
- Corporate Bank Account: The corporate bank account is finalized and the capital block is lifted (for JSCs).
- Legal Books Certification: The required legal books (e.g., journal, ledger, inventory book) must be certified by the notary public or the Trade Registry Office.
7. Understanding the 2025 Turkish Tax Landscape
Foreign investors benefit from a modern tax system. Understanding your obligations is key to sustainable operation:
- Corporate Income Tax (CIT): The standard corporate tax rate in Turkey for 2025 is 25%. Resident companies are taxed on their worldwide income, while non-resident companies are taxed only on their Turkish-sourced income.
- Withholding Tax (WHT): Dividend payments to non-resident entities are generally subject to a 15% WHT, which may be reduced by Turkey’s extensive network of Double Taxation Treaties (DTTs).
- Value-Added Tax (VAT): The standard VAT rate in Turkey is 20%. Reduced rates of 10% and 1% apply to certain goods and services.
For comprehensive guidance on compliance, please see our page on Turkish Corporate Law Services.
Understanding Tax Obligations in Turkey
Turkey operates a comprehensive tax system that businesses must navigate carefully. The standard corporate income tax rate in Turkey is around 25% as of 2025, though this rate may vary based on government fiscal policy adjustments.
Value Added Tax (VAT)
Value Added Tax (KDV in Turkish) is a major source of revenue. The general VAT rate is 20%, but reduced rates of 1% and 10% apply to certain goods and services. Businesses must issue VAT-compliant invoices and file monthly VAT returns to maintain compliance.
Tax Incentives and Benefits
Turkey offers attractive tax incentives to encourage foreign investment. The Turkish government offers various incentives for foreign investors based on priority areas, regions, project scale, and strategic sectors. These incentives may include tax reductions, VAT exemptions, and customs duty relief for qualified businesses.
Companies operating in Free Trade Zones enjoy even greater benefits, including corporate income tax exemptions and VAT relief on eligible activities.
Work Permits and Residence Requirements for Foreign Entrepreneurs
If you plan to actively manage your Turkish business, understanding work permit requirements is essential. A paid-up capital of 500,000 TRY is required for each partner seeking to obtain a work permit, as per the new regulations issued in January 2025 (for companies not older than 6 months).
For established companies (older than six months), the requirement includes employing at least five Turkish citizens per foreign worker applying for a work permit. Once approved, work permits are typically valid for 6 to 12 months and can be renewed.
Foreign shareholders may also apply for residence permits once the company becomes operational, allowing them to live and work in Turkey legally.
Timeline and Costs for Business Setup
Understanding the financial requirements and timeline helps you plan your business launch effectively.
Registration Timeline
Once documents are ready, ~3–10 business days is typical for LLC/JSC registration. However, the overall timeline can extend if you need to arrange document apostille, translations, and bank account opening procedures.
Cost Breakdown
Typical setup fees (excluding share capital) range from about $2,500–$3,500 for an LLC and $3,000–$5,500 for a JSC. These costs cover:
- Trade Registry fees
- Chamber of Commerce registration
- Notary services
- Translation and apostille fees
- Legal and consulting fees
Professional assistance from Akkas & Associates Law Firm can help streamline the process and avoid costly delays or errors.
Key Advantages of Doing Business in Turkey
Turkey’s business environment offers numerous competitive advantages:
Strategic Geographic Position: Located between three continents, Turkey serves as a natural bridge for international trade, providing access to markets representing over 1.5 billion consumers.
Skilled Workforce: Turkey boasts a young, educated, and multilingual workforce with competitive labor costs compared to Western European markets.
Growing Economy: Turkey’s economy has shown remarkable resilience and growth, particularly in technology, manufacturing, renewable energy, and tourism sectors.
Infrastructure Development: Significant investments in transportation, logistics, and telecommunications infrastructure have enhanced Turkey’s connectivity and business operations efficiency.
EU Customs Union Membership: Turkey’s membership in the Customs Union with the European Union facilitates trade and provides preferential access to European markets.
Explore our corporate governance services to ensure your Turkish company maintains full compliance with local regulations.
Common Challenges and How to Overcome Them
While Turkey offers tremendous opportunities, foreign investors should be aware of potential challenges:
Language Barriers
All official documents must be in Turkish, and dealing with government offices requires Turkish language proficiency. Partnering with a bilingual legal advisor eliminates this obstacle and ensures accurate documentation.
Regulatory Complexity
Turkish commercial law and tax regulations can be complex for newcomers. Professional guidance from firms experienced in foreign investment ensures compliance and helps navigate bureaucratic requirements efficiently.
Cultural Differences
Understanding Turkish business culture and building local relationships is crucial for long-term success. Patient relationship-building and respect for local customs facilitate smoother business operations.
Ongoing Compliance Requirements
Maintaining your Turkish company requires attention to several ongoing obligations:
- File annual financial statements
- Submit quarterly and annual tax returns
- Maintain accurate accounting records according to Turkish Accounting Standards
- Register any changes in company structure with the Trade Registry
- Conduct annual general assembly meetings
- Renew business licenses as required
Professional accounting and legal services ensure you remain compliant with all Turkish regulations and avoid penalties.
Frequently Asked Questions (FAQs)
Q1: Can foreigners own 100% of a Turkish company?
Yes, foreign investors can establish and own 100% of a Turkish company without requiring a Turkish partner in most sectors. Turkey’s Foreign Direct Investment Law guarantees national treatment and equal footing with local investors.
Q2: How long does it take to set up a company in Turkey?
The registration process typically takes between 1-2 weeks once all documents are prepared. With the MERSIS digital platform, the actual registration can be completed in as little as one business day, though document preparation, translations, and bank account opening may extend the overall timeline.
Q3: What is the minimum capital requirement for starting a business in Turkey?
For a Limited Liability Company (LLC), the minimum capital requirement is 50,000 TRY. For a Joint Stock Company (JSC), the minimum is 250,000 TRY. Branch offices do not require minimum capital deposits.
Q4: Do I need to be physically present in Turkey to register a company?
No, you can register a company remotely by granting a notarized Power of Attorney to a legal representative in Turkey who can complete the registration procedures on your behalf. However, certain steps like notarization may require your presence or apostilled documents from your home country.
Q5: What are the corporate tax rates in Turkey for 2025?
The standard corporate income tax rate is approximately 25-30% depending on the business type, with financial institutions facing a higher rate of 30%. Additionally, businesses must comply with VAT requirements, which typically range from 1% to 20% depending on goods and services.
Q6: Can I get a work permit after setting up a company in Turkey?
Yes, company owners and shareholders can apply for work permits. For companies less than six months old, depositing 500,000 TRY in capital allows foreign shareholders to obtain work permits without hiring Turkish employees. Established companies must employ five Turkish citizens for each foreign worker.
Contact us to Set up a Business in Turkey
Since 1992, Akkas & Associates Law Firm has been at the forefront of providing comprehensive company formation and corporate governance services to foreign investors in Istanbul. With over 250 successful company registrations for clients from around the world, our multilingual team understands the unique challenges faced by international entrepreneurs.
Whether you’re looking to establish a Limited Liability Company, Joint Stock Company, or branch office in Turkey, our experienced attorneys provide end-to-end support throughout the entire registration process. From initial consultation and structure selection to final registration and ongoing compliance, we ensure your business formation is handled professionally and efficiently.
Ready to set up your business in Turkey? Contact Akkas & Associates Law Firm today for a comprehensive consultation. Our expert team will guide you through every step of the company formation process, ensuring your Turkish business venture starts on solid legal ground.
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