What are the types of legal entities I can register in Turkey?
Foreing entrepreneurs interested in investing in Turkey
should know that the basic features of the legal entities
have recently changed with the ratification of the new Turkish Commercial Code
, which came into force since 1st of July 2012. Even though the forms of business remained unchanged, their characteristics may vary from the previous ones.
- limited liability companies (Limitet Şirket),
- joint stock companies (Anonim Şirket),
- comandite companies,
- collective companies,
- cooperative companies.
Partnerships in Turkey
Besides the above mentioned types of companies, other legal entities recognized by the Turkish law are the commercial partnerships (Kollektif Sirket and Komandit Sirket). Legal entities set up as Komandit Sirket are rarely used, as the general managers are liable for the debts incurred by the company. The ordinary partnerships are not considered legal entities; they are formed as a consortium of entrepreneurs who are personally liable for the debts of the consortium. An ordinary partnership cannot have a trade name and they are not registered at the Register of Commerce.
An ordinary partnership (consortium) is formed by a group of entrepreneurs united under an agreement. As a particularity, the ordinary partnership is not registered at the Register of Title Deeds, as it is not formed as a legal entity. All partners are liable for all the debts and obligations and have equal rights.
The two forms of commercial partnerships are:
- general (Kollektif Sirket - all the members are fully liable for the debts and obligations and have equal rights);
- limited (Komandit Sirket - formed by a general partner fully liable for the debts and obligations but with decisional powers and silent partners, liable for the debts and obligations in the limit of their contributions to the capital).
The joint stock company in Turkey
The A.S (joint stock company) requires having at least one shareholder and may be closed or open. The closed joint stock company must provide a minimum share capital of 50.000 TRY and the open joint stock company must provide a minimum share capital of 50.000 TRY and a registered capital of 100.000 TRY. The open joint stock companies may offer its shares to the public, by registering it to the stock market, unlike the closed joint stock companies. All the shares of the joint stock company may be in cash or kind and must have a nominal value (of minimum 1 KR).
The management of the joint stock company is assured by a board of directors that may be formed by a single member. There is no necessity to be shareholder in the company to be part of the board of directors.
The limited liability company in Turkey
A Turkish LS (limited liability company) is formed by at least one shareholder with a share capital of minimum 10.000 TRY. The minimum share capital has to be deposited at once, installments are not allowed. The total number of shareholders cannot be above 50. The management of a limited liability company may be assured by a manager or a council of managers, which may not be shareholders of the company. The obligation of keeping a website was recently introduced for the limited liability companies by the New Commercial Code.
The comandite company in Turkey
The comandite company is a commercial company formed by commanditers (legal members with limitation of liabilities determined by their subscribed capital) and unlimited members. There is no necessity to subscribe a minimum share capital for this type of business and the liability for the company’s debt is not shared in the same way for all the shareholders; some shareholder may be liable for the subscribed capital, while other can be fully liable for the company’s debts, in accordance to the provisions of the Article of Association.
The Turkish collective company
The collective company
is a form of business formed with no minimum share capital, which is set up as a company
with commercial activities. The liability of the members is limited by their contribution to the capital. All the shareholders of a collective company must be real persons.
If you need more details about the types of companies
, our law firm in Turkey
can offer you assistance on the subject.
What are the steps for incorporation of a company in Turkey?
Six steps are required in order to incorporate a legal entity in Turkey.
After elaborating and signing the articles of association, the document must be notarized along with the signature declaration of the managers and the commercial books of the entity.
0.04% from the capital has to be deposited at the Competition Authority and the minimum share capital has to be deposited in a bank, which will issue a certificate of paid-in capital.
After that, the applicant must comply to the requirements of the Trade Registry Office
and file the incorporation notice form, commitment letter, and Chamber registration statement.
The legal books of the company have to be notarized followed by the last step, the registration for the specific taxes
at the Turkish Tax Office
and Social Security Administration
(performed by the Commercial Register but supervised by the company).
What is the minimum share capital of AS and LS?
The minimum share capital of a limited liability company (LS) is 10.000 TRY, which has to be deposit in a single installment at registration, while the minimum share capital of a joint stock company (AS) is 50.000 TRY.
What documents are required for the incorporation of a company in Turkey?
- 3 copies and the original of the articles of association,
- 2 copies of the signature documents,
- 2 copies of the identification documents of the firm managers,
- one copy of the passport for each foreign shareholder,
- 3 copies of a notification form of establishment.
Other requirements are:
- the original receipt from the bank, proving that the 0,04% from the capital were deposited to the Competition Authority,
- the certificate of deposit of the minimum capital.
For tax reasons, the company has to submit the certificate of registration, which will contain the tax number. The investor must also present a letter of undertaking, as stated by the Trade Registry Regulation.
Alongside with the bank receipt, stating the deposit of the minimum capital, the bank must also issue a letter in this sense, which will be added to the documentation necessary for the registration of the company.
How quickly can I incorporate my company in Turkey?
If you have provided all the documents required for the registration of the company
, the incorporation process
may take less than 2 weeks (this period is calculated taking into account the time necessary to set up an office
here, but also the registration for tax compliance