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How easy is it to set up a business in Turkey?
After establishing the desired type of business (limited liability companies, joint stock companies, commandite companies, collective companies or commercial partnerships), the registration process doesn’t take longer than a week. The foreign investor must also benefit from a certain amount of capital before starting a business; for example, the limited liability company requires a minimum share capital of 10,000 TRY, while the joint stock company must deposit at least 50,000 TRY. Our attorneys in Turkey can offer you assistance in respect to all the procedures required at the incorporation process and can also help you to submit the documents at the Turkish authorities.
At the level of 2013, the Turkish workforce is constituted by 27.91 million young people, well-educated and responsible. Finding suitable candidates for vacant places can be performed by posting ads in newspapers or websites or by hiring a workforce agency which will find the suitable candidate for the valid positions.
If the newly founded company in Turkey is interested in hiring foreign personnel, the procedure can be performed only in the situation in which the foreign employees receive a working permit, issued by the Turkish authorities.
The work permits can be obtained outside Turkey (through the Turkish Consulates or Embassies) or directly from the Ministry of Labor and Social Security, if the person has a valid Turkish residence permit.
The necessary documents for the Turkish Consulate or Embassy are the following:
• a work visa application;
• one photo;
•one copy of the work contract;
•letter of assignment.
In the situation in which a company hires a foreign employee, the Turkish employer must submit to the Ministry of Labor and Social Security an online application and the following documents:
•work permit application letter;
•foreign personnel application form;
•a balance sheet;
•the latest profit/loss statement.
The online application must be submitted in maximum ten working days at the Turkish Consulate, after the foreign employee has applied for the position.
Foreign employees can be hired in Turkey under the regulation regarding the Employment of Foreign Nationals within the Framework of Foreign Direct Investments. Foreign direct investment refers to companies set up in Turkey or to a branch of a foreign company; under the law no.4875, a company set up in Turkey may hire foreign personnel as long as the foreign shareholders own a minimum of TRY 1,062,691 of the company’s capital. Our Turkish law firm can provide you with further information on the provisions set up under this law.
The residents must fill out an online application to the Ministry. The decision of granting the work permit is released in maximum one month.
What are the main points of interest for foreign investors?
The main points of interests for the foreign investors are represented by three major special investment zones:
- the free zones (20 zones especially designed to increase the number of export investments, with 100% exemption for custom duties, corporate income tax for the manufacturing enterprises, VAT, income tax on the personnel’s salary for companies which exports at least 85% of the goods produced here, the possibility to deposit goods free of charge unlimited and with the possibility to transfer the profits abroad and to Turkey);
- organized industrial zones (276 zones with low costs on natural gas, water, telecommunication, no municipality tax on construction or on solid waste - the last one, if the zone doesn’t benefit from the municipality service, no VAT on land acquisition, exemption from the real estate duty for five years from the construction);
- technology development zones (50 zones with major exemptions until 2024 on corporate and income taxes on the revenue coming from software development, VAT on software application sales, salaries of R&D personnel - but without exceeding 10% of the number of employees).
At the moment, only 34 technology development zones are functioning, while the others are still under construction. Also, you should know that a highly developped industry in Turkey is hair transplantation. This business sector is highly competitive and attractive for investors, as there are many customers that are in need of these types ofmedical aesthetic services.
Otherincentives offered to the foreign investors are granted by the double tax treaties (which provide the release of paying the same taxes in the country of residence and in Turkey) and by the Free Trade Agreements (signed with Albania, Bosnia and Herzegovina, Chile, Croatia, Egypt, Georgia, Iceland, Israel, Jordan, Lebanon, Liechtenstein, Mauritius, Macedonia, Montenegro, Morocco, Norway, Palestine, Serbia, South Korea, Switzerland, Syria, Tunisia) which allow the trade between each of these countries and Turkey with no custom taxes.