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Business Start-Up Costs in Turkey

Business start-up costs in Turkey

Updated on Sunday 26th January 2020

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business_start-up_costs_turkey.jpgBefore starting a company in Turkey, you should know the estimated costs of the bureaucratic procedure and other amounts you have to spend for the incorporation, the minimum capital share, fees, and services etc. Unlike western European countries, Turkey has low costs for start-up businesses and a stable economic environment which are attractive for foreign investors.
 
Below, our lawyers in Turkey provide information about the main costs associated with starting a business in this country. We specialize in offering business registration solutions in Turkey which is why we invite you to reach out if you are interested in such services.
 

What are the main business start-up costs in Turkey?

 
The first aspect to consider when deciding to set up business in another country is the start-up costs. When you open a company in Turkey, there are several costs related to company incorporation:
 
  • -   drafting and notarizing the company documents, according to the Commercial Code (articles of association, signature declarations, founders’ declaration, power of attorney etc.);
  • -    paying stamp tax for the necessary papers, the notary services, the tax registration certificate and the certification of the legal books at a public notary;
  • -    the minimum capital share which needs to be deposited that may vary according to the type of company;
  • -    the fee related to the incorporation at the Trade Register and submitting the necessary documents;
  • -    the announcement of opening a new company at the Commercial Registry Gazette.

 

You can rely on one of our lawyers in Turkey for assistance in preparing all the documents needed to register a new business in this country.
 

The share capital of a company in Turkey

 
The first cost which needs to be considered when setting up a new business in Turkey is the share capital. It should be noted that the Company Law in Turkey provides for a minimum share capital which is mandatory for certain types of business forms, and the authorized share capital which is represented by the amount of money the investor decides he or she needs to start operating. With respect to the minimum share capital required, a foreign investor must consider the following:
 
  • -          sole proprietorships and partnerships (commandite companies) do not need a specific amount of money to be registered;
  • -          the Turkish private limited liability company required at least 10,000 TRY for registration;
  • -          for a public or joint stock company, the law requires at least 50,000 TRY for incorporation;
  • -          foreign companies need no share capital when registering branch offices in Turkey.

 

If a foreign company decides to register a subsidiary, it must consider the share capital requirements for a private or public limited liability company, depending on the chosen structure. Considering most investors choose to register private limited liability companies in Turkey, it should be noted that only 0.04% of the share capital must be deposited upon incorporation. When it comes to the authorized share capital, this must be established by the foreign owner based on the industry to operate in and on market research or a feasibility study.
 

What are the company registration costs in Turkey?

 
One of the most important costs associated with doing business in Turkey is the registration cost, which can be broken down into:
  1.           the preparation of the incorporation documents, which will imply the drafting and notary fees;
  2.           the reservation and approval of the trade name of the new company which implies no cost;
  3.           the registration fee of the company – this fee depends on the type of business form chosen;
  4.           the fee for publishing the company’s Articles of Association in the Official Gazette;
  5.           the fee for recording the company’s Articles of Association with the Turkish Trade Register;
  6.           the start-up notice fee, the managers’ signature registration fee and the annual Chamber of Commerce membership fee;
  7.           the fee related to obtaining the list with the authorized signatures of the managers;
  8.           the fees for obtaining the workplace opening and operation permits.

 

The other procedures which imply the registration for social security, for tax and VAT purposes do not imply any fees, as they can be completed online. Foreign investors can also appoint a specialized agent, such as a lawyer in Turkey, who can handle the registration of the company on their behalf. Our law firm in Turkey can help in this regard with the help of a power of attorney granted by the overseas investor.
 

Other costs related to opening a business in Turkey

 
Apart from the business registration costs, a foreign investor who wants to open a company in Turkey must also consider the fees associated with the opening of a corporate bank account. From this point of view, each bank has its own fees, which is why it is best to consult with our law firm in Turkey before choosing the bank to work with.
 
As mentioned earlier, our lawyers can complete the business registration process on behalf of foreign investors, which will imply granting us power of attorney to handle the aspects which need to be completed with the Trade Register. This will only imply the notary fee for drafting the power of attorney, therefore the businessperson does not need to fear for additional costs. Those interested in starting a business in Turkey can also buy shelf companies which will help them save the start-up costs. However, they will need to consider the fees to be paid for amending the company’s details. Also, those who need a registered address for the company can choose a virtual office which is cheaper than a traditional one and thus cut some of the start-up costs. You might want to know the process of VAT registration in Turkey, a matter where our specialists can help.
 

Advantages of investing in Turkey

 
Turkey is a great country for opening a small company and when you don’t have a big amount to invest, but you want to take advantage of a great opportunity that may appear at a time. You can also take advantage of the weak competition and the emerging economic market and the appetite of the consumers for spending money on new products and services. Other important advantages are the low costs for the workforce, that is well trained and skilled, and the costs with suppliers. The wages are very low especially for young people who are university graduates compared to those in western Europe.
 
When you set up a company in Turkey, you should think of having at least a virtual office, if you don’t intend to organize a headquarters for your business. The costs for a virtual office are lower than for a traditional one and you can benefit from a prestigious business address and other services, such as:
 
  • - incoming and outgoing faxes
  • - receiving and sending the mail
  • - answering the phone on behalf of your company etc.

 

If you choose to have a virtual office, you will pay a small amount every month, but if you need a traditional office, there are higher costs related to leasing, renting or buying and the maintenance of that space. Whenever you need a virtual office or you want to open a company in Turkey, you can ask our Turkish lawyers for assistance and guidance. They will offer you legal services related to company formation and special packages for registration of a new firm, with all costs included. 
 
We invite you to contact us for detailed information on all the services we provide for foreign investors interested in doing business in Turkey.