Open a Business in Turkey - Incorporation Procedure
Opening a Business in Turkey
Updated on Monday 17th June 2024 Rate this article
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Our lawyers in Turkey can offer assistance to foreign investors who want to open a business in Turkey. Having experience in the field of incorporation, our specialists can help investors prepare and submit the solicited documents with the Turkish authorities. Plus, those who want to relocate the business can call on our immigration lawyers in Turkey.
| Quick Facts | |
|---|---|
| Types of companies available in Turkey | - limited liability company, - joint stock company, - commercial partnership, - sole proprietorship, etc. |
| The most popular business structure in Turkey | Limited liability company (LTD) |
| Minimum share capital for a Turkish LLC | TRY 10,000 |
| Registration formalities for an LLC in Turkey | - registration of the business address, - preparation of Articles of Association, - opening a bank account, - tax registration, - application for special licenses and permits |
| Local representative required (YES/NO) | Yes |
| Local company management | It can be local or foreign, depending on the business projects. |
| Company domiciliation available | We can help foreign businessmen domiciliate their companies in Turkey. |
| Hiring staff | Immigration matters should be observed in the case of foreign workers. |
| Corporate tax rate in Turkey | 20% |
| VAT registration in Turkey | Companies with commercial activities in Turkey must be registered for VAT. Our local experts can provide assistance. |
| Can I open a company in Turkey's free zones? | Yes, you can set up a company in industrial free zones, IT development zones, or other free zones and benefit from a dedicated tax system. |
| Support for trademark registration (YES/NO) | Yes |
| We represent clients with a power of attorney (YES/NO) | Yes |
| Other services you can benefit from when opening a company in Turkey | - tax advice and planning, - accounting services, - legal advice for immigration issues |
| Why choose our Turkish law firm | - experienced team of lawyers, - dedicated legal services at affordable prices, - personalized offers |
How to register a new business in Turkey
Foreign enterprisers who want to open businesses in Turkey are required to complete a few steps before starting operating. These steps consist of:
- choosing the type of company they want to establish and have the incorporation documents drafted and notarized in accordance with the Companies Law;
- open the corporate bank account and deposit the share capital required by the law;
- appoint the company’s directors or managers, as prescribed by the legislation;
- submit the incorporation documents and the details of the shareholders and managers with the Trade Register;
- obtain the tax and VAT numbers, as well as registering for social security purposes with the tax office.
Our Turkish lawyers can assist with the process of opening a business here. Our lawyers invite you to watch a video about the company incorporation process in Turkey:
Documents needed to open a company in Turkey
One of the most important steps in opening a company in Turkey is the preparation of the documents needed to register the business with the Trade Registrar. The main set of documents which need to be drafted and notarized is the Articles of Association which need to contain all the details of the shareholders – their names, their places of residence, their contribution to the share capital of the company and the number of shares they own in the business. The Articles of Association must also contain information about the managers of the company, including their name, the way in which they are appointed and can be revoked and their duties and obligations.
The same document must clearly state the Turkish company’s trade name, its address in this country and a description of the object of activity. The Articles of Association can also contain other clauses, related to the amendments which can be brought to the company and dispute resolution methods if any problems appear between the shareholders. It is very important for the Articles of Association to be drafted in accordance with the provisions of the Commercial Code. If you are a foreign entrepreneur and want to open a company in this country, our law firm in Turkey can help you with the preparation of these documents.
An important aspect which should be considered is that in the case of setting up a sole proprietorship, a simple application form needs to be filed with the Trade Register. In the case of partnerships which in Turkey are known as commandite companies, the partnership deed stands at the base of their creation.
Shareholders in a company in Turkey
The shareholders are the founders of the company, or better said the owners of the business. These can be natural persons or companies and have various rights, but also duties in the company. The minimum number of shareholders a Turkish company can have is one in both private and public companies. These can be Turkish citizens or residents; however, foreigners can also act as sole shareholders when opening a company in this country.
One of the main responsibilities of the shareholders is to contribute to the share capital of the business. Based on their contributions, they will acquire more or fewer rights in the company. The greatest advantage of the shareholders is that their liability towards the company’s debts and other obligations will be limited to the amount of money they invested in the company in the case of limited liability companies. In the case of partnerships, the role of shareholders is completed by the partners or members.
Foreigners interested in immigration to Turkey and business development can get in touch with our local agents.
Company management in Turkey
One of the most important roles in a Turkish company is taken on by the managers of the company. The shareholders are required to appoint at least one company director in the case of a private company. A board of managers must ensure the management of a public company in Turkey.
The same type of company must have at least one auditor appointed. In the case of private companies, the auditor will be an independent one and will be called only when the financial documents of the business need to be audited. It should be noted that no matter the type of company, at least one of the shareholders must be a company director. The manager role can also be fulfilled by another company with the condition that it appoints a natural person as a company representative.
Immigration to Turkey is a straightforward process that can be supervised by our lawyers. You will benefit from specialized legal advice for the preparation of the necessary documents. You can also be helped to obtain a residence permit to be able to live and work in accordance with the immigration legislation in Turkey. Get in touch with us to find out about the benefits offered if you collaborate with our team.
The trade name and legal address when opening a company in Turkey
The first step for registering a business in Turkey is finding a suitable trade name for the business. The name must be unique and must not be offensive. In order to make sure the company name is unique, the applicant can file for validation 3 different names, out of which he or she will choose the appropriate one based on the company’s requirements. We remind investors that branch offices need to bear the same name as the parent company. Another important requisite for the company to be considered a Turkish resident business is for it to have a local address. The registered address must be in the city where the company will operate. For this purpose, we can help with virtual office services. Plus, if you want more details about immigration to Turkey, contact us today.
How easy is it to hire personnel in Turkey?
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. There are two ways of obtaining work permits for foreign employees: with the Ministry of Labor and in the country of the resident of the foreign worker through the Turkish embassies or consulates. The necessary documents for the Turkish Consulate or Embassy are the following:
- the passport of the applicant which must be in its validity period;
- a work visa application which will be handed to the applicant at the time;
- one recent passport-size photo; and one copy of the work contract – the future employer must send the copy;
- letter of assignment, which confirms the appointment of the future employee.
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 a maximum of 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.
If you need a digital nomad visa in Turkey, contact us for legal assistance.
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 developed 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 of medical aesthetic services.
Other incentives 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.
We can also help you if you want to buy a property in Turkey. If you need to do business in other countries and open companies there, we can put you in touch with our local partners. For example, we can help you with company incorporation in Dubai, UAE.
Other types of business structures available in Turkey
If you want to open a business in Turkey, you should know that you have various options at hand. Here are some of them and the most representative ones:
- Sole Proprietorship – It is one of the simplest legal business structures that can be managed and operated by a single individual. He or she is fully liable for debts of the business. Also, a sole trader addresses small and medium-sized businesses, which may change their structure at some point.
- Joint-Stock Company or JSC - It is another business structure that attracts the attention of foreign investors. Normally, a JSC is addressed to large corporations and businesses. We emphasize here that ownership in a Turkish JSC is divided into shares, and stockholders are liable only for the amount of capital they have in the firm.
- Branch - Foreign companies can open branches in Turkey easily, as long as they comply with local and international legislation. Normally, a branch must have the same activities as the parent company. There is no need for minimum share capital for opening a branch in Turkey.
- A liaison office in Turkey - It involves opening a representative office of a foreign company, but without having commercial activities. This type of structure is addressed to those who want to develop various marketing and promotion campaigns on the territory of Turkey, to look for customers interested in products and services provided by the foreign firm. A representative office in Turkey must have a liaison officer in charge of a wide range of responsibilities. The parent company is in charge of the costs of opening and maintaining a liaison office in Turkey.
Requirements for directors in a Turkish company
What is good to know about the conditions for appointing a company director is the fact that he must be in full capacity for exercising his/her roles in the newly established firm. On the other hand, a company in Turkey can have any kind of director, from any country, because there are no restrictions regarding nationality. However, a work and residence permit in Turkey is needed to be able to carry out its activities legally.
There is also the possibility that legal entities in Turkey can be appointed as company managers. Here, the legal representatives of the respective entity appointed as directors for another company come into discussion. It is very important for a representative of a legal entity in Turkey to have a tax number and to be registered with the Trade Registry Office in this country. In this sense, we represent our clients with power of attorney to obtain the desired tax ID number.
How much does it cost to open a company in Turkey?
Opening a company in Turkey is not expensive, however, the business owner must consider the company registration fees, the notary fees and the honorary of the Turkish law firm handling the procedure (if one is appointed). On the other hand, our immigration lawyers in Turkey can manage the visa requirements for staff in your firm.
Working with a local agent in Turkey
It is quite recommended to consider the support of a well-trained team of specialists when you want to start a business in Turkey. Complexities can appear at any time during the company registration, but in order to avoid these things from the start, collaboration with a local agent is important.
Also, our lawyers in Turkey can represent clients who want to open their businesses here, but who, for various reasons, cannot travel to take care of the incorporation formalities. Here is what we offer you:
- Support for creating company documents.
- Legal representation before the authorities for incorporation.
- Preparation of documents for obtaining tax ID in Turkey.
- Assistance in immigration matters: residence, work permit, staff and company relocation, etc.
We mention that it takes about 3 weeks to set up a company in Turkey. The procedure takes longer in the case of a branch office.
If you need further information on the procedures applied by the Turkish authorities at the incorporation of a company, please contact our law firm in Turkey. We can help with personalized company registration services in Turkey.
