Types of Companies in Turkey
Types of Companies in TurkeyUpdated on Thursday 26th January 2023
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Foreign businessmen who wish to open a company in Turkey have the possibility to choose between the limited liability company, joint stock company, limited partnership or commercial partnership. Our Turkish lawyer is able to provide you with guidance, assistance, and information if you want to register a company and to start doing business in Turkey. They can also provide assistance and support for obtaining a work or residence permit or apply for licenses and permits.
Limited liability company in Turkey
The limited liability company is preferred among overseas investors, due to the simple stages implied in the registration process in Turkey and to the suitability as a small or a midsize company. The limited liability company in Turkey can be started with a minimum share capital of about TRY 10,000 (around EUR 2,835). It is good to know that this type of business requires a board of managers or executives. Our lawyers in Turkey can offer details related to the registration process and the taxation system for your future business.
A limited liability company in Turkey can be established by at least one shareholder and no restrictions regarding the nationality as long as the operations can be made in accordance with the Turkish Commercial Code and other laws applicable in this country. The Articles of Association, the Memorandum of Association, copies of the personal identification documents and the power of attorney for the representative of the newly formed company need to be notarized and submitted to the Turkish Trade Register. Meanwhile, a bank account needs to be opened in Turkey for the minimum share capital that needs to be deposited. One of our Turkish lawyers can provide complete support in terms of formalities and business registration in Turkey. They can also act on behalf of your company in Turkey and represent your firm. Here is an infographic that explains more about the available types of companies in Turkey:
What you need to know about the joint stock companies in Turkey
The joint stock company is also preferred by many investors who wish to start a large business in Turkey. For this type of company, the minimum share capital must be around 50,000 TRY (EUR 14,176) and needs to be provided by at least 5 investors or businessmen. You should know that a joint stock company is subject to the Turkish Commercial Code and the Capital Market Board. One of our lawyers in Turkey can give complete information about the taxes for such structure and about how to register for VAT in Turkey.
A residence permit in Turkey can be easily obtained if you decide to collaborate with our lawyers. We will ensure our clients understand the formalities, but also prepare the necessary documents required by the immigration authorities. In addition to a valid passport, health insurance is also needed, plus information about the new residence. Contact us today to benefit from our specialized legal advice.
What you need to know about the partnerships in Turkey
The commercial partnerships in Turkey also called Komandit Sirket or Kollektif Sirket, are legal entities divided in limited or general partnerships, where the business partners can be liable for the obligations and also for the debts of the partnerships. It is good to know that the partners can be liable only for the invested amount in the company when the debts are involved. The registration procedure of a company in Turkey is made at the Trade Register where the following documents are required:
- the bank statements that show the needed share capital for your company;
- articles of association;
- ID and a signed declaration of the person that represents the company;
- copies of the passports or other identification documents of the persons involved in the company;
- the tax registration number.
Regarding the corporate tax, the foreign companies are obliged to pay the annual 20% rate established by the authorities in Turkey.
Can I establish a subsidiary in Turkey?
Yes, subsidiaries can be established in Turkey by large companies from abroad. These are independent legal entities that can develop other activities besides the main ones. The taxation is made on the global income, in respect to the applicable tax laws in Turkey. A subsidiary can be established prior to registering a limited liability company in Turkey with a minimum share capital of TRY 50,000 for a public one. The Turkish subsidiary can be established by at least one shareholder and must have a board of directors. If you are interested in establishing a subsidiary in Turkey, please address your requests to one of our lawyers un Turkey and solicit legal advice and expertise.
Can I buy a company in Turkey?
Yes, purchasing a shelf company in Turkey can be a great option for entrepreneurs who would rather have a fast start with an already registered company instead of dealing with the entire process. Ready-made companies present lots of advantages and are a great alternative for international investors wanting to do business in Turkey in a simple and fast manner. Vintage companies are already incorporated, they have a VAT number, they have a bank account, they can be used as offshore companies, can develop all sorts of activities and can be used as soon as the ownership transfer is made.
Entrepreneurs will only have to send us copies of the identification documents, complete some forms and agree on the costs involved. We mention that the purchased vintage company is registered with the Turkish Trade Register, the institution that needs to be notified for any change regarding the company operations, directors, shareholders, etc. Even if shelf companies have no activities and therefore, no financial debts or liabilities, some entrepreneurs might ask for company due diligence, a matter where our Turkish attorneys can help.
Holding companies in Turkey
Holding companies are other business options for foreign entrepreneurs in Turkey. This structure allows having shares in local companies and controls them in specific areas. In matters of conditions for opening holding companies, entrepreneurs must firstly register a limited liability company, a collective company, a joint-stock company, a commercial partnership or a commandite company in Turkey. The limited liability company and the joint-stock company are the preferred entities for establishing a holding company in Turkey, for minimum share capital of TRY 10,000 and TRY 50,000 respectively. It is important to note a few aspects regarding the registration and permission for holding companies in Turkey. These must have the approvals issued by the Trade General Directorate, part of the Ministry of Customs and Trade.
Investing in Turkey
Turkey has an advantageous geographic location, found on two continents: Europe and Asia. This is an important benefit for a series of economic activities that can be developed by foreign investors in Turkey. The young and skilled workforce, the well-developed infrastructure and the multitude of connections with countries worldwide by air, sea, and land are a few of the business advantages offered by Turkey to international investors. Here are some numbers and facts about the Turkish economy that you might find interesting:
- An improvement was observed by World Bank through the 2020 Doing Business report, ranking Turkey 33rd out of 190 economies in the world.
- Around USD 134,000 million was the total FDI stock registered in Turkey in 2018.
- The Netherlands (15,8%) and USA (7.6%) are the main investors in Turkey.
- Azerbaijan was the largest investor in Turkey in 2019, in the oil & gas sector.
Please feel free to contact our team of lawyers in Turkey, if you need additional information and legal assistance about the types of companies in the country.