Company Formation in Turkiye
Steps for Company formation in Turkiye
Foreign enterprisers who want to register company in Turkiye 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.
Types of Companies in Turkiye
- Limited Liability Company (LLC)
- A Limited Liability Company, known as “Limited Şirket” (Ltd. Şti.) in Turkish, is the most common form of business entity in Turkiye, especially for small to medium-sized enterprises.
- The liability of the shareholders is limited to their capital contributions.
- Minimum capital requirement: 10,000 Turkish Lira (as of the latest information).
- Requires at least one shareholder and one manager.
- Management is flexible and can be organized according to the company’s needs.
- Suitable for most types of businesses, including trading, services, and manufacturing.
- Joint Stock Company (JSC)
- A Joint Stock Company, known as “Anonim Şirket” (A.Ş.) in Turkish, is suitable for larger enterprises with multiple shareholders.
- The liability of shareholders is limited to their capital contributions.
- Minimum capital requirement: 50,000 Turkish Lira (as of the latest information).
- Shares can be traded publicly or privately.
- Requires at least one shareholder, a board of directors, and a statutory auditor.
- Suitable for businesses aiming for significant growth, as it allows for the issuance of bonds and public offerings.
- Branch Office
- Foreign companies can establish branch offices in Turkiye to conduct business activities locally.
- The branch office operates as an extension of the foreign parent company, and the parent company bears full liability for the branch’s obligations.
- Branch offices must register with the Trade Registry Office and obtain a tax identification number.
- Suitable for foreign companies seeking to expand their presence in Turkiye without forming a separate legal entity.
- Liaison Office
- Also known as a Representative Office, a Liaison Office is established by foreign companies for non-commercial purposes such as market research, promotion, and coordination.
- Liaison offices cannot engage in commercial activities or generate revenue in Turkiye.
- Requires registration with the Ministry of Trade and the Ministry of Economy.
- Suitable for foreign companies seeking to establish a presence in Turkiye for non-commercial purposes.
- Cooperative
- Cooperatives are formed by individuals or legal entities to conduct economic activities based on the principles of cooperation and mutual assistance.
- Members share profits and risks according to their contributions.
- Cooperatives can be established for various purposes, including agriculture, production, services, and consumer cooperatives.
- Sole Proprietorship
- Also known as “Individual Entrepreneurship” (Tek Kişilik Şirket) in Turkiye, a sole proprietorship is the simplest form of business ownership.
- The individual owner is personally liable for all debts and obligations of the business.
- Suitable for small businesses and freelancers, offering simplicity and ease of setup.
Documents needed for company formation in Turkiye
One of the most important way to company formation in Turkiye is the medication of the documents demanded 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 residential addresses, 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 directors of the company, including their name, the way in which they’re appointed and can be abandoned and their duties and scores.
The same document must easily 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 disagreement resolution method if any problems appear between the shareholders. It’s veritably important for the Articles of Association to be drafted in agreement with the Provision of the Commercial Code. However, our Setup in Turkiye can help you with the preparation of these documents, If you’re a foreign entrepreneur and want to open a company in this country.
An important aspect which should be considered is that in the case of setting up a sole procurement, a simple operation form needs to be filed with the Trade Register. In the case of partnerships which in Turkiye are known as commandite companies, the cooperation deed stands at the base of their creation.
Obtaining a business license in Turkiye
Preparing the business
The limited liability company can be the proper business form for foreign investors in Turkiye. Regardless of the activities. Our professionals have experience in this field and can help you register the business in Turkiye.
Apply for licenses and permits
Licenses and permits arevobtained in accordance with the type of activities the future company will have. It is recommended to have legal support in this matter from one of our Turkish expert
Prepare the documents
The Article of Association need to be drafted and notarized before being submitted to Turkish Trade Register. These comprise details about the owners, activities , board of mnagers etc.
Register for tax purposes
Companies in Turkiye are like taxpayers. The registration for tax purposes and social contributions is mandatory for foreign investors in Turkiye, so fee free to contact for registration by our experts.
Obtain the company seal
Once the company stamp is obtained, the business can have activities on the market, in compliance with the Company Act and other important sets of laws.
FAQs
Opening a company in Turkiye 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).
It takes about 3 weeks to set up a company in Turkiye. 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 team of lawyers in Turkiye. We can help with personalized company registration services in Turkiye.
Turkiye offers various business structures, including limited liability company (LLC), joint-stock company (JSC), branch office, liaison office, and sole proprietorship.
The minimum capital requirement depends on the type of business entity. For example, the minimum capital for an LLC is TRY 10,000, while for a JSC, it is TRY 50,000.
Foreign investors can establish a company in Turkiye without requiring a local partner, except for certain restricted sectors where Turkish law mandates local participation.
The process typically involves selecting a business name, preparing company documents, opening a bank account, obtaining tax identification number, notarizing company documents, registering with the Trade Registry Office, and obtaining necessary licenses and permits.
Foreign investors should be aware of regulations related to ownership restrictions, licensing requirements, and specific industry regulations in Turkiye. It’s advisable to seek guidance from legal advisors familiar with local laws and regulations.
Registered companies in Turkiye are required to comply with various regulatory obligations, including filing annual tax returns, maintaining accounting records, holding annual general meetings, and fulfilling other corporate governance requirements.
Registered companies in Turkey are subject to corporate income tax, value-added tax (VAT), and other taxes administered by the Revenue Administration. Understanding tax obligations and compliance requirements is essential for business operations in Turkey.
