Turkey is a promising country for investors that has everything you need for a successful business: strategic location between two large markets, a considerable internal market, a stable economy, an open investment climate, and a well-developed infrastructure. In the current political situation, it does its best to remain a neutral state that fosters a safe atmosphere for businessmen from all over the world and will not sacrifice it for any political ambitions.
If you are a foreigner who wants to know what to expect of business in Turkey, we can say that it is a pretty straightforward process. Here are some facts and figures to show the business and economic direction of the country:
- About 60% of Turkey’s Foreign Direct Investments (FDI) account for manufacturing, finance and energy
- Turkey is ranked 33rd out of 190 countries in the 2020 Ease of Doing Business report
- The main Turkish investor is the Netherlands (16% of FDI), which is a kind of quality mark for the country’s investment climate
There are many factors why foreigners opt for Turkey as a business destination, and here are some reasonable points which may be appealing to you:
- Relaxed investment legal framework allowing entrepreneurs to launch a business quickly and without too much bureaucracy
- Affordable operating costs
- Strong consumer spending
- Overall support offered by the government of Turkey
- Turkish citizenship that is easily gained through beneficial programs and specific investments
- Ankara, Istanbul or Izmir are the business hubs strongly appreciated by foreign investors
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The FDI Law in Turkey relies on the principle of equal treatment, which means that local and international investors have the same rights and liabilities, as well as conditions for business establishment and transfer of shares.
Foreign investors can set up any form of company listed in the Turkish Commercial Code (TCC), which adopts a corporate governance framework that promotes international standards, stimulates public offering activities, ensures transparency in business operations and brings the business ecosystem into compliance with EU legislation.
Turkey has taken care of the investment environment by implementing reforms to reduce formalities and minimize costs and procedures. As a result, companies are set up in Trade Registry Directorates under Chambers of Commerce that manage the whole process.
In 2022, you can register a company in Turkey independently or with the help of an agent (like Offshore Pro Group) that will help open a bank account, rent an office, choose a legal form and register a company on a turnkey basis. The second option spares you all the hassle listed below and makes it possible to incorporate a legal entity in the Free Economic Zone of Turkey in the shortest possible time.
Want to quickly register a company in Istanbul to do business internationally despite the global crisis and the situation around Ukraine? Start with a free consultation of experts from the international portal, which will help you move on to your goals in the shortest possible time!
Company Registration Roadmap
International investors who want to set up a company in Turkey should complete several processes to achieve their goal:
- Get clear on the company form they want to register and have the required documents executed and notarized in compliance with the Companies Act
- Open a corporate bank account, deposit the legal minimum share capital and get a certificate of paid-in capital
- Appoint directors or managers under the Turkish laws
- Submit the Articles of Association and particulars of shareholders/management to the Trade Registry Office
- Obtain Tax and VAT numbers and have them registered with the tax authority
We will discuss the peculiarities of each step below. Our experts at Offshore Pro Group are here to guide you through the process and help you at each stage.
Professional Services for Company Registration in Turkey in 2022
Considering the business potential of international relations, many entrepreneurs from different countries want to operate in the global market. The aspect of security and assets protection is particularly complex due to the world crisis and the current geopolitical situation.
Turkey is a country where the dynamics and flexibility of Asian business are harmoniously combined with European standards and characteristics. Istanbul in Turkey is one of the centers of international business planning where protection against foreign political unrest is guaranteed.
Our company has been working with entrepreneurs from CIS countries and Europe for many years, providing consulting services and actual assistance in company registration, change of tax residence and registration of citizenship in different jurisdictions of the world, including Turkey. So we can register the company in Istanbul on a turnkey basis according to one of the scenarios:
- Registration of a company in Turkey with a personal presence in Istanbul and direct participation in the process – within 3-7 days
- Remote business registration (you don’t have to come to the Republic of Turkey) – within 3-5 days
Remote company registration in Turkey is available on behalf of the founder who transfers all authority (by power of attorney) to execute documents to our partners in Turkey. Such a service will be much more expensive than the first option, but it will reduce your time, costs and presence requirements. You will get a full set of constituent documents, an office, a bank account, and additional services of your choice (discussed individually).
Bank Account in Istanbul
Opening a bank account in Istanbul (Turkey) for an individual or corporation is paid separately and is not included in the standard package of services for Turkish company registration. The cost of opening a corporate bank account in Turkey depends on a number of factors and is discussed separately.
Study our suggestions on this issue separately or contact the experts of our portal by filling out a questionnaire and indicating your contacts for feedback. We will find the best banking option for you and help you open an account as quickly and safely as possible!
This is an essential step of company establishment process as it will allow your business to account for all its commercial transactions. The following documents will be required:
- Original Articles of Association
- A request form obtained from a local tax office
- The document that provides the company’s local address
- A power of attorney if you act through an agent like Offshore Pro Group
The corporate tax in Turkey is 20%, but foreign investors may be eligible for lower rates. A payroll tax, real property tax, social security tax and other taxes are also applicable.
Our Partner Ties in Turkey
We cooperate with several companies in Turkey that are competent in all legal, tax and economic issues of Turkish legislation.
Our colleagues in Turkey are highly qualified specialists who have a good reputation, rich experience in working with clients from different countries and extensive business ties in various Turkish cities and abroad.
Under the laws of Turkey, a company is required to register a head office in the country to be legally incorporated. There are two options here: you can opt for virtual or physical headquarters.
You can use a site owned by your company or lease it, which means that you will have to pay the rent and incur some extra costs, such as commissions or other fees.
Alternatively, you can get a virtual office. You will have a fully legal address, but not a physical location for your office.
You can rely on our experts’ assistance in both cases.
The minimum capital required to set up a company in Turkey equals TL 10,000 (LLC) or TL 50,000 (JSC).
You should know, however, that Turkish legislation deals with companies depending on their capital value, so this amount will not imply independence. TL 100,000 will give you additional rights, namely:
- To get a Turkish work permit (residence visa) in a simplified procedure
- To join such businesses as TURSAB (Association of Turkish Travel Agencies), MUSIAD (Independent Industrialists and Businessmen Association), etc.
- To conveniently export and import goods
You are not required to deposit this amount with the bank during the establishment procedure. Rather, you will have a 24-month period after the establishment date to deposit it, or do it right before filing for a work permit.
Best Organizational and Legal Forms in Turkey
From the total number of existing structures in Turkey, we suggest you to consider two most functional organizational and legal forms:
- Joint-Stock Company (Anonim Sirket (AS))
- Limited Liability Company (Limited Şirketi (LS))
These structures provide for limited liability of the company founders (beneficiaries). Despite similarities, JSC and LLC in Turkey differ significantly in terms of requirements and scope of activities.
Joint-Stock Company in Turkey
A Joint-Stock Company is more suitable for large manufacturing enterprises or trading organizations engaged in wholesale trade or production. If you set up a JSC, you can quickly and easily replace its participants if you need to. At the same time, you will not need to pay the proportional amount of the JSC authorized capital.
That is, the JSC will fully meet the requirements of a large business whose activities are related to attracting large capital. In this regard, the structure of a JSC provides for an unlimited number of shareholders, and can easily attract bank loans.
- A Joint-Stock Company in Istanbul requires at least one shareholder for registration. A JSC can be established by individuals and/or legal entities, including foreigners.
- The Turkish company (JSC) should have a registered office in the country of incorporation.
- You can open a Closed Joint-Stock Company (CJSC) or an Open Joint-Stock Company (OJSC). An OJSC has the right to trade its shares on the Turkish market, provided that they are registered on the Stock Market. A Turkish CJSC is not entitled to do so, but it can enjoy a number of other privileges, including the issue of bearer shares. A CJSC must provide a minimum share capital of 50,000 TL, while an OJSC requires a minimum share capital of 50,000 TL and a registered capital of 100,000 TL.
- Corporate shares determine the amount of JSC’s authorized capital and form the company’s working capital (securities).
- The minimum amount of the JSC’s authorized capital is at least 50,000 Turkish Liras represented in the form of shares with a nominal value of at least 1 Turkish Lira (TL).
- If the founder (foreigner) acts as a director of JSC and intends to actively carry out activities in Turkey, the declared JSC’s authorized fund should amount to at least 100,000 TL and must be fully paid.
- The amount of the authorized capital may be increased only after full payment of the company’s previously established limit.
- Joint-Stock Companies have two main authorized bodies: the General Assembly and the Board of Directors.
- The General Assembly (of Shareholders) adopts all important resolutions (amendment of the Articles of Association, auditor selection, company dissolution, etc.) by a majority of votes.
- The Board of Directors, the main governing body of the Turkish Joint-Stock Company, can appoint or remove the company director. If the company is set up by one individual, the functions of the Board of Directors and the Director of the JSC may be performed by one person. The sole Director can be a foreigner and is not required to be a Turkish resident.
- Shareholders may freely transfer their shares to others without approval of the General Assembly.
Note: If the company’s authorized capital is committed in cash (and not in the form of tangible assets), 1/4 of the authorized capital must be paid within 3 months from the date of the legal entity formation before the JSC is registered. The remaining part of the authorized fund may be deposited into the corporation’s account within 24 months. The payment schedule may be specified in the Articles of Association or determined by the Board of Directors.
Requirements for the Name of JSC
According to Turkish laws, the name of the Joint-Stock Company should meet the following requirements:
- bear no similarity to the registered names
- be submitted in Turkish or a foreign language
- end with “Anonim Sirket or AS”
- specify the company’s business objective
It is forbidden to use the words and phrases associated with the state such as Republic, National, Turkey, Turkish, in the names of companies. It is not allowed to mention licensed activities that are not related to the company business (bank, finance, insurance, etc.).
You need to obtain a work permit or appoint a nominee director (we will help with that) in order to do business in the Turkish domestic market.
Articles of Association
The Articles of Association is the principal organizational and legal document of the Joint-Stock Company which determines the basic conditions and activities of the enterprise.
The company’s Articles of Association are drawn up in Turkish, certified by a notary and registered in the Turkish Trade Register.
The Turkish legislation requires the following legal aspects to be set out in this document:
- Amount of the authorized corporate capital
- Passport data of the company founders, indicating the country of citizenship for each participant. If the founders are legal entities, the name of the enterprise and the legal address should be indicated
- All information about the shareholders, including their identities, addresses, contributions to the company’s share capital, and the number of shares they own
- Information on the company’s management (names, election and revocation procedure, their obligations and responsibilities)
- The period of time for which the company opens in Turkey
- Company business summary
- Procedure for JSC authorized capital contribution and principles of profit distribution
- Approved regulations for possible amendments in the legal clauses of the JSC Articles of Association
- Principles and procedures for enterprise management rules elaboration
- The procedure for holding General Meetings of Shareholders and meetings of the Board of Directors (time, place and frequency)
- Sample signatures of persons who have the decisive right to vote approved by the competent authority (this process is carried out in any trade registry offices in Turkey)
- Company name ending in Anonim Sirket (or AS)
- Information on the corporate office (physical or virtual) with an indication of the legal address
- Modifications that can be made to the company and dispute resolution
The Articles of Association should be executed in line with Commercial Code’s regulations. We at Offshore Pro Group can work out this document for your business (for a separate fee) in accordance with the Turkish legal norms under the guidance of experienced lawyers if you are an international investor looking to set up your business in Turkey.
Limited Liability Company
The second most popular Turkish entity is a Limited Liability Company (LLC), which is called Limited Sirket (LS) in Turkish. An LLC may be organized by one or more founders who in their turn may be individuals or legal entities.
The requirements for LLC formation are largely similar to the registration of JSCs, but we would like to highlight the following distinctive characteristics:
- The minimum number of founders is 1 (one), and the maximum number of founders cannot exceed 50 (fifty)
- The minimum authorized capital of an LLC is 10,000 TL (must be deposited at once, no installments allowed). An LLC is not obliged to deposit 1/4 from the total amount of the authorized capital on the account before the company is entered into the Register
- Each founder is personally liable for the unpaid debts of his share in the company’s authorized capital but is not liable for the debts of the other LLC participants
- LLC directors can include one or more nominees. However, in this case, at least one person from among the authorized founders should be a director
- The name of the LLC cannot coincide with the previously registered names of companies and should end with the words “Limited Sirket” or the abbreviation “LS”. Words related to the state should not be used, either
- LLC has a company contract registered in the trade registry at the place of its main office registration
- LLC shareholders are not liable for company debts and have to pay only the capital shares committed by them and make additional payments and fulfill performance obligations set out in the company contract. They are liable for public debt (tax liability, social security premium) on the basis of their capital share ratio
- Limited Liability Companies are not entitled to go public
- Like JSCs, LLCs are managed by the General Assembly and the Board of Directors – with pretty much the same powers and responsibilities
- Bearer shares cannot be issued
- Transfer of shares has to be approved by the General Assembly
- An obligation to have a website (introduced recently by the New Commercial Code)
Anonymous Ownership of a JSC or an LLC
If the beneficiary of a Turkish company does not want his name to be publicly known in order to protect his interests, we offer the service called Anonymous company ownership. It is an absolutely legal instrument that allows the beneficiary to stay in the shadow.
The service implies that the name of the company owner will not appear in the Articles of Association, extracts of the Chamber of Commerce and Industry, or the list of shareholders. Also, the beneficiary’s name will not be displayed in various types of contracts.
The cost of the Anonymous Company Ownership service is quite high and largely depends on the requests of the company owner, as well as other factors. The minimum price, excluding the cost of the company registration service, payment of state duties and fees, begins at USD 5,000.
List of Documents Provided by Individuals for JSC or LLC Registration
- a foreign passport
- four photographs
- certificate of residence with an apostille
- confirmation of the origin of funds (not always required)
Banks and registration authorities may also request additional information (including on family and commercial relations) as part of a serious struggle against the financing of terrorism and restrictions due to sanctions.
List of Documents Provided by Legal Entities – Founders of JSC or LLC
- Resolution of the Board of Directors (of a foreign company) to open a company in Istanbul, Turkey
- If the company is represented by an authorized person, provide a resolution of the Board of Directors that grants this person the right to act on behalf of a foreign company
- A copy of the foreign passport for the person who represents the interests of the foreign company
- Name and details of the Turkish tax authority that will control the newly established company
- Application form for registration of a JSC or an LLC in Turkey. You should have 3 copies, and all of them must be signed by an authorized representative
- Sample signature of the authorized representative certified by a notary public
- Power of Attorney in the name of the authorized representative which allows him to fully use the seal of the Turkish LLC or JSC
- Declaration of Incorporation of a Turkish company with the Chamber of Commerce and Industry. The Declaration must be signed by all participants (founders and authorized persons)
- Declaration providing information on: the name of the foreign company (Turkish founder), legal address of the head office, scope and area of activities, volumes of assets and their forms. In particular, indicate the registration number, the date of foreign company registration, and the country of tax residence. If the company belongs to the European Union, indicate all the necessary details and data of authorized representatives
- A foreign certificate that confirms registration of the foreign parent company
- An extract issued in the country where the foreign company is registered that contains the text of the Articles of Association, financial funds and tangible assets.
Note: All corporate documents of a foreign company must be translated into Turkish by a sworn translator (paid separately by the customer), notarized at the Consulate of Turkey in the country of the foreign founder, and apostilled.
Documents Required to Start a Business in Turkey
Our comprehensive services are provided by agreement with the client. The standard version of the contract with the customer for the company registration in Turkey is considered completed when the Principal or his representative is provided with a package of the following documents:
- Log (Yevmiye Defteri)
- General Corporate Book (Defteri Kebir)
- Inventory Book (Envanter Defteri).
- Share Accounting Book (Pay Defteri)
- Book of Minutes of Meetings of the Board of Directors (Genel Kurul Toplantı ve Müzakere Defteri)
- Document on JSC Registration of with the Tax Inspectorate (Vergi Levhası Çıktısı)
- Certificate Authorizing to Operate in Turkey (Faaliyet Belgesi)
- Certificate of JSC Office Registration (Oda kayıt sicil sureti)
The cost of a standard package of services for a Turkish company registration in Istanbul starts from USD 3,200 (plus VAT).
Company Registration Procedure in Istanbul with the Support of Professionals
- Contact our experts
- Discuss all the details and services required to register a company in Turkey
- Deposit 50% of the amount set
- Provide the documents according to the list (prepared by our managers)
- Wait until our experts complete the procedure of the legal entity formation and pay the remaining amount at the final stage
- Get your corporate documents and start your business in Turkey
Note: the amount of the advance payment made is not refundable if the client decided to cancel the services after we have launched the procedure jointly with our Turkish partners.
Interested in quick and hassle-free company incorporation in Turkey? Please contact us to discuss all the aspects with our Offshore Pro Group experts who use their professionalism and proficiency to propose the best solution available to foreign investors. It is essential to know the business direction and regulations of a foreign country before you invest in it, and Turkey is no exception.