Set Up a Limited Company in Turkey in 2023

How can I open a company in Turkey ASAP and with as little investment as possible in 2023? Can I get a residence permit for setting up a company in Turkey?

One of the most popular and low-cost forms of business registration in Turkey is LLC (Limited Liability Company). Let’s find out what it is, and how a foreign citizen can register a limited liability company in Turkey, and how much it costs to open a company according to the new rules.

Register a Company (LLC) in Turkey. General requirements

The employment procedures and commercial operations of Turkish companies are regulated in accordance with the New Turkish Commercial Code (TCC) adopted and approved on January 13, 2011. An LLC is considered to be registered if a record of the company formation is made in the Trade Registry of Turkey. 

Among the mandatory requirements and conditions for the registration of a limited liability company or other form of business in Turkey are the following:

• registration in the Trade Registry and publication of the entry in the national gazette;
• a unique company name in Turkey;
• a Turkish company registered by a foreign or local person is required to have a permanent address in the territory of the state, i.e. a rented office (it can be virtual) or an owned one, including home office which is allowed for certain types of activities.

According to Article 421 of the TCC, it is allowed to redomicile a company to another country if the receiving jurisdiction allows this transfer. The same procedure can be applied in the reverse order. A company can be redomiciled from a foreign country to Turkey. In this case, one will need to undergo all the stages of the official company registration regardless of the type of activity. This also applies to joint stock companies with concealed beneficial owners.

Is LLC and Sole Proprietorship in Turkey the Same Thing?

This statement is not quite right, but it is often used in many articles, including Turkish laws. Let’s have a look at the difference between an LLC (a legal entity) and a sole proprietorship (of a natural person:

• LLC in Turkey is defined as a legal entity with a separate account and company name. Here are the main aspects of a legal entity as opposed to a natural person (sole proprietor) in Turkey:
  • The number of founders of a legal entity (LLC) in Turkey can be at least 1 person, including non-residents (companies or natural persons).
  • Having a corporate account, just like a company name, is a must.
  • A company, a legal entity (LLC) is registered with the Chamber of Commerce of Turkey.
  • A foreign founder cannot hire themselves to work for their company and issue a relevant invitation, so they need to hire at least 5 people (Turkish nationals or foreigners with residence permits) or obtain Turkish citizenship.
  • LLC as a legal entity is better suited for medium-sized businesses that plan to expand in the future and aim to increase their revenues. 
• GERÇEK KİŞİ is a real person/vendor who actually is a sole proprietor in Turkey. They can be of foreign origin. But they need to have a residence permit and a work permit. This form of business planning is suitable for small businesses, private home businesses and provides the following:
  • Registration with the Turkish Revenue Administration as a natural person.
  • Computation of income tax of sole proprietors (GERÇEK KİŞİ) involving a personal account.
  • Such a Sole Proprietor has no special name and is identified by a code number (tax number).
  • Sole Proprietor capital turnover is at least 100 TL.
  • There is no need to have an accountant and file reports if the conditions on the annual revenue are met (check with the MERSIS specialists).
  • Online Sole Proprietorship registration in Turkey is available.

There are certain restrictions on the type of business as opposed to a legal entity (LLC).

It should also be noted that being an LLC founder, foreign nationals may open a personal account in Turkey apart from the corporate account. In this case, the assets in the account of the legal entity (LLC) will be reflected in the statements and accounted for taxation, and the personal bank account can be used for other transactions. When registering GERÇEK KİŞİ, all financial flows are accumulated in a single wallet of the natural person.

Company (LLC) in Turkey. Registration under the New Rules in 2023

On May 15, 2018, new rules for business registration were introduced in Turkey for foreign and local business persons. What has changed and is there a reason to be happy?

Here are two new items that made business persons happy:

• The authorized capital in the total amount of not less than 10,000 TL, and the original contribution of not less than 25% of it shall be paid in the following order:
  1. 25% of the authorized capital shall be paid within the first year of operation.
  2. The remainder shall be paid during the following 2 years of operation.
  3. In case of work visa, the authorized capital shall be paid in full before the LLC registration.
• Company registration in Turkey is done via the Chamber of Commerce, and the notary only certifies the signature of the CEO for the banks and government agencies. The single-window system of company registration also simplifies the whole process.

Further amendments that every potential foreign investor wishing to open a business in Turkey in 2023 should be aware of are related to opening a bank account.

It is not possible to open a bank account for a legal entity with Turkish banks without a work visa, residence permit or Turkish citizenship. One can get a residence permit which will take 2 to 3 weeks, or choose an alternative solution, which is to appoint a Turkish citizen as a professional executive director.

What are the benefits of this? What are the potential risks? Executive director with the signatory right is a conditionally temporarily authorized person that is needed solely for opening a bank account for an LLC in Turkey. Upon completion of the company registration procedure in Turkey, they can be discharged or demoted while retaining the right to represent the company before tax, government and other authorities without signatory rights with the bank.

Business Immigration and Residence Permits in Turkey. New Rules in 2023

Registration of business in the Republic of Turkey gives you the right to a residence permit only if the number of your employees is 50 or more. It should also be taken into account that in order to start a business in Turkey and become a full-fledged LLC owner as a non-resident, the founder needs a work permit (at least). Otherwise they will need to apply for Turkish citizenship.

What are the new rules of immigration, moving for temporary and permanent residence to Turkey as well as business visas in 2023? Here they are:

• Residence permit by property investment starting from 400,000 USD is a new program that took effect in Turkey in June 2022.
• Registration of a company in Turkey gives you the right to citizenship if your official staff is 50 people or more.
• If you have a deposit in a Turkish bank and it is 500,000 USD without withdrawals within 3 years, you can also apply for a long-term residence permit, and subsequently for a Turkish passport.
• Yet another investment program in Turkey is a contribution of 500,000 USD to mutual funds or real estate funds.

Turkey and a number of other countries offer alternative solutions with a positive environment for living and business planning in 2023.

Company (LLC) in Turkey. Rights, Responsibilities and Requirements

One of the most common Turkish business structures is LLC or Limited Sirket (LS) in Turkish. This form of business can be registered by a natural person or a legal entity including non-residents of the republic.

Limited Liability Company (Limited Sirket) in Turkey is rather similar to sole proprietorship. This form is good for small and medium-sized businesses with a registered capital of up to 100,000 USD.

The requirements for forming an LLC in Turkey in 2023 by foreign nationals or legal entities are similar to the formation of a Joint Stock Company except for a number of points:

• The number of founders can be 1 to 50 persons.
• The minimum size of share capital is 10,000 TL.
• Company founders are liable within the limits of their share in the share capital. They are not liable for the debts of the other members of the company.
• Free transfer of shares is prohibited and it only takes place upon a decision made by a majority vote at the general assembly.
• There is no obligation to deposit ¼ of the share capital in the company’s account before its registration in the Registry.
• The board of directors includes one or more persons. One of them needs to be a founder of the company.

Register a Company in Turkey in 2023. A Guide for Foreign Investors

The procedure for registration of LLCs in any city of Turkey in 2023 is just  the same and it only differs in terms of legal entities and natural persons acting as founders. 

Registration of LLC, JSC, SP and other organizational forms of business remains a relevant topic and advantageous trend for building a business or redomiciling a company from other countries/territories to the  Mediterranean, namely to Turkey.

Documents Required to Set Up a Company (LLC) in Turkey (for natural persons)

What documents need to be submitted to the Trade Registry of Turkey by a foreign natural person to register a limited liability company in Turkey in case of applying in person or via a representative?

• passport of each founder;
• photographs in the required format;
• confirmed financial standing;
• apostilled proof of residence.

In order to register an LLC or a sole proprietorship in Turkey, it is necessary to obtain a work visa or to hire a local director. This service is  available from our partners in Turkey.

Documents Required to Set Up a Company (LLC) in Turkey (for legal entities)

For a legal entity (foreign company), the list of documents for opening a limited liability company in Turkey needs to be extended and includes the following:

• Decision of the Board of Directors to open a company in Turkey (Istanbul, Ankara, Antalya, etc.).
• Decision of the Board of Directors on the transfer of powers to a representative.
• Copies of passports of all founders, including the representative of the foreign company.
• Tax number of the company (LLC) and the name of the tax authority controlling the payments.
• Application in the required form for opening an LLC in Turkey, indicating the city.
• Notarized signature of the authorized representative in Turkey.
• Power of attorney for a person representing the founders in the Chamber of Commerce and other agencies of the country, with the signatory right.
• Declaration of LLC registration with the Chamber of Commerce (all founders must sign the document).
• 4 photos of each director.
• Registered address of LLC, name, type of business, volume and form of assets, company registration number should be spelled out in a separate document.
• Certificate confirming registration of the foreign entity which is the founder of newly established LLC.
• License for the licensed type of business in Turkey.
• Articles of Association of the company, confirmation of its financial and tangible assets.

How Much Does It Cost to Open an LLC in Turkey in 2023?

What is included in the cost of LLC registration in Turkey by a foreign person in 2023? How much is it? It all depends on the foreigner’s knowledge of local laws, access to the jurisdiction’s institutions and fluency in Turkish. 

If we talk about the company formation with the support of our experts, the amount indicated in the contract (from 9500 EUR) includes the following services:

• Contribution to the country’s anti-monopoly authority in the amount of 0.04% of the authorized capital.
• Payment of the state duty at the Chamber of Commerce.
• Obtaining a tax number.
• Opening an account with a bank in the jurisdiction.
• Preparation of all the books of the newly-established LLC and their handing over to the representative of the company.
• Obtaining a certificate allowing business operations in Turkey.
• Registered address of the company, including assistance in renting premises for a separate fee. 

Translations, apostilles, accounting services, market research and legal consulting services are not included in the total cost of the company registration set carried out by our partners in Turkey. These are provided for a separate fee. 

You can also count on comprehensive support from our Turkish partners which includes company maintenance in Turkey (training, analytics, consulting and other services). Should you have further questions, please feel free to contact us at info@offshore-pro.info.

Company Formation in Turkey. Professional Assistance and Support

Turning to the experts of International Wealth, you get guaranteed assistance of top-quality professionals in legal, investment and other business matters related to company registration in Turkey. In addition to business registration in Turkey, we offer opening  accounts with offshore banks, as well as the choice of jurisdictions for permanent residence, investments and business immigration.

Should you wish to set up a business in one of the regions of the Republic of Turkey in 2023, you just need to follow a few simple steps:

• Contact us at info@offshore-pro.info, expressing your expectations, questions, and the purpose of your request.
• Receive a reply from our experts and discuss all the details of our work including extra services.
• Send us the documents requested by our Turkish partners, necessary for LLC registration in Turkey.
• Sign the contract and make a 50% prepayment on the invoice issued and approved by the parties (we accept any currency including Bitcoin).
• Wait for the completion of company registration carried out by our partners and come to Turkey in person to sign the documents.

The account balance is handed over in person at the final stage or deposited into a designated account.