Opening a company in Turkey is an attractive opportunity for both local entrepreneurs and foreign investors. The country offers a wide range of business opportunities, a favorable tax climate and openness to foreign investment. Let us tell you about the requirements and necessary procedures for opening a company in Turkey

Doing business in Turkey allows residents to avoid double taxation thanks to agreements with 87 states, and the Customs Union with the EU facilitates trade with Europe. The government of the Republic of Turkey allows foreigners to carry out commercial activities under the same conditions as citizens of the state. How to open a company in Turkey, and what you need for this - read further in the article. 

Types of companies in Turkey 

In Turkey, foreign individuals and legal entities have the opportunity to create different types of companies according to the legislation on foreign direct investment. The Law on Commercial Activities defines five main forms of companies:

1. Limited Liability Company 

2. joint stock company 

3. partnership, or collective company 

4. limited liability partnership 

5. Cooperative 

According to statistics, about 95% of all companies in Turkey are registered as limited liability companies or joint stock companies (LLCs and JSCs). The most popular among them is the limited liability company.

Limited Liability Company 

Limited Liability Company (LLC) in Turkey may have one or more founders, but their number should not exceed fifty. The meeting of the founders forms the board of directors, which may include both Turkish citizens and foreigners. 

By law, at least one of the directors must be a founder of the company. This condition is aimed at supporting the local labor market. 

Foreign founders without Turkish citizenship are required to obtain a work visa or citizenship to hold the position of director. To obtain a work visa, it is necessary to increase the authorized capital of the company to 100,000 TL (about $5,640) and hire at least five Turkish citizens.

If the investor does not plan to personally manage the company, a Turkish citizen can be hired as a director and given a nominal share in the authorized capital. Such measures protect the interests of the local labor market and promote foreign investment in the country.

Joint Stock Company

A joint stock company (JSC) in Turkey can be either non-public or public. A non-public JSC has the right not to disclose the financial results of its activities, while the shares of this type of company can be freely bought and sold, but not through the stock exchange. 

In turn, a public JSC places its shares on the stock exchange and is obliged to disclose its financial results. The minimum share capital of a public JSC is twice as much as that of a non-public JSC.

The directors of a joint stock company may include both shareholders and independent persons elected by the general meeting of shareholders. Turkish citizens and foreigners can hold the position of directors in JSCs. 

Some activities such as banking, insurance, retail and others require prior approval from the Turkish Ministry of Commerce before opening a company or amending its articles of association. This is required under the Capital Markets Law No. 6362. 

Turkish citizenship by investment for the founder of a company 

Obtaining Turkish citizenship through investment is an attractive opportunity for foreign investors, especially if they plan to establish a company in Turkey. 

If an investor who is the sole founder registers a limited liability company in Turkey, he/she holds the position of director under the Commercial Code. An investor without Turkish citizenship needs to obtain a work visa or a second Turkish citizenship to act as a director of the company.

The citizenship-by-investment program offers several options, among which the most popular is the purchase of real estate for an amount of $400,000 or more. This can be not only a way to obtain citizenship, but also an investment with potentially high returns, given the rise in real estate prices in the country and the possibility of renting it out with an income of 5 to 15% per annum. In this case, most investors prefer to buy business class apartments in the tourist center of Turkey - Antalya.

The process of obtaining citizenship through investment usually takes from 6 to 8 months and includes fulfillment of investment conditions, passing the government security check and obtaining a passport. It is important to note that the investor's family members, including spouse and children under the age of 18, can also obtain citizenship.

This path to citizenship can also open up additional travel opportunities, as Turkish citizens are eligible for five-year Schengen and U.S. visas, including E-2 business or tourist visas.

Benefits of starting a business in Turkey

Starting a business in Turkey represents a promising investment opportunity for investors and entrepreneurs due to its stable economic environment, government support, and access to international markets.

A few key advantages that are attracting more entrepreneurs to Turkey:

1. Rapid economic growth: With the economy growing at 10% in 2021, Turkey has demonstrated its ability to grow dynamically, which creates a favorable business environment.

2. Export incentives: The Turkish government's support for exports promotes international trade and creates more opportunities for entrepreneurs.

3. Low Unemployment: A stable unemployment rate (10%) ensures the availability of skilled labor for businesses.

4. Duty-free trade with the European Union: A free trade agreement with the European Union provides entrepreneurs access to a large market without trade barriers.

5. Free Economic Zones: The existence of 18 free economic zones with special taxation and customs control regimes creates a favorable environment for the development of various sectors of the economy.

Free economic zones for companies in Turkey

Free Economic Zones (FEZ) in Turkey are special areas where companies can do business with a number of tax and customs benefits. Here are the main advantages of companies operating in free economic zones:

1. Income Tax Exemption: Companies residing in FEZs are exempt from paying income tax on exported goods. This significantly reduces the tax burden and increases the profitability of the business.

2. income tax exemption for employees: If a resident company exports at least 85% of its products, its employees are exempt from income tax. 

3. exemption from real estate tax: FEZ residents are not subject to real estate tax on the territory of free economic zones. This allows to reduce operating costs and improve the financial position of companies.

4. VAT exemption: Goods supplied to FEZ from Turkey are exempt from VAT. Also, goods exported from FEZ or from other territory of Turkey are exempted from VAT. This allows companies to reduce the cost of production and increase their competitiveness in the global market.

How to register a company in Turkey?

1.Preparation of necessary documents:

Documents issued outside of Turkey are required to be apostilled to confirm their authenticity. These documents then need to be translated into Turkish and notarized by a notary in Turkey. 

For founding individuals, an original and 2 copies of a passport or residence permit card in Turkey, as well as 2 copies of specimen signatures will be required. 

Legal entities must provide an extract from the register of legal entities of their country, copies of the resolutions on opening a subsidiary company in Turkey and on appointing a company representative on the board of directors, as well as a power of attorney for the authorized representative. 

Board members who are not among the founders or shareholders must provide an original and a copy of a passport, residence permit card or Turkish passport, as well as 2 copies of specimen signatures.

2. Obtaining Turkish TIN:

Foreign citizens can obtain a taxpayer number in Turkey through the tax office's e-services website. A valid passport is sufficient for this purpose.

3. Creation of constituent documents in MERSIS system:

Constituent documents are generated and submitted electronically in the MERSIS Central Registration System. The founders indicate the company name, legal address, fill in the forms in Turkish and send the application for registration. The system assigns a provisional TIN for account opening.

4. Company registration at the Trade Registry office:

Company registration is done at the Trade Registry office through a one window system. Registration takes up to one hour without taking into account the preparation of documents. The incorporation documents are printed from MERSIS by the Trade Registry Officer, checked, certified and registered.

The following documents will be required to register a company in Turkey:

- Application for registration.

- Certificates of Incorporation in the number of 4 copies.

- Original and 4 copies of the memorandum of association or shareholders agreement.

- Receipts for depositing 0.04% of the share capital to the account of the Antimonopoly Service.

- 2 copies of specimen signatures of the members of the board of directors.

- Original copy of the articles of association of the company.

- Registration form with the Chamber of Commerce and Industry.

- Written consent to take office from the members of the board of directors from outside the founders and shareholders.

- For companies contributing assets rather than money to the authorized capital, an asset valuation report, proof of ownership and asset transfer agreements will be required.

5. Confirmation of registered office and registration with the Social Security Service

The commercial register notifies the tax office of the company's registration and sends the taxpayer number. The tax officer confirms the registered office address at the company's office, and then the company is registered with the Social Security Office and receives a taxpayer registration number.

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Daria Rogova - Head of Insurance at Visit World

To move, travel or work safely in a new country, you will need travel insurance. You can apply for an extended policy on our website here.

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Products from Visit World for a comfortable trip:

Checklist for obtaining a visa and necessary documents in Turkey;

Legal advice on immigration in Turkey;

Insurance for residence permit in Turkey.

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Real estate in Turkey - is it still an attractive investment destination in 2024?

Tourist real estate: prospects and opportunities for investors.