Complete Details of Turkish Business Law in 2025

Complete Details of Turkish Business Law in 2025. Turkey’s rapidly developing economy, strategic geographic location, and investment-friendly policies have made it a focal point for international business ventures. To succeed in this environment, it is essential to understand the Turkish business legal framework, including company formation, investment regulations, taxation, and dispute resolution procedures. This article provides a comprehensive overview of the key aspects of Turkish business law, helping foreign investors and entrepreneurs navigate the legal landscape with confidence.

Core Principles of Turkish Business Law

Turkish business law is built on the foundations of the Turkish Commercial Code (TCC), which is harmonized with European Union standards. The TCC emphasizes transparency, corporate governance, and accountability. It applies to both domestic and foreign enterprises engaged in commercial activities within Turkey. Understanding these core principles is the first step in successfully entering the Turkish market.

Business Entity Types and Formation Requirements

Foreign investors can establish a variety of business structures in Turkey, each offering different advantages based on operational needs and long-term goals.

Limited Liability Companies (LLC)

The most common choice for small and medium-sized businesses, Limited Liability Companies (LLCs) require only one shareholder and a minimum capital of TRY 50,000. They offer flexibility in management, limited shareholder liability, and simplified reporting obligations.

Joint Stock Companies (JSC)

Joint Stock Companies (JSCs) are suitable for large-scale operations and are often used when preparing for public offerings. They require a minimum capital of TRY 250,000 and must have at least one shareholder. JSCs are subject to stricter reporting, auditing, and corporate governance rules.

Branch Offices and Representative Offices

Foreign companies may establish branch offices to carry out full commercial activities under the parent company’s name or open representative offices solely for market research and promotional purposes, without engaging in commercial transactions.

Foreign Investment Regulations and Incentives

Turkey welcomes foreign direct investment (FDI) and provides a level playing field for international and domestic investors. The Foreign Direct Investment Law ensures that foreign investors are treated equally and may freely transfer profits, dividends, and other earnings.

Investment Screening and Approval Processes

While Turkey does not generally require pre-approval for foreign investment, sectors such as broadcasting, aviation, and defense may be subject to specific screening processes. It’s essential to consult legal professionals familiar with Turkish regulations.

Investment Incentive Programs

The Turkish government offers numerous investment incentive programs, including tax reductions, VAT exemptions, customs duty exemptions, and support for employment and R&D. These incentives vary depending on region, sector, and investment size.

Corporate Governance and Compliance Obligations

Corporate governance is crucial in the Turkish business environment. The TCC imposes rules to protect shareholders, promote transparency, and enhance investor confidence.

Board Structure and Management Requirements

Companies are required to have a board of directors. JSCs must have at least one director, while LLCs can be managed by one or more managers. Board members are responsible for legal compliance, strategic decisions, and financial oversight.

Financial Reporting and Audit Requirements

All companies must maintain accurate financial records. JSCs and larger LLCs are subject to independent audits under Turkish Accounting Standards (TAS), aligned with IFRS. Timely financial reporting is essential for compliance and transparency.

Contract Law and Commercial Transactions

Contracts in Turkey are governed by the Turkish Code of Obligations. They must comply with basic legal principles such as mutual consent, lawful content, and clarity of purpose.

Essential Contract Elements

Each contract must include clear identification of the parties, subject matter, obligations, payment terms, dispute resolution mechanisms, and applicable law. While written contracts are preferred, verbal agreements can be legally binding under Turkish law.

International Trade Considerations

Turkey’s customs union with the EU and membership in international organizations such as the WTO facilitate trade. Exporters and importers must adhere to customs regulations, trade compliance rules, and technical standards depending on the sector.

Employment Law Compliance

Turkish employment laws safeguard workers’ rights and outline employer obligations. Understanding these rules is essential for building a compliant workforce.

Hiring and Employment Contracts

Employers must draft written employment contracts covering job responsibilities, compensation, working hours, and benefits. Employees must be registered with the Social Security Institution (SGK).

Termination and Severance Requirements

Terminating an employee requires just cause or valid business grounds. Employers must provide notice or severance pay depending on the length of service and the reason for termination. Unjust dismissal claims may result in court-ordered compensation.

Intellectual Property Protection

Protecting intellectual property (IP) is vital for safeguarding brand identity and innovation in the Turkish market.

Trademark Registration and Protection

Trademarks must be registered with the Turkish Patent and Trademark Office (TURKPATENT) to gain protection. Owners can prevent unauthorized use and enforce rights through civil or criminal proceedings.

Patent and Technology Protection

Innovations may be protected through patents, utility models, and industrial design registrations. Turkey is a party to major international IP treaties, offering broader protection for foreign applicants.

Tax Implications and Planning Strategies

Understanding the tax environment is crucial for budgeting, compliance, and maximizing returns.

Corporate Income Tax Structure

Corporations in Turkey are subject to a standard corporate income tax rate of 20% (subject to changes based on annual budget laws). Legal entities must file annual returns and make advance tax payments throughout the year.

Value-Added Tax Compliance

Value-Added Tax (VAT) is levied on goods and services at rates ranging from 1% to 20%. Businesses must register for VAT, issue invoices in compliance with regulations, and file monthly VAT returns.

Dispute Resolution and Legal Procedures

Legal disputes in Turkey can be resolved through judicial or alternative mechanisms. Efficient resolution strategies are key for maintaining operations and protecting rights.

Commercial Court Procedures

Commercial disputes are handled by specialized commercial courts. The process involves written submissions, evidentiary hearings, and expert opinions. Enforcement of judgments can be pursued through execution courts.

Alternative Dispute Resolution

Alternative Dispute Resolution (ADR) mechanisms such as arbitration and mediation are increasingly popular due to their efficiency and confidentiality. Turkey is a party to the New York Convention, facilitating international arbitral award enforcement.

Sector-Specific Regulations and Opportunities

Turkey offers strategic opportunities across a range of sectors. Understanding specific regulations can provide a competitive edge.

Technology and Digital Economy

With a booming tech ecosystem, companies operating in e-commerce, fintech, and AI must comply with laws on data protection, digital taxation, and cybersecurity. The Personal Data Protection Law (KVKK) is modeled after the GDPR.

Manufacturing and Industrial Operations

Manufacturers benefit from industrial zone incentives, customs advantages, and logistics networks. Environmental regulations, occupational health, and labor laws must be observed in these sectors.

Future Outlook and Strategic Considerations

Turkey’s business legal framework is evolving to match global standards. With digital transformation, legislative harmonization with the EU, and increased transparency, Turkey is becoming an even more attractive destination for long-term investment.

Key Aspects of Turkish Business Law

• Transparent and investor-friendly legal environment
• Flexible corporate structures for domestic and foreign investors
• Clear IP protection and contract enforcement mechanisms
• Tax advantages and sectoral incentives
• Efficient dispute resolution systems and court procedures

Why Choose Ongur & Partners International Law Firm?

As a leading international law firm in Turkey, Ongur & Partners provides expert legal counsel in business law, corporate structuring, tax planning, IP protection, and litigation. We specialize in offering strategic legal support to international clients seeking to establish and grow their businesses in Turkey.

Reach Our Turkish Business Commercial Lawyers

Whether you are planning to launch a startup, expand your corporation, or resolve a legal issue, our experienced Turkish business commercial lawyers are here to help. Contact Ongur & Partners today for tailored legal solutions that align with your goals and ensure full legal compliance in Turkey.