How to Establish a Company in Turkey? What Legal & Other Aspects You Should Know

Choose the Type of Business Entity

The first decision when establishing a company in Turkey is to Choose the Type of Business Entity that best aligns with your investment goals, liability preferences, and operational scope. Turkey’s Commercial Code provides several entity structures. Understanding these options helps select a legal form that balances flexibility, tax implications, and governance requirements.

Limited Liability Company (LLC / Limited Şirket)

A Limited Liability Company (in Turkish, “Limited Şirket”) is the most common structure for SMEs and foreign investors. Shareholders’ liability is limited to their capital contribution. Requirements include:

• Minimum capital: A modest paid-in capital requirement.
• Shareholder count: Minimum one, up to fifty shareholders. Both individuals and legal entities can hold shares.
• Management: At least one manager (may be a foreign national or local resident). Manager handles daily operations.
• Taxation: Corporate income tax applies to profits; profits can be distributed as dividends subject to withholding tax. Transparent structure for investors.

The LLC is favored for its limited liability, straightforward governance (general assembly and manager decisions), and flexible capital contributions (cash or in-kind).

Joint Stock Company (JSC / Anonim Şirket)

A Joint Stock Company (“Anonim Şirket”) suits larger ventures, entities planning public offerings, or those requiring more complex capital structures. Key aspects include:

• Minimum capital: Generally higher than an LLC. Capital divided into shares.
• Shareholder count: Minimum one shareholder; no upper limit. Shares can be transferred more freely (subject to company bylaws).
• Governance: Board of Directors required; stricter formalities in general assembly meetings, annual reporting, and auditing if thresholds exceeded.
• Taxation: Corporate tax on profits; potential for broader investor base and issuance of share certificates.

JSC is ideal for businesses seeking external investment, venture capital, or preparing for an IPO. However, it involves more stringent compliance, auditing thresholds, and governance obligations.

Branch Office or Liaison Office

Foreign companies may establish a branch office or liaison office rather than a separate legal entity. Consider:

• Branch Office: Extends the foreign parent company’s activities in Turkey. The parent remains fully liable for obligations. No separate capital requirement, but requires parent company documents legalized and translated.
• Liaison Office: Permitted only for non-commercial activities (market research, liaison work). Cannot generate revenue directly. Suitable for exploring the Turkish market before full establishment.

Choosing these forms depends on the intended scope: if direct trading or contracting in Turkey is intended, a branch may be suitable; if only preliminary market presence is needed, a liaison office can serve as a stepping stone.

Other Forms: Partnerships and Sole Proprietorship

Turkey allows other structures like collective or commandite partnerships (more common with local partners) and sole proprietorships for individuals with Turkish residency. However, these forms may involve personal unlimited liability or are less common for foreign investors due to liability concerns.

In summary, to Choose the Type of Business Entity, assess factors such as desired liability protection, number of shareholders, capital requirements, governance complexity, and tax considerations. Consulting a legal advisor at this stage helps align entity choice with your strategic objectives and compliance obligations.

Choose a Company Name and Get it Approved

After selecting the legal entity, the next step is to Choose a Company Name and Get it Approved through Turkish trade registry authorities. A clear, compliant name avoids rejection and protects brand identity.

Name Selection Criteria

When you Choose a Company Name and Get it Approved, consider:

• Uniqueness: The name must not duplicate existing registered company names in Turkey. It should be distinguishable to avoid confusion with other entities.
• Legal Suffix: Include the entity type suffix, e.g., “Limited Şirket” or “Anonim Şirket,” to reflect the chosen structure.
• Language Requirements: While foreign words may be used, a Turkish equivalent or explanation may be required. Ensure the name does not conflict with Turkish public order, insults, or prohibited terms.
• Trademark Considerations: Conduct a preliminary trademark search to verify the name does not infringe existing trademarks. This reduces future disputes over brand rights.

Approval Process

The process to Choose a Company Name and Get it Approved generally involves:

1. Preparing a list of preferred names (usually 3 alternatives) that comply with naming rules.
2. Submitting these to the Turkish Trade Registry Office (through the Central Registration System – MERSIS) for availability check.
3. Receiving approval or feedback: If a name is unavailable, you use alternative options until one is approved.
4. Once approved, the official reservation is valid for a limited period (commonly a few weeks), during which you finalize other incorporation steps.

Timely name approval avoids delays in registration documents. Working with local consultants or online platforms can expedite the MERSIS application and ensure formatting aligns with system requirements.

Drafting Articles of Association (AoA)

A foundational document for any company is the Drafting Articles of Association (AoA). The AoA outlines company purpose, capital structure, management rules, shareholder rights, and decision-making procedures. Precise drafting is crucial for governance clarity and conflict prevention.

Essential Elements in AoA

When you begin Drafting Articles of Association (AoA), ensure inclusion of:

• Company Purpose (Objective): Clear description of activities permitted. Broad but realistic scope helps avoid needing amendments if expanding operations.
• Registered Office Address: Physical address in Turkey where official correspondence is received.
• Share Capital and Distribution: Total capital amount, nominal value of shares (for JSC) or quotas (for LLC), payment terms (cash/in-kind contributions), and deadlines for capital deposit.
• Shareholder Details: Names, identification, contribution amounts, and ownership percentages. Provisions for transfer of shares or quotas, pre-emptive rights, and restrictions if any.
• Management Structure: Appointment of managers (LLC) or board of directors (JSC), their powers, appointment/dismissal procedures, term of office, and representation authority.
• General Assembly Rules: Meeting quorum, voting thresholds for ordinary and extraordinary decisions, notice periods, and minutes preparation. Include electronic meeting provisions if permitted.
• Profit Distribution and Reserves: Rules on dividend distribution, mandatory reserves, and allocation of profits or losses among shareholders.
• Audit and Reporting: If audit is required by law or shareholders request voluntary audit, specify procedures; outline financial reporting standards and annual accounting periods.
• Transfer and Exit Mechanisms: Procedures if a shareholder wishes to transfer shares or exits the company, valuation methods, right of first refusal for remaining shareholders.
• Dispute Resolution: Choice of governing law (Turkish law) and forum (Turkish courts or arbitration) for internal or external disputes; mediation or arbitration clauses as needed.
• Dissolution and Liquidation: Conditions under which company may dissolve (e.g., unanimous decision, court order), and liquidation procedures to wind up assets and liabilities.

Customizing AoA for Your Business

While templates exist, Drafting Articles of Association (AoA) should be tailored to your specific business model and shareholder dynamics. For example:

• Investment Clauses: If planning multiple funding rounds, include provisions on capital increase, new share issuance, and anti-dilution rights.
• Intellectual Property: For technology companies, specify ownership of IP created by founders or employees and licensing to the company.
• Exit Strategies: For joint ventures with local partners, include buy-sell clauses or valuation formulas in case of partnership changes.
• Governance Flexibility: Balance between streamlined decision-making (especially in a small LLC) and checks-and-balances (for larger entities or JSCs).

Engaging a qualified Turkish legal advisor ensures Drafting Articles of Association (AoA) meets statutory requirements, reflects shareholder intentions, and anticipates future scenarios, reducing the need for frequent amendments.

Company Registration with Relevant Authorities

Once you Choose the Type of Business Entity, approve the name, and finalize AoA, proceed to Company Registration with Relevant Authorities. This formalizes your company’s legal existence in Turkey.

Registration via MERSIS

Turkey employs the Central Registration System (MERSIS) for company registration. Steps generally include:

1. Obtain MERSIS Number: Register in the system using shareholder identification details and company information.
2. Upload Incorporation Documents: Submit digitally signed versions of Articles of Association, shareholder declarations, manager appointments, and name approval certificate.
3. Pay Registration Fees: Fees for trade registry registration depend on entity type, capital, and region. Payment receipts are uploaded in MERSIS.
4. Notarization and Apostille/Legalization: For foreign documents (e.g., parent company documents for branches), ensure apostille or consular legalization and sworn translation into Turkish, then notarization in Turkey.
5. Trade Registry Office Submission: The trade registry reviews documents, may request clarifications, and upon approval issues the official trade registry certificate (Ticaret Sicil Gazetesi announcement).
6. Publication: Company details are published in the Turkish Trade Registry Gazette, making the registration public record.

After registration, obtain the tax identification number for the company automatically via MERSIS integration and register with the tax office. Next, register with the Social Security Institution (SGK) if you plan to hire employees. If the business falls under sector-specific regulatory bodies (e.g., banking, healthcare), submit required notifications or licenses as described below.

Post-Registration Notifications

Following Company Registration with Relevant Authorities, complete:

• Tax Office Registration: Finalize corporate tax ID, VAT registration if applicable, and notify about business activities.
• Social Security Registration: Enroll the company and employees in social security schemes.
• Municipal Notifications: For certain businesses (e.g., food service, retail), notify local municipality for health and safety inspections or business permits.
• Chamber of Commerce Registration: Register membership in the relevant Chamber of Commerce or Industry as mandated by law.

Completing these registrations ensures compliance and allows the company to operate legally, issue invoices, and enter into contracts.

Obtaining licenses and Permits for your Company

After Company Registration with Relevant Authorities, certain businesses must Obtaining licenses and Permits for your Company before commencing operations. Licensing requirements depend on industry, activity scope, and location.

Identify Sector-Specific Requirements

Determine if your business falls under regulated sectors such as:

• Food and Beverage: Health and hygiene permits from municipal health directorates, food production facility approvals.
• Pharmaceuticals and Healthcare: Licensing from the Turkish Medicines and Medical Devices Agency, accreditation for clinics or hospitals.
• Finance and Insurance: Permissions from Banking Regulation and Supervision Agency (BDDK) or Capital Markets Board (SPK) for financial services, brokerage, or insurance operations.
• Transportation and Logistics: Transport licenses, customs brokerage permits, or maritime authority approvals.
• Construction and Real Estate Development: Building permits, zoning approvals, environmental impact assessments, and occupancy certificates.
• Education and Training: Ministry of National Education or Higher Education Council approvals for schools, training centers, or universities.
• Telecommunications and IT: Licenses from Information and Communication Technologies Authority (BTK) for telecom services, data centers, or electronic communications.
• Energy and Natural Resources: Permits from Energy Market Regulatory Authority (EMRA) for generation, distribution, renewable energy projects, or mining activities.

Application Process and Documentation

For Obtaining licenses and Permits for your Company, generally:

1. Preliminary Consultation: Engage legal or consultancy firms specializing in the sector to identify required permits, application timelines, and documentation checklists.
2. Prepare Technical and Legal Documents: Submit feasibility studies, technical specifications, safety reports, financial guarantees, and proof of company registration.
3. Submit Applications to Relevant Authorities: Use online portals where available or deliver documents in person. Track applications through authority systems.
4. Inspection and Compliance Visits: Some authorities conduct site inspections or audits before granting the license. Ensure premises and processes meet standards.
5. Approval and Issuance: Once criteria are satisfied, the authority issues the permit or license, often valid for a specific period and subject to renewal conditions.
6. Renewal and Ongoing Compliance: Maintain compliance with reporting obligations, renew licenses before expiration, and adapt to regulatory updates to avoid penalties or suspension.

Timely Obtaining licenses and Permits for your Company prevents operational delays and legal risks. Early engagement with experts and clear project planning are essential for efficient approvals.

Open Bank Account for Your Company in Turkey

A crucial operational step after Company Registration with Relevant Authorities and Obtaining licenses and Permits for your Company is to Open Bank Account for Your Company in Turkey. A corporate bank account enables you to manage finances, receive payments, and comply with tax and accounting requirements.

Prepare Required Documentation

To Open Bank Account for Your Company in Turkey, gather:

• Trade Registry Excerpt: Official registration certificate showing company name, legal form, and registration date.
• Tax Identification Certificate: Corporate tax ID obtained after registration.
• Articles of Association and shareholder details: To verify company structure.
• Signature Circular or Board Resolution: Authorizing designated signatories (managers or directors) to open and operate the account.
• Identification of Authorized Signatories: Passports or Turkish ID cards of individuals authorized to transact for the company.
• Proof of Address: Company’s registered office lease agreement or title deed, and personal address proof for signatories.
• Licenses or Permits (if required): Some banks may ask for evidence of necessary sectoral licenses to confirm legitimacy of business activities.
• Financial Statements or Bank References: For established companies, banks may request prior financial records or references from other banks to assess creditworthiness.

Selecting the Right Bank and Account Type

When you Open Bank Account for Your Company in Turkey, consider:

• Bank Reputation and Branch Network: Larger banks offer extensive branch coverage and robust digital banking platforms.
• Corporate Services: Look for banks providing corporate internet banking, multi-currency accounts, trade finance instruments (letters of credit, guarantees), and dedicated relationship managers.
• Fee Structures: Compare account maintenance fees, transaction charges, international transfer costs, and minimum balance requirements.
• Foreign Currency Needs: If your company deals with import/export, ensure the bank offers foreign currency accounts and efficient forex services.
• Online and Mobile Banking: For streamlined operations, choose banks with reliable English-language interfaces and secure two-factor authentication.

Account Opening Process

The procedure to Open Bank Account for Your Company in Turkey typically involves:

1. Appointment Booking: Schedule a meeting with corporate banking division or relationship manager.
2. Document Submission: Provide originals or notarized copies of required documents. For foreign parent companies, ensure documents are apostilled and translated into Turkish by sworn translators.
3. Compliance Checks: Banks perform AML/KYC due diligence, verifying beneficial owners and business activities. Be prepared to provide additional clarifications if requested.
4. Initial Deposit (if required): Some banks request a nominal deposit to activate the account. Confirm the amount in advance.
5. Account Activation: Once due diligence is complete, the bank issues account details, corporate debit cards, and online banking credentials. Set transaction limits and authorization workflows per company policy.

Post-Opening Best Practices

After you Open Bank Account for Your Company in Turkey:

• Link Accounting Systems: Integrate the corporate account with accounting or ERP software for automated reconciliation and financial reporting.
• Define Authorization Protocols: Establish internal controls for who can initiate and approve transactions to prevent unauthorized activity.
• Monitor Cash Flow: Use online banking alerts to track incoming payments, outgoing invoices, and maintain sufficient balances for payroll and expenses.
• Leverage Banking Tools: Explore trade finance services, overdraft facilities, or investment products offered by the bank to optimize working capital management.
• Maintain Updated Records: Promptly inform the bank of any changes in authorized signatories, shareholding structure, or company address to comply with AML/KYC obligations.

Conclusion

Establishing a company in Turkey requires a clear roadmap and adherence to legal and procedural requirements. This guide on How to Establish a Company in Turkey? What Legal & Other Aspects You Should Know? covered essential steps: Choose the Type of Business Entity suited to your liability and growth objectives; Choose a Company Name and Get it Approved through MERSIS; Drafting Articles of Association (AoA) tailored to governance needs; Company Registration with Relevant Authorities including trade registry, tax office, and social security; Obtaining licenses and Permits for your Company according to sector-specific regulations; and Open Bank Account for Your Company in Turkey to manage finances and comply with accounting obligations.

Each phase demands attention to detail: ensuring compliance with Turkish Commercial Code, translating and legalizing documents if foreign, engaging qualified legal and financial professionals, and maintaining organized records. By following this structured approach and integrating SEO-friendly keywords naturally into documents and online presence, entrepreneurs can not only satisfy regulatory requirements but also enhance visibility for potential partners or clients searching for guidance on company formation in Turkey. Proper planning, professional support, and proactive compliance turn the establishment process into a strategic advantage, enabling your new company to thrive in Turkey’s dynamic market.