How to Establish Company in Turkey Successfully in 8 Key Steps

How to Establish Company in Turkey Successfully in 8 Key Steps. Selecting the appropriate legal form is the very first and most critical decision when establishing a company in Turkey. Your choice of structure affects liability, taxation, governance, and even the perception of customers and partners.

Why Business Structure Matters in Company Establishment?

The business structure matters because it determines:

• Liability Exposure: Whether shareholders’ personal assets are at risk.

• Capital Requirements: Minimum paid-in capital thresholds and ability to attract investors.

• Management and Governance: Board vs. partner decision-making and statutory compliance.

• Tax Treatment: Corporate tax rates, withholding taxes, and possibilities for loss offset.

• Ease of Expansion: Ability to bring in new shareholders, issue shares, or convert into different entities.

Choosing unwisely can saddle you with unnecessary compliance obligations or restrict growth.

Popular Options for Foreign Entrepreneurs While Establishing Company in Turkey

Foreign investors typically choose among these common structures:

1. Limited Liability Company (Ltd. Şti.)

   • Capital

   • Shareholders: 1–50 natural or legal persons.

   • Liability: Limited to paid-in capital.

   • Governance: Managed by one or more appointed managers.

2. Joint Stock Company (A.Ş.)

   • Capital: Minimum TRY 50,000, 25% paid at incorporation.

   • Shareholders: No upper limit.

   • Liability: Limited to subscribed capital.

   • Governance: Board of Directors and a General Assembly; mandatory auditor and independent committees for large companies.

3. Branch Office

   • Legal Status: Not a separate juristic person; liabilities attach to parent company.

   • Capital Requirements: No minimum capital but must prove financial capacity.

   • Scope: Conducts the same business as the parent, but profits are repatriated directly.

4. Liaison Office

   • Purpose: Limited to market research and promotional activities.

   • Restrictions: Cannot engage in direct revenue-generating transactions.

5. Collective or Commandite Company (rarely used by foreigners)

   • Liability: Unlimited for certain partners; not recommended for high-risk ventures.

Step 2: Understand the Legal Requirements to Establish Company in Turkey

Once you’ve chosen your structure, you must comply with Turkey’s robust legal and regulatory framework. This ensures that your company is properly recorded, legally recognized, and permitted to operate.

Company Registration Essentials

To establish a company in Turkey, you must:

1. Reserve a Company Name: Submit up to three proposed names to the Trade Registry. Names must be unique, not misleading, and not infringe third-party trademarks.

2. Draft Articles of Association (AoA): A notarized AoA spells out shareholder names, capital contributions, business scope (NAICS code), registered office address, and governance rules.

3. Obtain a Turkish Tax Identification Number (TIN): Necessary for both the company and each shareholder.

4. Open a Provisional Bank Account: Deposit required capital in a Turkish bank and obtain a bank receipt.

5. Submit Incorporation Documents: At the Trade Registry Office, file the AoA, bank receipt, TIN, and notarized powers of attorney (if shareholders are abroad).

6. Publish Registration: The Registry publishes a notice in the Turkish Trade Registry Gazette, after which your company obtains legal personality.

Foreign Investor Considerations for Establishing Company in Turkey

Foreign investors should consider:

• Reciprocity Requirements: Some sectors require that your home country grant equal rights to Turkish citizens.

• Sectoral Restrictions: Certain industries (defense, broadcasting, financial services) require special permits or have foreign equity caps.

• Minimum Capital and Contribution: Ensure funds can be remitted to Turkey or deposited through foreign currency bank accounts.

• Power of Attorney Formalities: Apostilled and translated powers enable local representation.

• Shareholder Residency: Residence is not required, but appointing a local manager simplifies ongoing compliance.

Step 3: Prepare the Necessary Documents for Company Establishment

Documentation is the backbone of the incorporation process. Incomplete or improperly executed paperwork can delay your company establishment in Turkey by weeks or even months.

Translation and Notarization Requirements

All foreign language documents must be:

• Notarized: A notary public in the country of origin certifies the signature.

• Apostilled or Legalized: Under the Hague Convention apostille process, or through embassy legalization if your country is not a signatory.

• Sworn-translated: A yeminli tercüman (sworn translator) in Turkey provides the official Turkish translations.

Why Translation and Notarization Are Crucial

• Legal Validity: Turkish authorities won’t accept uncertified documents.

• Avoiding Disputes: Proper translation prevents misunderstandings about shareholder names, capital amounts, and board resolutions.

• Regulatory Compliance: Non-compliance can trigger fines or rejection of your application at the Trade Registry or Tax Office.

Step 4: Register Your Company with the Trade Registry

After gathering documents and depositing capital, you formally register at the Trade Registry Office, which grants your company legal existence and authority to operate.

Trade Registry Office Procedures for Company Establishment

1. File Application: Submit AoA, bank receipt, proof of TIN, notarized translations, and other required forms.

2. Pay Registration Fees: Based on the company’s paid-in capital—typically 0.04% to 0.04% per TRY of capital.

3. Review Period: The Registry verifies document authenticity and compliance with the Turkish Commercial Code (TCC).

4. Gazette Publication: Upon acceptance, the Registry publishes your incorporation notice in the Turkish Trade Registry Gazette.

Timeline and Key Outcomes

• Standard Timeline: 5–10 business days from filing to publication.

• Key Outcomes:

  • Legal personality conferred.

  • Trade Registry number issued (equivalent to a corporate ID).

  • Ability to enter into contracts, hire employees, and issue invoices.

Step 5: Open a Bank Account and Deposit Capital to Establish Company in Turkey

A corporate bank account is vital for both initial capital deposit and ongoing operations, such as paying suppliers and collecting customer payments.

Choosing the Right Bank

• Local vs. International Banks: International banks offer global connectivity but may require branch visits in your home country. Turkish banks have extensive domestic networks and digital platforms.

• Currency Options: Open TRY and FX accounts to manage exchange-rate risk.

• Online Banking: Essential for remote monitoring and wire transfers.

Importance of a Corporate Bank Account

• Proof of Capital: Required by the Trade Registry.

• Financial Credibility: Signals solvency to suppliers, landlords, and authorities.

• Tax and Payroll: Mandatory for withholding and social-security payments.

Step 6: Register for Tax and Social Security

Tax and social-security registrations activate your company’s compliance obligations and enable employee hiring.

Tax Identification and Compliance

1. Corporate Tax Number: Automatically assigned upon incorporation but you must confirm registration at the local Tax Office (Vergi Dairesi).

2. Value-Added Tax (VAT) Registration: Mandatory if annual turnover exceeds TRY 1,000,000 or if engaged in VAT-able supplies. You’ll charge 1%–18% VAT depending on goods/services.

3. Withholding Tax Registration: Necessary if you pay dividends, rent, or royalties.

4. Electronic Ledger Systems: Companies above certain thresholds must file with E-Fatura and E-Defter platforms.

Social Security Obligations

• Employer Registration: Register your company with the Social Security Institution (SGK).

• Employee Enrollment: Each employee must be registered within 30 days of hire.

• Premium Payments: Monthly employer and employee contributions to retirement, health, and unemployment insurance.

Step 7: Obtain Necessary Licenses and Permits After Establish Company in Turkey

Depending on your sector and activities, you may need industry-specific licenses or permits to commence operations legally.

Common Business Licenses

• Municipal Business Permit (İşyeri Açma ve Çalışma Ruhsatı): Granted by the local municipality, authorizing you to operate at a particular address.

• Sectoral Licenses:

  • Food & Beverage: Health-department food safety permits and liquor licenses.

  • Construction & Engineering: Ministry of Environment and Urbanization permits, building permits, and occupational licenses.

  • Financial Services: Banking- and capital-markets licenses from the Banking Regulation and Supervision Agency (BDDK) or Capital Markets Board (SPK).

  • Logistics & Transportation: Ministry of Transport permits for freight carriers or brokers.

Additional Compliance

• Environmental Permits: For manufacturing, chemicals, and waste management.

• Health & Safety Certification: Under Labor Law No. 6331 for workplace safety.

• Data Protection Registration: If processing personal data, register with the Data Protection Authority (KVKK).

Step 8: Finalize Operational Setup

With legal and regulatory matters addressed, it’s time to create the scaffolding for day-to-day operations.

Office Setup and Staffing

• Leasing Commercial Space: Ensure the lease agreement permits your business activities; obtain landlord consent where needed.

• Office Infrastructure: Internet, telecommunications, security systems, and necessary machinery.

• Human Resources: Recruit managers, administrative staff, and skilled labor; establish employment contracts in compliance with Turkish Labor Law.

Establishing Financial and Administrative Systems

• Accounting Software: Implement Turkish-compliant bookkeeping and reporting tools.

• Internal Controls: Develop approval workflows, signing authorities, and audit trails.

• Policies and Manuals: Employee handbooks, health-and-safety procedures, and data-protection guidelines.

Preparing for Launch

• Marketing and Branding: Localize your brand in Turkish, register domain names, and plan a launch campaign.

• Banking and Payments: Set up merchant services for credit-card acceptance and online payments.

• Supply-Chain Agreements: Formalize vendor contracts, delivery schedules, and quality standards.

Conclusion

Establishing a company in Turkey is a structured process that, when followed carefully, yields a well-regulated platform for growth in a dynamic economy. From Step 1: Determine the Right Business Structure to Step 8: Finalize Operational Setup, each phase builds on the last to ensure legal compliance, operational readiness, and strategic positioning.

Turkey offers:

• Access to Emerging Markets: Serving over 80 million domestic consumers and as a gateway to Europe, Asia, and the Middle East.

• Competitive Costs: Favorable corporate tax rates, incentives for foreign investment, and an educated labor force.

• Robust Legal Framework: Clear Commercial Code, secure property rights, and arbitration mechanisms.

• Strategic Advantages: Customs Union with the EU, advanced logistics infrastructure, and dynamic consumer markets.

With proper planning, document preparation, and local expertise, foreign entrepreneurs can successfully launch and expand their ventures in Turkey’s vibrant business landscape.

Frequently Asked Questions (FAQ) – Establish Company in Turkey

1. Why should I establish a company in Turkey?

Turkey offers a strategic bridge between East and West, a large consumer market, customs-union access to the EU, competitive labor costs, and an improving regulatory environment for foreign investment.

2. Can foreigners establish a company in Turkey without a Turkish partner?

Yes. Limited liability companies (Ltd. Şti.) and joint-stock companies (A.Ş.) may be 100% foreign-owned, with no requirement for a Turkish citizen partner, except in restricted sectors.

3. What are the main types of companies foreigners can establish in Turkey?

The most common forms are Limited Liability Company (Ltd. Şti.), Joint-Stock Company (A.Ş.), Branch Office, and Liaison Office. Each has distinct capital, governance, and liability features.

4. How long does it take to establish a company in Turkey?

Typically 4–6 weeks from initial name reservation to Trade Registry publication, provided all documents are in order and no sectoral permits are delayed.

5. Do I need a residence permit to establish a company in Turkey?

No. Foreigners can incorporate and own companies without Turkish residence. However, a residence or work permit is required to actively manage or work for the company locally.

6. Is it possible to establish a company in Turkey remotely?

Yes, via apostilled powers of attorney appointing Turkish legal representatives. These agents can handle name reservation, document filing, and bank dealings on your behalf.

7. How can I get started with the process to establish a company in Turkey?

Begin by consulting a Turkish corporate lawyer or business-setup consultancy. They’ll guide you through determining the right business structure, preparing documents, and coordinating with the Trade Registry, banks, and relevant authorities.