Turkey is becoming an important destination for foreign investors due to its strategic location, growing economy and pro-business policies. For foreign investors, whether an individual or a multinational company, understanding Turkish law is essential to ensure a smooth investment process. This blog post highlights the key legal considerations and the importance of obtaining expert legal services in Ankara to maximize your investment success to invest in Turkey.
Why Invest in Turkey?
Turkey acts as a bridge between Europe, Asia and the Middle East, providing proximity to major global markets. The main reasons to invest in Turkey are:
-
invest in Turkey Young, skilled and educated workforce
- Solid infrastructure for logistics and digital connectivity
- Competitive incentives and simplified investment procedures
- A growing economy with stable GDP growth
Foreign investors are actively supported by the Turkish Government through tax advantages, sector-specific incentives and legal protections. However, compliance with Turkish law is essential to avoid legal obstacles.
Key Legal Considerations for Investors
Company Formation and Structures
While the Turkish Commercial Code No. 6102 has many business structures, it is very important for foreign investors to choose the right business structure under the relevant law to invest in Turkey.
- Limited Liability Company: Best for small and medium-sized businesses. A Limited Liability Company is an organization formed by one or more legal or natural persons to carry out commercial activities.
- Joint Stock Company: Ideal for larger companies. A joint stock company is a company whose capital is fixed and divided into shares and is liable for its debts only with its assets.
- Branch Office : It is the expansion of existing businesses. Branches are defined as places and sales outlets that are affiliated to a commercial enterprise and where industrial and commercial activities are carried out on their own, regardless of whether they have independent capital or accounting, whether in the registry circle where the head office is located or in another registry circle.
- Liaison Office : An office opened by a foreign company to operate in the Turkish market is called a liaison office. These offices provide information and support services.
The process includes drafting the Articles of Association, registering with the Trade Registry, obtaining tax numbers and opening a bank account. Working with a english speaking lawyer ensures that this process is efficient and harmonized.
Compliance with Investment Laws
Law No. 4875 on Foreign Direct Investment guarantees equal treatment for foreign investors, guarantees for profit transfers abroad and access to arbitration in disputes. However, investors also need to comply with some additional regulations in Turkish legislation. These include sectoral regulations, environmental legislation for the protection of the environment, obligations under competition law and the Law on the Protection of Personal Data.
Seeking expert legal advice to fulfill the requirements of these laws is important to ensure full compliance and avoid potential penalties. An experienced law firm in Ankara can help investors navigate these complex regulations and assist in obtaining the necessary permits and approvals to invest in Turkey.
Taxation and Incentives
According to Turkey’s tax legislation, the corporate tax rate that companies are obliged to pay is 25%. The Turkish Republic’s double taxation avoidance agreements with more than 80 foreign countries provide for relief in this regard. Basically, to give examples of incentives in Turkey;
- Tax exemptions in free trade zones
- Regional investment support with reduced tax rates
- Research and Development (R&D) incentives
A qualified tax lawyer can help you optimize your tax strategy and maximize benefits.
Real Estate Investment: Legal Framework
While Turkey’s booming real estate market offers attractive opportunities for foreign investors, it is crucial to obtain proper legal guidance in the property purchase process to invest in Turkey. In this process, confirming the suitability of the property requires attention, especially in restricted areas. In addition, verifying the title deed, obtaining a valuation report and completing the sale transaction at the Land Registry Office are essential steps. Hiring the best lawyer in Turkey and an experienced Ankara lawyer can ensure clean title deed transfers through due diligence and meticulously carry out the necessary legal actions to avoid disputes.
Employment and Labor Laws
Knowing the labor laws when hiring employees in Turkey is vital for both employers and employees. There are some basic points to be considered in this process. For example, according to Turkish labor laws, the standard working week is limited to 45 hours. Employees are entitled to severance pay after completing one year of service, while employers are required to make regular mandatory social security contributions. In addition, employers who employ foreign workers are required to comply with work permit regulations under the International Labor Law No. 6735. Getting support from lawyer to ensure that all these legal obligations are fulfilled smoothly and permit applications are made correctly helps employers avoid potential legal risks and carry out business processes safely.
Resolution of Legal Disputes
Turkey offers several effective mechanisms for dispute resolution. Commercial disputes are generally settled in Turkish courts under the Civil Procedure and Turkish Commercial Code. The competent court for commercial cases is the Commercial Courts of First Instance. In addition, arbitration in Turkey is also often a preferred remedy, as it offers significant advantages in terms of confidentiality and efficiency, as well as faster results compared to domestic courts. Turkey also supports international arbitration by signing the New York Convention. Although Turkey has several arbitration centers, the Istanbul Arbitration Center (ISTAC) is the most common arbitration center in practice.
In addition, a limited number of specialized arbitration lawyer in Turkey will provide you with the best service in your commercial disputes in local or foreign arbitration centers. Hiring an experienced arbitration lawyer in Ankara can assist you at every stage of the litigation process, representing your interests in the best way possible and ensuring a favorable outcome.,
Why Work with an International Law Firm?
Understanding Turkish law and resolving disputes from an outsider’s perspective can sometimes be complicated, but working with an international law firm is key to protecting your investment. Legal experts can provide strategic advice on company formation, compliance processes and incentives, helping you to build your business in a healthy way. They also conduct due diligence, mitigate potential risks and secure your property rights. Experts also provide guidance on contract drafting and negotiations. With litigation and arbitration support, they offer solutions to protect your business. As the administrative center of Turkey, Ankara is home to the most experienced lawyers who can offer you tailored solutions to protect your business and fulfill legal requirements.
Tips for Safe Investments
Another reason to invest in Turket is that Turkey’s vibrant economy and investor-friendly policies offer unique opportunities in real estate, manufacturing, technology and more. However, legal expertise is essential for a successful investment journey.
By working with an international law firm in Ankara, investors can ensure compliance, minimize risks, position their businesses for long-term success and gain from hiring the best legal services. If you are looking for reliable legal services to guide you through the process, contact us today for personalized support tailored to your business needs.