ESTABLISHING A COMPANY IN TURKEY 2017

  • Ata Kurumsal Danışmanlık
  • Establishment of the CompanyEstablishment of the Company
  • Registration in the Chamber of CommerceRegistration in the Chamber of Commerce
  • Tax and fee for establishing companyTax and fee for establishing company
  • Residence PermitResidence Permit
  • Work permitWork permit
  • Accounting Service (1 Year)Accounting Service (1 Year)
  • Payroll Service (1 Year)Payroll Service (1 Year)
  • Additional company's Documents (1 Year)Additional company's Documents (1 Year)
  • Relocation (1 Year)Relocation (1 Year)
  • Legal Consultancy ( 1 Year)Legal Consultancy ( 1 Year)
  • Turkish Citizenship Turkish Citizenship
  • Turkish Passport Turkish Passport
  • Pre-paid capital of the company is less than 100.000 TL

  • $2,000

    +VAT (18%)


    Foreigner will not be provided with work permit

  • Establishment of the Companyyes
  • Registration in the Chamber of Commerceyes
  • Tax and fee for establishing companyyes
  • Residence Permityes
  • Work permitno
  • Accounting Service (1 Year)no
  • Payroll Service (1 Year)no
  • Additional company's Documents (1 Year)no
  • Relocation (1 Year)no
  • Legal Consultancy ( 1 Year)no
  • Turkish Citizenship no
  • Turkish Passport no
  • Pre-paid capital of the company is 100.000 TL

  • $5,000

    +VAT (18%)


    Getting work and residence permit within 1 month

  • Establishment of the Companyyes
  • Registration in the Chamber of Commerceyes
  • Tax and fee for establishing companyyes
  • Residence Permityes
  • Work permityes
  • Accounting Service (1 Year)yes
  • Payroll Service (1 Year)yes
  • Additional company's Documents (1 Year)no
  • Relocation (1 Year)no
  • Legal Consultancy ( 1 Year)no
  • Turkish Citizenship no
  • Turkish Passport no
  • Pre-paid capital of the company is more than 100.000 TL

  • $9,000

    +VAT (18%)


    Getting work and residence permit within 1 month

  • Establishment of the Companyyes
  • Registration in the Chamber of Commerceyes
  • Tax and fee for establishing companyyes
  • Residence Permityes
  • Work permityes
  • Accounting Service (1 Year)yes
  • Payroll Service (1 Year)yes
  • Additional company's Documents (1 Year)yes
  • Relocation (1 Year)yes
  • Legal Consultancy ( 1 Year)yes
  • Turkish Citizenship no
  • Turkish Passport no
  • Pre-paid capital of the company is 2.000.000 USD

  • $20,000

    +VAT (18%)


    Getting Turkish citizenship and Turkish passport within 4 months

  • Establishment of the Companyyes
  • Registration in the Chamber of Commerceyes
  • Tax and fee for establishing companyyes
  • Residence Permityes
  • Work permityes
  • Accounting Service (1 Year)yes
  • Payroll Service (1 Year)yes
  • Additional company's Documents (1 Year)yes
  • Relocation (1 Year)yes
  • Legal Consultancy ( 1 Year)yes
  • Turkish Citizenship yes
  • Turkish Passport yes

 

Establishing Company in Turkey 2017©- With the new foreign investor programme, the Republic of Turkey grants citizenship to foreigners who make 1 million dollar property investment in Turkey or found/buy a company with 2 million dollar capital,  or deposit 3 million dollars in State investment instruments or state banks operating in Turkey provided that they do not withdraw such amount for three years.  Turkish Citizenship By İnvesment

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ESTABLISHING BUSINESS IN TURKEY

In the global age, companies tend to re-consider their capital structures within the Capital, Information and Technology axis. There is no doubt that adaptation to the increasing international competition within the boundaryless world plays an important role in the decision to establish overseas businesses and partnerships. Within this perspective, Turkey develops a series of legal and political initiatives that encourage the internationalization and globalization efforts of companies who seek to move to Turkey. This article explains the process of establishing a foreign company in Turkey by focusing on ordinary procedures for establishing different types of foreign companies.

 

LEGAL BASIS

Core legislation on foreign investment is the Law no 4875 on the Foreign Direct Investments.[1] Upon its acceptance and entry into force on 17.06.2003, the current legislation on Foreign Direct Investment explicitly guarantees two principles: freedom to establish business enterprises and equal treatment. In accordance with article 3 (a) of Law on Foreign Direct Investments:

“Unless stipulated by international agreements and other special laws: 1.Foreign investors are free to make foreign direct investments in Turkey, 2. Foreign investors shall be subjected to equal treatment with domestic investors.”

Prior to entry into force of Law no 4875, foreign investors seeking to establish business in Turkey were subjected to Law no 6224 on the Encouragement of Foreign Capital. In accordance with the old legislation which is outlawed by the Law no 4875, Foreign companies were subjected to a series of strict opening procedures. Among all the most controversial ones were the requirement of preliminary permission from Ministry of Treasury and a minimum 50.000 USD capital requirement per foreign partner. Moreover Law no 4875 also abolished the limitation before the commercial activities of foreign investors. Previously, foreign investors were allowed to form Joint Stock Companies, Limited Liability Companies and Branch Offices. By the virtue of Law no 4875 and most importantly by the reforms put forward by the new Turkish Commercial Code, regardless of having a legal entity, foreign investors might form all types of companies and engage commercial activities in Turkey.

Business life in Turkey was further amended by the introduction of the new Turkish Commercial Code No. 6102, which has replaced and outlawed the 55 years old Turkish Commercial Code on 1 July 2012.[2] In line with the European Union harmonization efforts the new commercial code created a well structured and less complicated business life. Moreover it reflected major EU principles such as free movement of capital.

Among all, one of the major developments achieved by the introduction of the new code is the amendment of the shareholder structure of companies. Accordingly the new law permits the establishment of joint stock companies or limited companies with a single shareholder. Furthermore, foreign individuals may form a joint stock company or a limited company. In the joint stock companies, the  board of directors can be formed only by one person and the board may also meet in an electronic environment. Moreover legal entities may be appointed as board members. Thus foreign individuals or legal entities can form a joint stock company and board members might consist of foreign nationals.[3]

 

COMPANIES SUBJECTED TO THE APPROVAL OF MINISTRY

The following types of Joint Stock Companies are subjected to prior permission of Ministry before their establishment and/or the amendment of their articles of incorporation.

  • Banks,
  • Financial leasing companies,
  • Factoring companies,
  • Consumer finance and card services companies,
  • Asset management companies,
  • Insurance companies,
  • Joint-stock company established in the form of holdings,
  • Companies operating currency exchange office,
  • Companies dealing with public warehousing,
  • Companies dealing with licensed warehousing of agricultural products,
  • Commodity exchange companies,
  • Independent audit companies,
  • Surveillance companies,
  • Technology development zone administrator companies,
  • Companies founding and operating Free Trade Zone.

 

TYPES OF COMPANIES & REQUIRED DOCUMENTS

As per article 124 of the new commercial code incorporated companies are listed as Collective Company, Commandite Company, Joints Stock Company, Limited Company and Cooperative. In accordance with the second paragraph of the Article 124, Commandite (Limited Partnership) and Collective companies are classified as partnerships and the Joint Stock Companies, Limited Liability Companies and Limited partnership by shares are classified as Capital Companies.

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Figure 1: TYPES OF COMPANIES IN TURKEY

 

COMPANY TYPES AND CHARACTERISTICS

COMPANY TYPE LEGAL ENTITY RESPONSIBILITY STRUCTURE PARTNERS CLASSIFICATION TAX LIABILITY
SOLE PROPRIETORSHIP NO UNLIMITED LIABILITY AT LEAST ONE SHAREHOLDER NATURAL PERSON PROPRIETORSHIP INCOME TAX
UNINCORPORATED COMPANY NO UNLIMITED LIABILITY AT LEAST TWO SHAREHOLDERS, NATURAL PERSON PROPRIETORSHIP INCOME TAX
COLLECTIVE COMPANY(GENERAL PARTNERSHIP) YES UNLIMITED LIABILITY AT LEAST TWO SHAREHOLDERS, NATURAL PERSON PROPRIETORSHIP INCOME TAX
COMMANDITE COMPANY (LIMITED PARTNERSHIP) YES ACTIVE PARTNER (COMMANDITE) HAS UNLIMITED LIABILITY AT LEAST TWO SHAREHOLDERS, ACTIVE PARTNER SHOULD BE NATURAL PERSON PROPRIETORSHIP INCOME TAX
LIMITED PARTNERSHIP BY SHARES YES ACTIVE PARTNER (COMMANDITE) HAS UNLIMITED LIABILITY AT LEAST FIVE SHAREHOLDERS, ACTIVE PARTNER SHOULD BE NATURAL PERSON CAPITAL COMPANY CORPORATE TAX
LIMITED LIABILITY COMPANY YES LIMITED LIABILITY AT LEAST ONE SHAREHOLDER, MINIMUM AMOUNT OF CAPITAL SHOULD BE 10.000 TURKISH LIRAS NATURAL PERSON OR LEGAL ENTITY CAPITAL COMPANY CORPORATE TAX
JOINT STOCK COMPANY YES LIMITED LIABILIY AT LEAST ONE SHAREHOLDER, MINIMUM AMOUNT OF CAPITAL SHOULD BE 50.000 TURKISH LIRAS NATURAL PERSON OR LEGAL ENTITY CAPITAL COMPANY CORPORATE TAX

Table 1: COMPANY TYPES AND CHARACTERISTICS


 

LIMITED LIABILITY COMPANY (LLC)

As per article 573 of the Turkish Commercial Code, a limited liability company can be formed by at least one natural person and a legal entity shareholder for all the kinds of economic purposes. The number of shareholders can not exceed 50. Shareholders are not responsible for the debt of the company; they are only responsible for paying basic capital shares to which they are subscribed. The registered capital of the Limited Liability Company should be at least 10.000 Turkish Liras.

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Table 2: LIMITED COMPANY - REQUIRED DOCUMENTS

 

JOINT STOCK COMPANY (J.S.C)

In accordance with article 239 of Turkish Commercial Code, “A joint stock company is a company whose capital is certain and divided into shares and which is solely responsible for its debts as an amount of its assets. Shareholders are solely responsible to the company and their responsibility is limited to their subscribed shares.” Minimum capital of the joint stock company should be at least 50.000 Turkish Liras.

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Table 3: JOINT STOCK COMPANY - REQUIRED DOCUMENTS

 

COMMANDITE & COLLECTIVE COMPANY

Article 304 of Turkish Commercial Code defines Commandite Companies. Accordingly Commandite Company is a form of company established for commercial purposes under a trade name. The liability of some shareholders is limited to the subscribed capital (Commanditer), on the other hand for some shareholders have unlimited liability (Commandite). No minimum capital is required for the formation of a commandite company.

As per article 211 of Turkish Commercial Code (General Partnership) can be founded by real persons for commercial purposes under a trade name. In the collective company, shareholders have unlimited liability.

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Table 4: COMMANDITE & COLLECTIVE COMPANY - REQUIRED DOCUMENTS

 

ANNEXES - SAMPLE DOCUMENTS

ANNEX I SAMPLE CERTIFICATE OF ACTIVITY
ANNEX II SAMPLE CERTIFICATE OF PARTNERSHIP CONFIRMATION
ANNEX III SAMPLE CERTIFICATE OF CHAMBER REGISTRY
ANNEX IV SAMPLE SIGNATURE CIRCULAR
ANNEX V TAX CERTIFICATE

CERTIFICATE OF PARTNERSHIP CONFIRMATION
TAX CERTIFICATE
CERTIFICATE OF ACTIVITY
SIGNATURE CIRCULAR
CERTIFICATE OF CHAMBER REGISTRY


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DISCLAIMER

Please consider that Expat Guide Turkey guide - Establishing Business in Turkey - contains general information only, not legal advice. Although Expat Guide Turkey & Ata Kurumsal has taken great care in compiling the content of this guide, we cannot guarantee that all information is accurate and complete.Expat Guide Turkey accepts no liability for the content of this guide, or for the consequences of any actions taken on the basis of the information provided.

 

Accounting services provided by ATA Corporate Consulting Inc. are as Follows:

 

Related Posts:

1: START-UP EXPENSES OF LIMITED COMPANY
2: SPECIAL PACKAGE FOR FOREIGN INVESTORS! HERE ARE 10 ITEMS
3: ESTABLISHING LIMITED AND INCORPORATED COMPANY IN TURKEY
4: ESTABLISHING A COMPANY IN TURKEY: LIMITED OR INCORPORATED COMPANY?

SPECIALITIES

Establishing Company in Turkey - by
, 15 September 2015As per article 124 of the new commercial code incorporated companies are listed as Collective Company, Commandite Company, Joints Stock Company, Limited Company and Cooperative.

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6 Responses

  1. Thank you for this very helpfull website!!!

    I plan to open a small business on a pre-paid capital less than 100.000 TL.

    My questions are:

    1) what is the best solution for not hiring 5 turkish employee (since is a small business and I dont need so many people). I intend NOT to work in the business but rather to employee one or two Turkish workers?

    2) Based on that scenario on my previous question, can I still get a residence to live in Turkey?

    3) What is the best type of company I can form where I put my name and my father´s name in the company, so we both can get a residence? (since he is investing in the business)

    4) what is the minimum pre-paid capital to open a business?

    Once again, very grateful for the help.

  2. Dear Sir/Madam,

    I am living in Dubai, UAE would like to open a Company in Turkey.

    Please call me on my Mob 00971-55-xx xxx

    Regards,

    Manoj K Prajapati

  3. Dear Sir,
    I have a number of question concerning the creation of a company or the acquiring of a company.
    Please answer/comment below to save time:
    1) Do you have already registered (shelf companies) in hand which I can acquire? If yes, how much time it takes to form/incorporate it and provide details with the total cost .
    2) Can I change the name of the shelf-company while acquiring it? If yes, how much time is required?
    3) If I buy a shelf company and change its name, would it retain its number of years it was first formed or it will be registered as a fresh/new company in Turkish Government records?
    4) What type of document/guarantee you provide for shelf-company that it has no debts/obligations on me from its previous operations?
    5) How much time it takes to form/incorporate a new company and provide details with the total cost .
    6) Is there any way to hide my surname when forming a company such that when someone contacts the local Turkish Chamber of Commerce for finding out about my company my exact details are not disclosed?
    7) If I form company in my sister’s name (her surname is different than our family name), can you form the company without her physical presence? What is the procedure?
    8) What is the percentage of corporate tax in Turkey? Is there any way to minimize it?
    9) Is there is any mutual agreement regarding Corporate/Income Tax (to prevent double taxation) between USA & Turkey?
    10) Since I will be importing as well as exporting, what are the details/obligations for VAT?
    11) Can you start the documentation/process before I arrive in Turkey upon my behalf to save time?
    12)Since a valid address will be needed to be shown in Turkey but I do not intend to rent any office for now, hence can you take care of it and how?
    Looking forward to your kind reply.
    Thank you.
    Kind regards,
    Information about company in Turkey

    • ExpatGuideTurkey ExpatGuideTurkey

      Dear Mr Mohammed,

      To answer your question briefly :

      1-We don’t have any shelf company you can acquire and we don’t advice you to acquire one since we can’t guarantee the wellbeing of the company. However we can give you consultancy services if you ever wish to acquire one. The process of acquiring a company take a maximum of 3 days and the cost of it is around 2000₺ plus the fee for the company and our consultancy fee.

      2- In the case you acquire a company you can change the name of the company. The change in name will be done when we will be acquiring the shelf-company.

      3- If you acquired a company, the company retain all of the previous records, the only change is made in the name.

      4- In most case company are sold without any debt ( Governmental, bank, clients etc…), and the guarantee for it is given by the Tax Directorate where the company is registered.

      5- The process of opening a new company take a maximum of 3 days. It is similar to the acquisition of a company.

      6- Unfortunately you can’t hide your name in any of the records. The Turkish Law state that the name of the founder of a company must be specified in the records.

      7- Yes we can, if you provide us with a letter of attorney that we can provide you, she can make a letter of attorney in any Turkish Embassy, we can form a company without the need for her to here physically.

      8- The Corporate Tax is 20% in Turkey. Our expert accountant will help you to reduce your corporate tax.

      9- They are agreement to prevent double taxation between Turkey and other country. USA is one of them since 1996.

      10- You will have to pay taxes on some of your product. However the Turkish Government has a VAT which depend on the type of product thus your VAT may not be the standard %18 but might be less.

      11- If you give us a letter of attorney we can start the procedures before your arrival, even we can finish them. However without it we can’t do any of procedures.

      12- You can either rent a physical office or you can rent a virtual office in most of the big cities in Turkey. Virtual office expenses are far less than physical ones and are better suited for company which don’t need physical presence.

      I hope to have answers all of your questions.

      We would advise you to fund a company if you don’t any of the records of an already active one. It will cost you far less, since you won’t need to pay the fee of the company, and it will take the same amount of time. However if you would like to acquire one, we can take care of all the legal matter to make it yours the soonest possible.

      • Dear ExpatguideTurkey,

        I have a couple questions I hope you can answer for me. Thanks in advance for any and all advice on this.

        1) If I establish an LLC in Turkey with a partner and we’re both foreigners, do we have to get work permits before being able to work and pay ourselves through this company ?

        2) If I establish an LLC in Turkey with a partner and we’re both foreigners, do we need to follow the 5-1 ratio rule (i.e. 5 Turkish national employees to foreign employees) ?

        3) If I establish an LLC as the SOLE owner, do I still have to follow the 5-1 ratio rule ?

        4) If one has an LLC and pays oneself through this LLC, does one pay self-employment tax, income tax, social security, etc ? Or does one only pay corporate tax ?

        Thanks again,
        Daniel

        • Dear Mr. Daniel,

          Thank you very much for your email.

          Please find the answers to your questions below;
          1. Yes, both of foreign shareholders should have work permit to be able to work in established company
          2. İn order to get a work permit for foreigner, the company should employ 5 Turkish employees (2 foreigners – 10 Turkish employees and etc). However, let me inform you that company has a right to get a work permit for 1 employee within 6 months from establishment ( the criteria of 5/1 is not applicable witihn first 6 month from etablishment) Thsi exempiton is valid only first 6 months, after that company has to employ 5 turkish employees.
          3. The 5-1 ratio rule is still applicable
          4. The owner of an LLC is responsible for all related tax as income tax, SOcial Security premiums and self-employment tax..

          İf there will be any questions, please feel free to contact me.

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