Establishing a Company in Turkey : A Comprehensive Guide

Table of Contents

Introduction

Turkey is a growing economy with a strong investment climate. The country offers a number of advantages for foreign investors, including a strategic location, a young and educated workforce, and a favorable tax regime.

After the qualitative leap that the Turkish economy witnessed, and the facilitation of the laws of opening a company in Turkey, the advantages of Establishing a Company in Turkey became unparalleled. For this reason, the number of investors looking for Establishing a Company in Turkey has increased. A large number of them have become interested in learning about the law of establishing a company in Turkey.

The steps for registering a company in Turkey have been organized through several laws and regulations issued in 2003. These regulations are keen on the following:

Protecting all the rights of foreign investors and those who wish to register a company in Turkey.
Establishing international standards for investment and the investor within the steps of registering a company in Turkey.
Providing all the necessary facilities to attract foreign investments that are keen to establish a company in Turkey.

Benefits of Establishing a Company in Turkey

There are many benefits to Establishing a Company in Turkey, including:

Access to a large and growing market: Turkey has a population of over 84 million people, and the economy is growing at high rates every year.
A favorable tax regime: Turkey offers a number of tax incentives for foreign investors, including a reduced corporate tax rate of 20%.
A skilled workforce: Turkey has a young and educated workforce, with a literacy rate of over 95%.
A strategic location: Turkey is located at the crossroads of Europe, Asia, and the Middle East.

Benefits received by the company owner

A person who establishes a company in Turkey receives many benefits, including:

The company is established in a market that is ranked as one of the best markets in the world.
There is health insurance for all family members, which allows them to receive free treatment in all state hospitals.
The person receives a work permit and a merchant card, which allows them to obtain all information about government tenders and exhibitions.
The government provides support for marketing Turkish products and organizing exhibitions and events for your company abroad.
Exporting is easy, as the Turkish government exempts exports from taxes.
It is easy to market products within the European Union.
The government provides social security in the event that the company closes or is lost.
Schools and universities are free for family members.
The person is entitled to a pension after working for a certain period of time in Turkey.

Types of Companies in Turkey

There are four main types of companies in Turkey:

Limited liability companies (LLCs): LLCs are the most common type of company in Turkey. They are owned by shareholders who are not personally liable for the company’s debts.
Joint stock companies (JSCs): JSCs are similar to LLCs, but they are owned by shareholders who hold shares of stock.
Partnerships: Partnerships are owned by two or more individuals who share the profits and losses of the company.
Cooperatives: Cooperatives are owned by a group of people who work together to achieve a common goal.

Steps to Start a Company in Turkey

The steps to start a company in Turkey are as follows:

Choose a company type: The first step is to choose the type of company you want to start.
Prepare your documents: You will need to prepare a number of documents, including a business plan, a company registration form, and a power of attorney.
File your application: You will need to file your application for company registration with the Turkish Trade Registry.
Pay the registration fee: You will need to pay a registration fee to the Turkish Trade Registry.
Get your company registration certificate: Once your application is approved, you will receive your company registration certificate.

The duration of Establishing a Company in Turkey

As for the duration of the procedures for Establishing a Company in Turkey, it does not exceed a few days. You just need to prepare the required papers and documents.

For the address or headquarters of the company, you can have a virtual address instead of a real headquarters.

The real headquarters of the company will be chosen later. Based on this, you can simply prepare the company’s papers and notarize them.

Then, you can go to the Chamber of Commerce office and the Tax Office. We recommend here to seek the assistance of a specialized company so that an accountant and expert can accompany you to complete the procedures for Establishing a Company in Turkey smoothly without suffering or errors.

Conditions for Establishing a Company in Turkey

Establishing a company in Turkey is a relatively easy process, free of bureaucratic red tape. New investors can easily obtain the necessary paperwork for their new company. After establishing the company at the Chamber of Commerce office, the company must be registered with the local tax office. The tax certificate is then issued, which must be displayed prominently at the workplace. The local tax officer will visit the company’s office or shop within a few days to verify the information provided and the tax certificate.

As for the conditions for Establishing a Company in Turkey for foreigners, they are as follows:

The foreign investor must prepare a memorandum of association that clearly specifies the activity of the company they wish to establish. This memorandum must be notarized by a notary public and accompanied by a document that includes the company’s address.
A minimum of 25% of the company’s capital must be deposited in a Turkish bank within two years of the date of establishment of the company, or before applying for a work permit in Turkey.
The bank account into which the quarter of the capital is deposited must be in the name of the company.
The original of the company’s memorandum of association, notarized by a notary public, along with two certified copies, must be submitted to the Chamber of Commerce in Turkey within 15 days of the date of notarization.
Approval must be obtained from the Chamber of Commerce in Turkey.
The company must be registered with the local tax office after completing the registration with the Chamber of Commerce. At this step, the company’s tax certificate is issued, in accordance with the laws on opening a company in Turkey.

Fees for establishing a company in Turkey for foreigners

The fees required during the procedures for opening a company in Turkey are reasonable and not expensive. They include the costs of the fees of the legal accountant assigned to complete the procedures and papers and some other fees, ranging from 600-800 US dollars depending on the accountant’s fees. There are also several fees that are paid on a continuous basis as long as the company exists, as follows:

Monthly legal accountant fees
Monthly taxes
Annual fees, such as the annual accounting book fee and the Chamber of Commerce book fee

Minimum Capital for Establishing a Company in Turkey

On 25^th November 2023 The Turkish Government increased the minimum Capital to establish a company in Turkey as following:

Joint Stock Company (JSC) minimum capital increased from 50.000 TL to 250.000 TL.
Limited Liability Company (LLC) minimum capital increased from 10.000 TL to 50.000 TL.

This new Capital amount will be applied starting from 1^st of October 2024.

Corporate taxes in Turkey

Corporate taxes are calculated on the net profits that are realized during the fiscal period, which is three months. Twenty percent of the net profits that are realized by companies, institutions, and entities are deducted as a profit tax after calculating the company’s imports and expenses. The full or partial liability with regard to corporate profit tax determines the tax pattern. Full liability means that the profit tax is deducted from the entire profit (profit that is obtained inside and outside Turkey). Partial liability means that the profit tax is deducted from the profit that is obtained inside Turkey only, by companies that are not headquartered in Turkey.

Monthly and annual taxes after establishing a company in Turkey

Institutional tax is calculated on the net profits that are realized during the fiscal period, which is three months. Twenty percent of the net profits that are realized by companies, institutions, and entities are deducted as a profit tax after calculating the institution’s imports and expenses.

Closing a company in Turkey

Closing a company in Turkey can take anywhere from one day to a full year, depending on the type of company. This is because the Turkish state considers companies to have a legal personality, thus enabling anyone who has debts or rights to the company to be informed of the decision to close it and to deal with the rights legally. A legal power of attorney is required for the accountant to begin the closure procedures, and what results from it, such as paying off the debts and taxes due to the company even during the closure procedures.

Conclusion

Establishing a Company in Turkey can be a rewarding experience. The country offers a number of advantages for foreign investors, including a strong economy, a favorable tax regime, and a skilled workforce. If you are considering Establishing a Company in Turkey, be sure to do your research and understand the requirements.

Turkey: God’s Paradise on Earth, a Comprehensive Guide

Turkish Citizenship by Real Estate Investment: A Comprehensive Guide

Significant Increase in the value of Turkish real estate investment residence

Üsküdar: A Charming District on the Asian Side of Istanbul