Turkey offers various legal business establishment models for companies, individuals, and non-governmental organizations. In this guide, you’ll find options for company establishment, branch setup, liaison offices, free zone companies, associations/foundations, and sole proprietorships, along with their capital requirements.
1. Company Establishment (Joint Stock Company – A.Ş. and Limited Liability Company – Ltd. Şti.)
The most preferred company types in Turkey are the Joint Stock Company (Anonim Şirket – A.Ş.) and the Limited Liability Company (Limited Şirket – Ltd. Şti.). Both are capital companies, and the liability of partners is generally limited to the capital they commit.
Joint Stock Company (A.Ş.)
- Features: Generally preferred for large-scale investments, publicly tradable shares, and a more complex management structure. The minimum capital is 250,000 TL. It can be established with a single shareholder.
- Advantages: Possibility of public offering, high prestige, easier transfer of shares.
- Establishment Process:
- Preparation of Articles of Association: The articles of association are prepared, including basic information such as the company’s field of activity, capital, shareholders, and board of directors.
- Mersis Application: An application is made through the Central Registry System (MERSİS), and the company name is reserved.
- Notary Approvals: The articles of association and founder’s declaration are approved by a notary.
- Competition Authority Share: 0.04% of the capital is deposited into the Competition Authority’s account.
- Capital Blockage at Bank: A certain percentage (usually 25%) of the determined minimum capital is blocked in a bank account.
- Application to Trade Registry Office: An application is made to the relevant Trade Registry Office with all documents.
- Announcement in the Trade Registry Gazette: Upon registration of the establishment, company information is published in the Trade Registry Gazette.
- Tax Office and SSI Registrations: A tax plate is obtained, and the workplace is registered with the Social Security Institution (SGK).
Limited Liability Company (Ltd. Şti.)
- Features: More suitable for SMEs and medium-sized businesses. Its establishment and management are simpler than an A.Ş. The minimum capital is 50,000 TL. It can be established with a single shareholder.
- Advantages: More flexible structure, less bureaucracy, lower establishment costs.
- Establishment Process: Includes similar steps to an A.Ş., but the capital blockage requirement is not mandatory; it’s sufficient to pay the capital within 24 months after the company is registered.
Important Note: For both A.Ş. and Ltd. Şti. establishments, determining the company address (a virtual office is also possible) and working with an accountant/financial advisor should be among the first steps.
2. Branch Establishment
If a company already operating in Turkey or a foreign-established company wishes to operate in Turkey, branch establishment can be preferred. A branch does not have an independent legal personality from the main company and is considered an extension of the main company’s activities.
- Features: Uses the main company’s trade name, is subject to the laws of the country where the main company’s headquarters are located. Liability belongs to the main company.
- Advantages: Can be faster and less costly than establishing a full-fledged company, ideal especially for a specific project or limited operations.
- Establishment Process:
- Mersis Application: The branch name and address are determined via MERSİS.
- Preparation of Required Documents: Documents belonging to the main company, such as activity certificates, authorized body resolution books, and registry certificates, are prepared with apostille and sworn translation.
- Application to Trade Registry Office: An application is made to the relevant Trade Registry Office with all documents.
- Tax Office and SSI Registrations: A tax plate is obtained, and the workplace is registered with SSI.
3. Liaison Office Establishment
Liaison offices are an ideal structure for foreign companies that do not directly engage in commercial activities but wish to monitor the main company’s activities in Turkey, conduct market research, gather information, or carry out representation activities.
- Features: Cannot conduct commercial activities or generate income. Only undertakes representation and coordination duties on behalf of the main company. It is not subject to tax in Turkey (excluding personnel salaries).
- Advantages: Low establishment and operating costs, simple bureaucratic procedures.
- Establishment Process:
- Ministry Permit: A permit is obtained from the Ministry of Family, Labour and Social Services (or the relevant ministry).
- Required Documents: Documents belonging to the main company, such as activity certificates, authorization documents, and powers of attorney, are prepared with apostille and and sworn translation.
- Tax Office Registration: Income tax liability is opened only for personnel salaries.
4. Company Establishment in Free Zones
Free Zones in Turkey are areas with special economic status for export-oriented activities. These zones offer incentives such as tax advantages and customs exemptions, creating an attractive environment for investors.
- Features: Exemptions or reductions from certain taxes such as customs duty, VAT, SCT (Special Consumption Tax), and Corporate Tax may be offered. Many activity areas are possible, including trade, production, storage, and assembly.
- Advantages: Cost advantages, bureaucratic conveniences, strategic positioning.
- Establishment Process:
- Free Zone Permit: An application is made to the relevant Free Zone Directorate or Operating Company, and an activity license is obtained.
- Selection of Company Type: Companies are usually established as an A.Ş. or Ltd. Şti. within the Free Zone.
- Trade Registry Registration: The company is registered with the Free Zone Registry.
- Tax Office and SSI Registrations: Relevant registrations are made in line with tax advantages.
5. Association / Foundation Establishment
In Turkey, legal entities that do not aim for commercial profit but operate for a specific social, cultural, scientific, or charitable purpose can be established as an association or a foundation.
Association Establishment
- Features: Can be established by at least 7 real or legal persons. They are organized to achieve a common goal.
- Establishment Process:
- Founders’ Board: A decision is made to establish an association with at least 7 people.
- Association Bylaws: Bylaws are prepared, including information such as the association’s name, purpose, address, and organs.
- Governorship Application: An application is made to the relevant Provincial Directorate of Civil Society Relations of the Governorship with the bylaws and founder list.
- Registration in the Associations Registry: Upon approval of the documents, the association is registered in the associations’ registry.
Foundation Establishment
- Features: A collection of assets and rights dedicated to a specific purpose. Can be established by a real or legal person.
- Establishment Process:
- Foundation Deed: A foundation deed stating the foundation’s purpose, establishment conditions, assets, and governing bodies is prepared by a notary.
- Court Decision: An application is made to the Civil Court of First Instance for the registration of the foundation deed. It is registered by court decision.
- Announcement in the Official Gazette: The registration decision is published in the Official Gazette.
6. Sole Proprietorship Establishment
A sole proprietorship is the simplest type of business, owned by a single real person, where commercial activities are directly conducted under that person’s responsibility.
- Features: The easiest and fastest business type to set up. Decisions are made quickly. The business owner’s liability is unlimited (they are liable with their personal assets).
- Advantages: Low establishment costs, simple bookkeeping, easy closure.
- Establishment Process:
- Address Determination: The workplace address is determined (a virtual office is also possible).
- Accountant Appointment: An agreement is made with a financial advisor.
- Tax Office Application: A sole proprietorship tax liability is opened and a tax plate is obtained through the accountant.
- SSI Registration: Bağ-Kur or SSI registration is made.
- Municipality License: A business opening and operating license is obtained from the relevant municipality according to the field of activity.
Golden Tips for a Successful Establishment
To ensure smooth processes and full compliance with laws when establishing your business in Turkey:
- Professional Consulting: Company establishment is a complex process involving legal, financial, and administrative procedures. Working with a financial advisor, lawyer, or corporate consulting firm will greatly facilitate everything from choosing the right company type to preparing all documents completely and fulfilling legal obligations.
- Choose the Right Company Type: It is vital to select the most suitable company type based on the nature of your business, its size, capital needs, and liability expectations.
- Follow Current Legislation: Commercial Law, tax laws, and related regulations may change from time to time. Professional support is essential to stay informed with current information.
- Electronic Signature (E-signature): The use of electronic signatures has become widespread in many official applications and document approvals. This is an important tool that speeds up and simplifies processes.
We hope this guide illuminates your journey to establishing a business in Turkey. With the right steps and support, you can successfully bring your business to life and make the most of the opportunities Turkey offers!
