Turkey has emerged as a strategic business hub that bridges Europe and Asia, offering a dynamic and competitive environment for entrepreneurs and businesses alike. Company formation in Turkey presents an array of opportunities and benefits, from a vibrant market to favorable tax policies and access to a skilled workforce. As Fidelis Law Partners, we provide professional services regarding the company establishment in Turkey, acquisitions of companies, establishment of partnerships, and selection of managers and officers in Turkey. You can get support on this issue from our team, all of whom are lawyers.
This article aims to provide a comprehensive guide to understanding the process and requirements of establishing a company in Turkey.
Types of Companies in Turkey: Before initiating the company formation process, it is essential to choose the appropriate legal entity that aligns with your business objectives. Turkey offers various company types, including:
- Limited Liability Company (LLC): The most common and straightforward choice for small to medium-sized enterprises. It requires a minimum capital amount, a minimum of one shareholder and one director, with limited liability for each shareholder’s personal assets. The capital amount of the company must be paid in 24 months.
- Joint Stock Company (JSC): It is suitable for larger-scale businesses with more than one shareholder. It requires a minimum capital amount and liability is limited to the value of the shares. Unlike limited liability companies, 25% of the share capital must be paid before company registration. The remaining capital must be paid within 24 months.
- Branch Office: A foreign company can establish a branch in Turkey, allowing it to conduct business in the country while remaining an extension of its parent company. Since there is a parent company in another country, the process is more different than company formation in Turkey. First, the parent company’s authorities must take a resolution for establish a branch in Turkey. Then, documents of the company and the resolution must be legalized. Therefore, branch formation process takes longer time and costs more than a company formation.
- Liaison Office: Unlike a branch office, a liaison office cannot conduct commercial activities but is limited to representational purposes.
Company Formation Process: The process of company formation in Turkey involves several key steps:
- Selecting a Business Name: The first step is to choose a unique company name that is not already registered and complies with Turkish naming regulations.
- Determining Shareholders and Directors: Identify the shareholders and directors of the company, and ensure they meet the legal requirements.
- Capital Requirements: Determine the minimum capital requirement based on the chosen company type. The minimum capital requirement for an LLC is lower compared to a JSC.
- Drafting Articles of Association: Prepare the Articles of Association, which outlines the company’s rules and regulations, shareholders’ rights, and capital structure.
- Notarization: Notarize the Articles of Association and other required documents before a notary public in Turkey.
- Trade Registry Office: Submit the notarized documents to the relevant Trade Registry Office and apply for company registration.
- Tax Registration: Register the company for taxation purposes with the local tax office.
- Work Permits and Visas: For foreign shareholders and directors, obtain work permits and visas if required.
Legal and Regulatory Requirements: The Turkish Commercial Code governs company formation in Turkey. Compliance with local laws and regulations is essential to ensure a smooth registration process and avoid any legal issues in the future. Engaging a local lawyer or consultancy with expertise in Turkish company law can be beneficial during this stage. Our team has conduct formation a company in Turkey many times, we would like to assist you at this process to you to avoid any challenges may happen.
Taxation and Incentives: Turkey offers a competitive tax environment to attract foreign investors. Corporate income tax is levied at a standard rate, and there may be additional incentives for specific industries or regions. The country also boasts several double-taxation treaties, providing further tax advantages for international businesses.
Banking and Finance: Upon registration, companies can open bank accounts in Turkish banks to facilitate business transactions and financial operations.
Establishing a company in Turkey opens up a world of opportunities in a strategic location that bridges continents. The dynamic market, favorable tax policies, and access to a skilled workforce make Turkey an attractive destination for entrepreneurs and investors. Understanding the legal requirements and intricacies involved in company formation is vital to ensure a successful and compliant entry into this vibrant business landscape. If you have been seeking professional assistance in Turkey to carry out the formation a company or a branch process, our experienced team would like to assist you. You can always contact with us via Whatsapp or e-mail.
