With its strategic location connecting Europe and Asia, Turkey can become an attractive centre for foreign investors. Foreign entrepreneurs considering establishing a company in Turkey can confidently carry out their incorporation process by following the specific legal regulations step by step.
For further information, please refer to the detailed guide below and the Frequently Asked Questions (FAQ) section at the end of the guide:
Can You Establish a Company in Turkey?
Turkish legislation (primarily the Turkish Commercial Code No. 6102 (TCC) and the Foreign Direct Investment Law No. 4875) allows foreign investors to establish companies of any type. However, the most preferred company types are the joint stock company (JSC) and the limited liability company (Ltd.). The main rules regarding company types in Turkey as well as the principal matters concerning joint stock companies and limited liability companies are as follows:
Capital Companies |
· Joint Stock Company
· Limited Liability Company
· Partnerships Limited by Shares |
Partnership |
· General Partnership
· Ordinary Partnership
· Limited Partnership |
In the most common company types, namely the Joint Stock Company and the Limited Liability Company, incorporation with a single shareholder is possible, and the shareholders may consist of either natural persons or legal entities. Moreover, there is no restriction on all shareholders of such companies being foreign individuals or entities.
Joint Stock Companies (JSC)
- Minimum capital: 250,000 TRY (500,000 TRY under the registered capital system)
- Capital Payment: At least 25% must be paid at the time of incorporation, with the remaining amount payable within 24 months.
- Mandatory Corporate Bodies: Board of Directors and General Assembly
- Shareholders’ liabilities: Limited to the amount of capital they have undertaken to contribute.
Limited Liability Companies (Ltd.)
- Minimum capital: 50,000 TRY
- Capital Payment: No payment is required upon incorporation; the full amount must be paid within 24 months.
- Mandatory Corporate Bodies: Board of Managers and the General Assembly
- Shareholders’ liabilities: If public receivables (as defined under the Law on the Procedure of Collection of Public Receivables No. 6183, including taxes, social security premiums, municipal receivables, and other claims collectible by the state and public authorities) cannot be collected from the company, shareholders are personally liable with their own assets in proportion to their shareholding.
Duties of Company Bodies
Joint stock companies and limited liability companies are required to have a general assembly and a management body (board of directors for joint stock companies and board of managers for limited liability companies).
In essence, the general assembly consists of the company’s shareholders and, under the TCC, is exclusively authorized to decide on matters such as amendments to the articles of association, the appointment and dismissal of auditors, the approval of financial statements and annual reports, the declaration of dividends and profit distributions, or the dissolution of the company. These matters are non-delegable and cannot be transferred to the management body.
Among the non-transferable powers of the general assembly of a joint stock company are also the appointment and dismissal of board members as well as the determination of their financial rights.
Similarly, the general assembly of a limited liability company is authorized to decide on matters such as the appointment and dismissal of managers and the determination of their financial rights, filing an action before the court for the expulsion of a shareholder, or granting approval for the company to acquire its own shares.
In joint stock companies, the board of directors, and in limited liability companies, the board of managers, are primarily responsible for the day-to-day management of the company and the execution of strategic decision-making processes.
The Incorporation Process of Companies Consists of the Following Basic Steps:
1. Obtaining a Tax Identification Number
Regardless of whether a limited liability company or a joint stock company is chosen, the first step is to obtain a potential tax identification number for foreign shareholders and foreign company representatives (i.e., members of the board of directors in joint stock companies and managers in limited liability companies). These individuals may apply directly to the tax office or authorize a representative to apply on their behalf.
2. Signing the Articles of Association and Capital Payment
The next step is the signing of the Articles of Association. This procedure may be carried out either before a notary public or at the relevant Trade Registry Directorate, either by the shareholders themselves or through an authorized representative. At the same time, the initial share capital must be deposited into a temporary bank account specifically designated for this purpose. Depending on whether the capital is to be paid before or after incorporation, the bank initiates the Know Your Customer (KYC) process.
3. Submission of the Incorporation File to the Trade Registry
The application for company incorporation must be made through MERSIS, the national e-registration system, and an appointment must be scheduled with the relevant Trade Registry Directorate. On the appointment date, either the applicant in person or their authorized representative must appear before the Trade Registry Directorate to present the originals of the required documents for the officer’s review. The incorporation of the company is completed on the same day. The documents that must be submitted are as follows:
- Petition for registration with the trade registry
- Chamber of Commerce registration declaration
- Notarized articles of association (an alternative, and less costly, option is for the shareholders of the company to execute the articles of association in the presence of the registry officer at the Trade Registry Directorate; however, it should be noted that if a portion of the share capital is required or expected to be deposited in advance into the temporary bank account, then the articles of association must be executed before a notary public)
- Bank statement confirming payment of the required minimum capital amount.
4. Company Registration, Statutory Books and Signature Circulars
Once the official at the Trade Registry Directorate confirms that the incorporation file is complete and the required registration fees have been paid, the company is registered. Following the registration, the statutory company books must be obtained, and signature circulars for the authorized representatives may be issued before a notary public.
5. Tax Office Registration
In the final step, tax officials visit the company headquarters and assign a tax number to the company. Once the tax registration is complete, the company formation process is officially finalized.
The incorporation of a branch or liaison office is subject to additional authorizations and documentation, and the specific requirements may differ based on the nature of the activity and the place of establishment.
Frequently Asked Questions
Can a company be established with a single shareholder?
Yes, both a Limited Company (Ltd. Şti.) and a Joint Stock Company (A.Ş.) can be established with a single shareholder.
When must the capital contribution be made?
For joint stock companies (JSC), at least 25% must be paid at the time of incorporation; for limited liability companies (Ltd.), there is no payment requirement at the time of incorporation.
Do I need to reside in Turkey to establish a company?
No, there is no residence requirement for establishing a company in Turkey. However, foreign partners or representatives must obtain a tax identification number.
What is the minimum capital requirement?
For limited liability companies, the minimum share capital is 50,000 TRY, while for joint stock companies it is 250,000 TRY.
Is it mandatory for one of the company partners to be a Turkish citizen or to reside in Turkey?
No, all shareholders may be foreign persons or entities.
Can legal entities be appointed as board members or directors?
Yes, legal persons may be appointed as directors in limited companies and as board members in joint stock companies. The legal entities so appointed must also designate a natural person representative to be appointed in the process.
Can the management bodies of a company consist of foreign persons or entities?
Yes, in limited liability companies, managers, and in joint stock companies, board members, may be foreign. However, if the appointee is a natural person, a foreign identification number must be obtained; if it is a legal person, a tax identification number is required. In practice, tax offices may request that at least one representative be a resident in Turkey.
Do I need to open a physical office to set up a company in Turkey?
Yes, the company must have a legal address. However, this can be a virtual office or a co-working space.
As a foreigner, do I need permission to set up a company in Turkey?
Permits are not required for most sectors, but special permits or approvals may be required in some areas. For more detailed information on this subject, please refer to our article on FDI here.
How long does it take to set up a company?
If all documents are submitted correctly, the process is generally completed within 1–2 weeks.
Do shareholders in a public limited company or limited company have any legal or criminal liability?
They are liable in very limited circumstances. For instance, in a corporate group, a controlling shareholder may be held liable towards minority shareholders and creditors for damages arising from the decisions imposed on a subsidiary. The rules governing the liability of the parent company are set forth under Articles 202 et seq. of the TCC.
How is a company bank account opened?
After the company is registered, a bank account is opened in the name of the company. As part of Know Your Customer (KYC) procedures, banks may request various documents from the shareholders or managers of the company.
Does a foreign partner have the right to obtain a residence permit in Turkey after the company is established?
Company partnership does not automatically grant a residence permit.
Can I obtain a work permit in Turkey after the company is established?
Foreign shareholders or managers of a company must obtain a work permit from the relevant Ministry in order to be able to work in Turkey in practice. A work permit is not granted automatically following incorporation; the conditions under the legislation must be met.