How Can I Start a Business in Turkey?

Due to its unique trading location between Asia, Europe and the Middle East, Turkey has attracted foreign investment for many years. Turkey is recognized as an important country in the world and many public and international companies have opened offices in and around major Turkish cities. The vast majority of these large companies are based in Istanbul and Ankara.

Why Set Up a Company in Turkey?

Recent legislation encouraging foreign investment means that starting a business in Turkey is easier than ever. It's easy to see why Turkey is an attractive destination for new businesses: half of Turkey's 80 million people are under 30, they're increasingly educated, and they have plenty of cash to spend. Banking and communications infrastructure improved significantly, as did trade links with Europe and the Middle East.

Recent government incentives for investors and new businesses include:

• Foreign companies are entitled to “Turkish company” status, giving new business owners the same rights and obligations as existing Turkish companies;
• Secure existing investment rights;
• In line with international standards;
• Amending the definition of foreign investor to include foreign incorporated companies, non-Turkish nationals and Turkish nationals residing abroad;
• The import of certain machines and systems is now exempt from duties, taxes and VAT;
• exemption from certain income taxes and social security contributions;
• energy subsidies;
• Incentives offered by the Turkish Free Trade Zone, including exemption from a range of taxes and duties;
• Better protection of foreign investors.
• Since 2018, it is possible for entrepreneurs to obtain Turkish citizenship. Go to the bottom of the page to learn more.

So How to Set Up a Company in Turkey?

If you are considering starting a business in Turkey, you have several options. First, you need to seek solid legal advice and research from the relevant authorities. General partnerships, joint stock companies, limited partnerships (companies registered under a trade name), liaison offices, and establishing a branch of an existing foreign company are all options that foreigners may consider. In this article, however, we will focus on the relatively straightforward (and therefore most popular) limited liability company formation.

Can Foreigners Set Up a Limited Liability Company in Turkey?

Yes. A limited liability company is the most popular company form for foreigners and can be established by two or more non-Turkish nationals. At least one shareholder is required to form such a company, with a minimum share capital of TRY 10,000.

Where Can I Get Advice on Setting Up a Company in Turkey?

For many people, the first point of contact is an attorney. Make sure you engage the services of a good legal advisor who understands Turkish corporate law and has previously helped expats set up successful companies. In addition, the following information is current and forms the basis for most of the information in this article:

• Turkish Embassy
• British Chamber of Commerce in Turkey (BCCT)
• Turkish-British Chamber of Commerce and Industry (TBCCI)

Should I Use a Company Formation Agent?

Similar to the UK, more and more company formation agents advertise their services in the local media and can be found in most cities. Many expats choose this route because finding a good agent can save you time and hassle. If you're considering using one, do your research first and find out what other expat companies they co-founded. As with anything, some of these companies are much better than others.

What Type of Company Can Foreigners Set Up in Turkey?

Most expats tend to start businesses that have some connection to tourism or serve the needs of other expats. Bars, restaurants, hotels, vacation rental companies, real estate agencies, shops and maintenance companies seem to be the norm and are usually easy for foreigners to organize and run. Foreigners are not allowed to open many companies in Turkey without prior approval from the Ministry of Trade and Industry. These include banks, factoring businesses, private financial institutions, exchange offices, capital market companies, public warehouses and free trade zone operators. If in doubt, ask your lawyer and the authorities ahead of time.

How Much Does It Cost to Set Up a Turkish Limited Company?

The legal requirements and costs of doing business in Turkey differ from those in the UK and most other countries. The total cost of a limited liability company is TRY 10,000, which must be deposited at the initial stage of incorporation. The liability of the partners is limited to investing in the company's share capital.

What is the Setup Process?

The process of setting up a company in Turkey is relatively simple, and if all goes well, investors can start trading within a week.

The first task is to draft the Articles of Association, which must be signed by the directors of the company. The articles of association of the company must be legally drafted and comply with the provisions of Article 279 of the Turkish Commercial Code. The document must include the word "Limited" in the company's trade name. Founders must provide their nationality, full name, surname, address and business address. The document will then be officially notarized and translated if necessary.

The minimum share capital must be deposited into a bank account in the name of the company. Afterwards, the investor can start the registration process at the Turkish Commercial Registry with the required documents and pay a fee. The registry issues a certificate of registration and the company's incorporation is published in the Turkish Official Gazette. The company must then register for VAT with the relevant tax authorities.

Turkish Laws Regarding Business Names

Your business name must be original and not have been registered by anyone before. It should not mislead third parties and "Turkiye; Turks; Cumhuriyet; Milli shall not be used without the express consent of the Council of Ministers of Turkey". Foreign words and names may be used in product titles only if they do not conflict with any governmental or cultural laws or policies.

How to register your Turkish company with the Commercial Registry

The Turkish Chamber of Commerce has offices in all major cities and most cities in Turkey. After completing and notarizing your Articles of Incorporation, please contact them within 15 days to organize the official trade register. To register, you will need a completed company registration application form, a written application for registration, appropriate identification proving you are a founding member, a letter of undertaking under Rule 29 of the Business Registration Rules and required payment receipts deposited into a client account (usually 1/1000 of the company's capital). This may sound more daunting than it is, but to avoid long waits and unnecessary confusion, make sure you have adequate legal knowledge or support, and can speak, read, and write adequate Turkish. In most cases, it is best to bring a native speaker. After registration, your company is ready to start trading.

Current Trade and Taxation

A limited liability company incorporated and resident in Turkey must pay full taxes on profits earned and declared. Also, you will need to hire the services of an accountant, keep in mind that accountants in Turkey work differently than in the UK and are usually charged a monthly fee, which in some cases may appear to be a problem when they complete certain tasks in relatively little time Very expensive time. Laws and taxes change frequently. Therefore, consult a good accountant before starting your business.

General Tips and Advice

do your homework. Before you even consider starting a business in Turkey, make sure you have done your research. Talk to other expats in the business world, your lawyers and accountants to assess whether it is really a viable option or if you should invest elsewhere. You'll hear many horror stories from expats who have opened shops, restaurants and businesses that have failed and ended up with businesses that never closed. Make sure your idea is a winner!

Create your business plan. Before starting your business, clarify your goals and expectations. Research the setup and ongoing costs of running a business (accounting fees, marketing, taxes, etc.). It is unlikely that you will be required to submit a business plan in Turkey, but you will have your business thoroughly checked and considered.

language disability. The process and paperwork required to set up a company in Turkey is done in Turkish. So make sure you understand the language well, or seek the services of a trusted Turkish speaker to help you every step of the way.

Entrepreneur Naturalization by Investment

Since 2018, everyone who wants to do business in Turkey has been given an additional incentive. The Turkish government now offers citizenship to anyone who invests $250,000 in Turkish property. For business owners, this saves a lot of bureaucracy.

In addition to buying real estate, there are other avenues for entrepreneurs to obtain citizenship:

1. Employment opportunities for at least 50 people in Turkey
2. Make a fixed investment of at least US$500,000;
3. Deposit at least USD 500,000 into a Turkish account;
4. $500,000 venture capital investment fund.

Please Note: While we have researched and tried to give you accurate advice, please remember that this information should not be construed as legal advice and is provided for informational purposes only.