Setting Up a Business in Turkey as a Foreigner

Why Start a Business in Turkey?

Turkey has become a prime destination for foreign entrepreneurs and investors due to its strategic location between Europe and Asia, dynamic economy, and business-friendly policies. The country offers a large consumer market, a skilled workforce, and access to international trade networks. Additionally, Turkey allows foreigners to establish businesses with 100% ownership, providing numerous investment incentives and tax advantages. Whether you are looking to start a new venture or expand your existing business, Turkey offers a stable and growing business environment.

Business Structures in Turkey

When setting up a business in Turkey, selecting the right legal structure is crucial. The main types of business entities available to foreign investors include:

1. Limited Liability Company (LLC)

• The most preferred business structure due to its flexibility and limited liability.
• Requires at least one shareholder and a minimum capital of 50,000.
• Suitable for small to medium-sized businesses.

2. Joint Stock Company (JSC)

• Ideal for larger businesses seeking investment and stock issuance options.
• Requires a minimum capital of 250,000.
• Shareholders’ liability is limited to their capital contributions.

3. Branch Office

• Suitable for foreign companies looking to operate in Turkey without establishing a separate legal entity.
• The parent company is fully responsible for the branch’s liabilities.

4. Liaison Office

• Cannot engage in commercial activities but serves as a representative office.
• Typically used for market research and networking before establishing a full-scale business.

Steps to Register a Business in Turkey

Establishing a business in Turkey involves several legal and administrative steps. Here’s a step-by-step guide:

1. Choose the Right Business Structure

Decide whether you want to set up an LLC, JSC, branch, or liaison office based on your business goals.

2. Obtain a Tax Number

Foreigners must apply for a Turkish tax number at the local tax office or online.

3. Prepare Required Documents

The necessary documents include:

• Passport copies of foreign shareholders
• Tax identification number
• Articles of Association (AoA)
• Signature declaration
• Notarized power of attorney (if applicable)

4. Register with the Trade Registry

• Submit all required documents to the Trade Registry Office.
• Obtain a company registration number.
• Publish the company details in the Turkish Trade Registry Gazette.

5. Open a Business Bank Account

• Deposit the required minimum capital.
• Register for tax and social security obligations.

6. Obtain Necessary Licenses and Permits

• Depending on the business activity, additional permits may be required.

7. Register for VAT and Social Security

• Obtain a VAT number for tax purposes.
• Enroll employees in the Turkish Social Security system.

Legal & Tax Considerations for Foreign Investors

Understanding Turkey’s tax system and legal requirements is essential for running a successful business.

Corporate Tax

• The standard corporate tax rate is 20% (subject to updates).
• Certain investment incentives and tax reductions are available.

Value Added Tax (VAT)

• VAT rates vary based on the business sector:
  • 1% (e.g., some food and agricultural products)
  • 8% (e.g., healthcare and education services)
  • 20% (general rate for most goods and services)

Work and Residence Permits

• Foreign business owners and employees need work and residence permits.
• Investors can apply for a self-employment residence permit.

Benefits of Partnering with a Legal Expert

Starting a business in a foreign country involves navigating complex regulations, contracts, and tax compliance. Partnering with an experienced law firm ensures:

• Seamless company registration without errors or delays.
• Proper drafting of legal agreements to protect your interests.
• Compliance with Turkish corporate laws and tax obligations.
• Efficient handling of work and residence permits for business owners and employees.

Start Your Business in Turkey with Expert Legal Support

Our law firm specializes in assisting foreign investors with company formation, legal documentation, and tax compliance in Turkey. We provide tailored legal solutions to ensure a smooth and legally sound business setup.

Contact us today for professional guidance on launching your business in Turkey!