Expert Advice on Establishing a Company in Turkey: What You Need to Know

Establishing a company in Turkey could be an appealing choice for investors and entrepreneurs seeking to benefit from the country's economic strength and strategic location between Europe as well as Asia.

This article will walk you through the complete procedure for establishing an enterprise in Turkey that covers everything from selecting the best organizational structure to getting the permits and licenses required. The question is, how can you establish a business in Turkey?

What is the process for establishing a company in Turkey?

Establishing a company in Turkey can be a complex process, but with proper guidance and attention to detail, it can be a smooth and successful experience. The following is an overview of the key steps and requirements for establishing a company in Turkey.

1. Choose a company type: There are several types of companies that can be established in Turkey, including limited liability companies (LLCs), joint-stock companies (JSCs), and branches of foreign companies. The type of company you choose will depend on your business goals and needs.

2. Reserve a company name: Before registering your company, you must reserve a name with the Turkish Trade Registry. The name must be unique and not already in use by another company.

3. Obtain a tax identification number: You will need to obtain a tax identification number (TIN) from the Turkish tax authorities in order to register your company.

4. Open a bank account: You will need to open a Turkish bank account in the name of your company in order to deposit the required share capital.

A Step-by-Step Guide to Opening a Bank Account in Turkey for Foreign Investors

5. Draft and sign the company's articles of association: The articles of association are a legal document that outlines the structure, purpose, and rules of your company. It must be drafted and signed by the company's founders.

6. Register the company with the Turkish Trade Registry: Once you have completed the previous steps, you can register your company with the Turkish Trade Registry.
the process for establishing a company in Turkey

What documents are required to register a company in Turkey?

Registering a company in Turkey involves a series of legal procedures, and it is essential to have all the necessary documents to ensure a smooth and hassle-free registration process.

Here are the documents required for registering a company in Turkey:

1. Articles of Association: This document outlines the company's objectives, shareholders' details, and the management structure.

2. Notarized Identity Declaration Form: This document confirms the identity of the company's shareholders and directors.

3. Trade Registry Application Form: This form contains critical information about the company, including its name, address, type of business, and shareholders' details.

4. Founding Declaration Form: This document is a legal statement that confirms the company's founders' intention to establish a business in Turkey.

5. Bank Receipt: A bank receipt that confirms the payment of the required capital for registration purposes.

6. Tax Identification Number (TIN): A TIN is a unique identification number issued by the Turkish Revenue Administration, which is required for tax-related transactions.

7. Lease Agreement or Property Deed: A lease agreement or property deed is necessary to confirm the company's registered address.

8. Chamber of Commerce Registration: This document confirms that the company is a member of the relevant Chamber of Commerce.

9. Work Permit and Residence Permit: If any foreign nationals are involved in the company's establishment, they will need to have work and residence permits.
documents required to register a company in Turkey

What types of companies can be registered in Turkey?

Turkey offers a variety of business structures for entrepreneurs and investors to choose from. Here are the types of companies that can be registered in Turkey:

1. Joint Stock Company (JSC) - This is a company with a share capital that is divided into shares. It requires a minimum of one shareholder and one director, and the liability of shareholders is limited to the amount of capital they have contributed. JSCs are suitable for large-scale businesses that require significant funding and a broad shareholder base.

2. Limited Liability Company (LLC) - This is the most common type of company in Turkey. It requires a minimum of one shareholder and one director, and the liability of shareholders is limited to the amount of capital they have contributed. LLCs are suitable for small to medium-sized businesses as they are easier to manage and require less capital than JSCs.

3. Collective Company - This is a partnership agreement where two or more people join together to carry out a commercial enterprise. The partners’ liability is unlimited, and each partner is responsible for the company’s debts and obligations. Collective companies are suitable for businesses where the partners’ expertise and resources complement each other.

4. Commandite Company - This is a limited partnership agreement where there are two types of partners: general partners who manage the company and are liable for its debts and obligations, and limited partners who contribute capital but have no management authority or liability beyond their investment.
types of companies can be registered in Turkey

What are the fees associated with setting up a company in Turkey?

Setting up a company in Turkey involves various costs, including administrative fees, legal fees, and taxation. The fees associated with establishing a company in Turkey vary based on the type of company being formed, the amount of authorized capital, the location of the business, and other factors.

The first step in setting up a company in Turkey is to register with the Trade Registry Office. The registration fee for this process is typically around 950 Turkish Lira (TRY), which is equivalent to approximately $115 USD. Additionally, there are notarization fees for documents required for the registration process, which can range from TRY 200 to TRY 500 ($24 to $60 USD) per document.

After registering the company, the next step is to obtain a tax number from the Tax Office. This process is usually free of charge, but there may be additional costs associated with obtaining other licenses or permits required for the operation of the business.

There are also legal fees associated with setting up a company in Turkey, which include lawyer fees and translation fees. Legal fees can vary depending on the complexity of the legal requirements and the expertise of the lawyer hired. Translation fees may also be necessary for documents that are not in Turkish.

In addition to the fees mentioned above, companies in Turkey are subject to various taxes, including corporate income tax, value-added tax (VAT), and social security contributions for employees. The corporate income tax rate in Turkey is currently 22%, while the VAT rate is 18%.
the fees associated with setting up a company in Turkey

What are the necessary steps to obtain a business permit in Turkey?

If you are planning to start a business in Turkey, obtaining a business permit is a crucial step to making your business operation legal. Here are the necessary steps to obtain a business permit in Turkey:

1. Determine the type of business you want to establish: Before starting the business permit application process, you need to decide on the type of business you want to establish. This is important because the requirements for obtaining a business permit in Turkey vary depending on the type of business you want to operate.

2. Choose a legal structure: In Turkey, there are three legal structures for businesses: sole proprietorship, limited liability company (LLC), and joint-stock company. You need to choose a legal structure that suits your business needs.

3. Reserve a company name: You need to reserve a company name with the Turkish Trade Registry Office. The company name should be unique and not already registered.

4. Obtain a tax identification number: You need to obtain a tax identification number from the Turkish Tax Administration. This is a unique number that identifies your business for tax purposes.

5. Prepare the necessary documents: Depending on the legal structure of your business, you need to prepare the necessary documents, such as the Articles of Association, Memorandum of Association, and Shareholders Agreement.

6. Register your business with the Trade Registry Office: After preparing the necessary documents, you need to register your business with the Turkish Trade Registry Office. This is the process of officially establishing your business in Turkey.

7. Obtain a Work Permit
the necessary steps to obtain a business permit in Turkey

Are there any special regulations that apply to establishing a company in Turkey?

Yes, there are several special regulations that apply to establishing a company in Turkey. These regulations are designed to ensure that businesses operate in a fair and transparent manner and comply with the country's legal requirements.

The first step in establishing a company in Turkey is to determine the legal form of the business entity. There are several legal forms available, such as limited liability companies, joint stock companies, and cooperatives. Each legal form has its own set of requirements, such as minimum capital requirements, number of shareholders, and management structure.

Once the legal form of the company has been determined, the company must register with the Turkish Commercial Registry. This registration process involves submitting various documents, such as the company's articles of association, tax registration certificate, and the identification documents of the company's founders.

In addition to registration requirements, there are also certain regulations that businesses must follow in Turkey. For example, all companies must obtain a tax identification number and register for social security with the Turkish Social Security Institution. There are also regulations related to labor and employment, such as minimum wage requirements and maximum working hours.

Furthermore, foreign companies looking to establish a presence in Turkey may be subject to additional regulations. These can include restrictions on foreign ownership and requirements to obtain certain permits or licenses.

Overall, establishing a company in Turkey requires careful attention to detail and compliance with various regulations. It is advisable to seek the assistance of a local expert or legal advisor to ensure that all requirements are met, and the company is set up for success.
special regulations that apply to establishing a company in Turkey

What taxes must be paid when setting up a company in Turkey?

When setting up a company in Turkey, there are various taxes that must be paid. These taxes ensure that the company is operating legally and contributing to the Turkish economy. Here are some of the taxes that you need to be aware of when starting a company in Turkey:

1. Corporate Income Tax: This tax is levied on the net income of the company. The current rate is 22%, and it is applied to profits earned in Turkey.

2. Value Added Tax (VAT): VAT is charged on most goods and services in Turkey. The standard rate is 18%, but there are reduced rates for some items such as food, books, and medicine.

3. Stamp Duty: Stamp duty is payable on certain legal documents such as contracts, agreements, and deeds. The rate varies between 0.189% and 0.948% of the document's value.

4. Social Security Contributions: Employers in Turkey are required to contribute to the Social Security system. These contributions cover health insurance, retirement benefits, and unemployment insurance.

5. Withholding Tax: This tax is deducted from payments made to employees, suppliers, and contractors. The rate varies depending on the type of payment and the recipient's status.

6. Property Tax: If your company owns property in Turkey, you will need to pay property tax. The rate is determined by the municipality where the property is located.

7. Environmental Tax: Companies that produce or import products that have a negative impact on the environment may be.
taxes must be paid when setting up a company in Turkey

What are the advantages of establishing a company in Turkey?

Turkey is a country that has been attracting investors from all around the world for many years. It has a strategic location that bridges Europe and Asia, a large consumer market, a skilled workforce, and a favorable business environment. Here are some advantages of establishing a company in Turkey.

1. Strategic location: Turkey's location at the crossroads of Europe and Asia makes it an ideal destination for businesses that want to expand their reach beyond their home markets. The country is easily accessible by air, sea, and land, and it provides a gateway to many emerging markets in the region.

2. Large market: Turkey has a population of over 80 million people, making it the 16th largest economy in the world. This large consumer market presents significant opportunities for businesses that want to expand their customer base and increase their revenue.

3. Skilled workforce: Turkey has a young and educated workforce that is well-suited for a variety of industries. The country has a strong tradition of vocational education and training, and many of its universities offer programs in business, engineering, and other fields.

4. Favorable business environment: Turkey has been implementing economic reforms that have made it easier for businesses to operate in the country. The government has reduced red tape, simplified procedures, and lowered taxes to attract more foreign investment.

5. Incentives for investors: The Turkish government offers various incentives for investors who establish a company in the country. These include tax exemptions, subsidies, and other financial support.
advantages of establishing a company in Turkey

What types of businesses are prohibited from being established in Turkey?

Turkey has a comprehensive set of laws and regulations regarding the establishment of businesses in the country. There are certain types of businesses that are prohibited from being established to maintain social and economic stability, protect national security, and prevent illegal activities.

One of the major types of businesses that are prohibited in Turkey is those related to illegal drugs, narcotics, and psychotropic substances. It is illegal to produce, sell, or distribute any such substances in the country. Businesses involved in these activities are strictly prohibited and are subject to severe penalties and imprisonment.

Similarly, businesses related to gambling and betting are also prohibited in Turkey. This includes casinos, online gaming websites, and other similar establishments. The only exception to this rule is the state-run lottery, which is allowed under strict regulations.

Turkey also prohibits businesses that are considered harmful to the environment, public health, or public morality. This includes businesses involved in the production or sale of products that are dangerous to human health, such as cigarettes or certain chemicals. It also includes businesses that promote unethical or immoral practices, such as adult entertainment or prostitution.

Finally, certain types of foreign investments are also prohibited in Turkey. For example, foreign investment in the defense and aerospace industries is subject to strict government regulation and approval. Similarly, investment in certain strategic sectors, such as energy, telecommunications, and transportation, is subject to government approval.

It is important for individuals or companies interested in establishing a business in Turkey to conduct thorough research and comply with all relevant laws and regulations.
types of businesses are prohibited from being established in Turkey

Conclusion

In conclusion, establishing a company in Turkey can be a lucrative opportunity for investors. The country's strategic location, skilled workforce, and favorable investment climate make it an attractive destination for businesses seeking to expand their operations.

However, it is important to note that Turkey has strict laws and regulations regarding the establishment of businesses, and certain types of businesses are prohibited. Investors must conduct thorough research and comply with all relevant laws and regulations to ensure their success in Turkey.

With the right approach and a keen understanding of the local business environment, investors can benefit from the numerous incentives and opportunities available in Turkey.
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