Company Formation in Turkey : How to Setup a Company in Turkey?
Establishing company in Türkiye is a relatively straightforward process, but it involves several steps and legal requirements that must be carefully followed. Below is a step-by-step guide on how to setup a business in this country, focusing on the two most common types of businesses: Limited Liability Company (Ltd. Şti.) and Joint-Stock Company (A.Ş.).
Steps of Company Formation
1.Choose the Type of Company
- Decide on the legal structure of your company. The most common types are:
- Limited Liability Company (Ltd. Şti.): Best for small to medium-sized businesses, with fewer than 50 shareholders.
- Joint-Stock Company (A.Ş.): Best for larger businesses or those planning to go public.
2.Prepare the Required Documentation
You’ll need several documents to proceed with the registration. These may include:
- Passport copies (for foreign investors).
- Turkish Tax ID Number (for all shareholders and directors, which can be obtained from the Turkish Tax Office).
- Company name (check availability with the Turkish Trade Registry).
- Articles of Association (a document outlining the structure, goals, and operations of the company).
- Notarized signatures from company directors and shareholders.
- Proof of address (for directors or the company’s headquarters).
3.Open a Bank Account and Deposit Capital
- Open a Turkish bank account in the name of the company. The bank will provide a letter confirming the deposit of capital.
- For a Limited Liability Company (Ltd. Şti.), the minimum capital requirement is TL 50,000 (about 1.300 USD).
- For a Joint-Stock Company (A.Ş.), the minimum capital requirement is TL 250,000 (about 6,600 USD).
- Deposit the capital into the company’s account. The bank will give you a confirmation of the deposit, which you will need to submit during registration.
4.Register the Company with the Turkish Trade Registry
- Submit the company’s application to the Turkish Trade Registry (Ticaret Sicili), which is under the control of the Ministry of Trade.
- Submit documents such as:
- Articles of Association.
- Proof of capital deposit.
- Identification and signatures of shareholders and directors.
- Proof of address for the company.
- Once your company’s name is approved and registration is complete, you will receive the Company Registration Certificate and be included in the Turkish Trade Registry.
5.Register for Taxation
- Obtain a tax number from the Turkish Tax Office (Vergi Dairesi) for your company. This tax number will be used for all dealings with the government, including tax filings.
- Register your company for Value Added Tax (VAT) if your company is required to charge VAT on its products or services. The standard VAT rate is 20 %.
- If applicable, also register for Social Security and Insurance for your employees.
6.Notarize the Company’s Articles of Association
- Instead of signing at the Trade Registry Office, the Articles of Association can be notarized by a public notary to confirm the structure, activities, and operation of the company.
- This document outlines the roles of the shareholders, directors, and general structure of the company.
7.Obtain a Trade Registry Gazette Publication
- After your company is registered with the Turkish Trade Registry, an official publication in the Trade Registry Gazette (Ticaret Sicili Gazetesi) is required to notify the public about your company’s existence and legal status.
- The publication will contain the company’s legal name, registration number, and other details.
8.Register Employees with the Social Security Institution
- If your company plans to hire employees, you must register with the Social Security Institution (SGK). This registration ensures that employees will receive social security and health insurance coverage.
- Companies must also contribute to employee pension funds and healthcare insurance, which are mandatory in the country.
9.Apply for Licenses and Permits (if necessary)
- Depending on your type of business, you may need additional licenses or permits to operate legally. For example:
- Businesses in certain industries (e.g., food, healthcare, construction, tourism) may require specific operating licenses.
- Some businesses may need to register with local municipalities or environmental agencies.
10.Set Up Accounting and Bookkeeping
- You are required to keep accurate financial records and file tax returns regularly. It’s recommended to hire a certified public accountant (CPA) or a tax consultant who can guide you on tax filings and ensure your company complies with Turkish financial regulations.
- You’ll need to file tax returns periodically (monthly or quarterly, depending on your size), pay VAT, and comply with other financial regulations.
11.Start Operations
- Once your company is registered, you can start operating legally in the country, including issuing invoices, hiring employees, and launching your products or services in the market.
Additional Considerations for Foreign Investors
Local Partner: While foreign investors can own 100% of their Turkish business, having a local partner or representative can help navigate the legal and bureaucratic landscape.
Residency: If you plan to stay in the country for an extended period, you may need to apply for a residence permit. Investors who create a business that generates employment may be eligible for residency under Turkey’s investment incentives program.
Language: While many Turkish officials speak English, business documents, such as your Articles of Association, must be in Turkish. It’s recommended to hire a legal translator or consultant for documents to ensure accuracy.
Summary of Key Steps to Company Setup
- Choose the type of company (Ltd. Şti. or A.Ş.).
- Gather the required documents (ID, address, tax numbers, etc.).
- Open a Turkish bank account and deposit the required capital.
- Register your company with the Turkish Trade Registry.
- Apply for a tax number and VAT registration.
- Notarize the Articles of Association.
- Get the publication in the Trade Registry Gazette.
- Register with Social Security for employees.
- Obtain any required licenses and permits.
- Set up accounting and bookkeeping systems.
- Begin operations and comply with all legal and tax obligations.
Establishing company in Türkiye is easy and fast. By following these steps and working with legal, tax, and business professionals in Turkey, you can successfully start a business in the country and begin your operations. Please feel free to contact us for more information and further inquiries about our unique services. You can also subscribe to Tacirsoft Hukuk Bilgi Sistemi, that is Turkey’s only Corporate Law and Organized Industrial Zones Law database.
