Have you ever thought about why people are doing business in Turkey? Thanks to its advantageous trade location between Asia, Europe, and the Middle East, it is logical to trade in Turkey. For this reason, many national and international companies carry out their operations in Turkey. At this point, the following question comes to mind: "How can I establish a company in Turkey?" Thus, in this article, you will find the details of establishing a company in Turkey.
Company Types in Turkey
The first thing you should know about how to establish a company is the types of companies in Turkey that can be opened. But before that, we can talk about the law allowing you to have equal opportunity equality with domestic investors. With the Turkish Foreign Direct Investment (FDI) law, foreign investors are subject to the same rules as domestic investors when transferring shares or establishing a company in Turkey.
According to this law, foreign investors can establish any company listed in the Turkish Commercial Code (TCC). This code offers a corporate management approach that meets international standards. In addition, transparency in management activities plays an encouraging role in public offerings and private equity initiatives. It also brings the Turkish business environment in line with European regulations and accession process.
All these serve different purposes besides establishing a company in Turkey. Some reforms include improving the investment environment, reducing bureaucracy, and making the costs and procedures of opening a company easier. Returning to the issue of the types of companies that individuals can establish, these are of two forms:
- Corporate Forms
- Non-corporate Forms
According to the Turkish Commercial Code, the types of companies that can be established are in these two forms. And they can be expressed in different ways among themselves. Let's start with the first form of company.
Corporate Forms
Corporate companies for establishing a company in Turkey are divided into two as Joint Stock Companies and Limited Liability Companies. The establishment processes are similar, except for certain financial situations and division changes.
Joint Stock Company (JSC)
Joint stock companies are commercial entities whose shares can be bought and sold by shareholders. Each shareholder owns the company's stock according to the documents they have. Therefore, they can transfer their own shares to others without any impact on the company's continuity.
Limited Liability Company (LLC)
There is a limited partnership rule in this specific type of company, as it says in its name. Partners can only lose the capital they have invested, they are not held responsible for losses beyond that. If such a company cannot meet its debts, it cannot demand more from its partners than the capital they have put in.
Non-corporate Forms
Non-corporate companies establishing a company in Turkey are divided into General Partnerships, Limited Partnerships, and Partnership Limited by Shares. Although company types are listed under these five types, the most common company types in Turkey as well as in the world, are Joint Stock Companies and Limited Liability Companies.
General Partnership
In a general partnership, the partners are usually responsible for starting the business from scratch. They may be involved in decision-making and the day-to-day activities of the business. The general partners can use a legal document compatible with a partnership formation. Usually, however, such partnerships are built on the trust and understanding of the partners.
Limited Partnership
Limited partners are people who invest in an already operating business. Therefore, they do not have control over business activities or take part in making important decisions. During the formation of a limited partnership, the partners must prepare the partnership as a business and meet other requirements for registering and forming a limited partnership.
Partnership Limited by Shares
A partnership limited by a Shares company is a hybrid thing between a partnership and a limited liability company. The ownership and capital of the company are shared between the limited liability shareholders and the partners responsible for the company's remaining debts. Shareholders are generally passive investors, while partners manage the company's operations.
How to Establish a Company in Turkey?
In this section, you can find the procedure of opening a company. At this point, the most curious issue is how long the proceedings will take. If the form of your company is clear, the procedures will take up to a week. Everyone knows that opening a business requires money. To establish a company in Turkey, you must first have a certain amount of money. For example, the minimum share capital of a limited company must be at least 10,000 TL.
The next important point is determining where your company will be in Turkey. You need a head office to establish a company in Turkey legally. You have two options for this:
- Opening a real office
- Opening a virtual office
In the first option, you can buy the place where you will open your office for your company. Renting may also be an option. However, this will mean monthly expenses with extra fees.
In the second option, you can use a legal address that does not have a physical location as your virtual office. You can start establishing a company in Turkey with one of these options.
Afterward, it would be best if you met your company's capital in accordance with Turkish legislation. Each type of company has its minimum capital amount. These capital values do not give you any extra rights. However, if you have determined your capital as 100,000 TL, you will have some rights that you can benefit from. For example, you can have more easily privileges such as a work permit and residence visa.
How to Register a New Business in Turkey?
We can list the necessary steps for foreign entrepreneurs who want to establish a company in Turkey to register their companies under this heading. The steps in the list are as follows:
- After deciding on the type of company, it is necessary to prepare the necessary documents in writing and notarize them according to corporate law in Turkey.
- It is necessary to create a bank account belonging to the company and deposit the required minimum share capital into the account.
- The law should determine the directors of the company.
- The Articles of Incorporation, the names and addresses of the shareholders and people in management must be included in the Trade Registry.
- For social security, TAX and VAT numbers must be obtained and registered with the tax office.
This is what needs to be done in order to prepare the necessary documents for establishing a company in Turkey. You can learn more about the procedures for opening a company in Turkey and the documents included here, from the website of the Investment Office.
Paperwork Regarding Establishing a Company
We have listed some of the documents required for establishing a company in Turkey in the above heading. The Articles of Incorporation in this list are the most important of the required documents for the Trade Registry. It contains the main contract, and it must be notarized. In addition, information such as identity information and contribution to the capital of shareholders in the company should also be included in this document.
General Fees and Taxes for Opening a Company
The cost required for establishing a company in Turkey is generally low. However, there may be additional expenses such as registration of the company, notary fees, and commission fees if there is a law firm that manages the process. To get an idea about the prices, you can take the minimum amount of your capital as a basis.
This amount is 10.000 TL for the Limited Liability Company and 50,000 TL for the Joint Stock Company. These are the types of companies that are asked the most about how to establish a company in Turkey.
Company Management in Turkey
Opening a business is short, but maintaining an established business is the most important thing. For this, your company should have good management. For a company you have established in Turkey, there are two paths ahead of you at this point. Either you or a professional you will appoint will have a say in the company's management. This may vary depending on your company type. Therefore, first of all, the type of company should always be determined.
You can contact our firm for Turkish lawyers for establishing a company if you have further questions or need assistance regarding the subject.
