Turkey: Investing To Turkey

Last Updated: 16 May 2017
Article by Ziya Ugur and Ebru Ceyhan

Turkey as a developing country has shown remarkable performance with its steady growth over the last years. Although the economic and social crisis, Turkey keeps to be attractive for foreign and domestic investors for some strong reasons such as government promotions, qualified workforce and transportation network.

For the make business in Turkey with legal entity, the companies could be listed as:

  • Joint stock company
  • Limited liability company
  • Cooperative company
  • Collective company
  • Commandite company

1- Establishment of a Joint Stock Company and Limited Liability Company

The limited liability company and joint stock company is the most popular company types in Turkey.

Requirements for establishing limited liability company are,

  • At least one shareholder to form this type of company
  • A minimum share capital in amount of TRY 10.000

The liability of shareholders is limited to the amount of share capital invested in the company.

Requirements for establishing joint stock company are;

  • A minimum share capital in amount of TRY 50.000.
  • This type of company has different rules regarding the company management process: it must have at least one shareholder and a mandatory board of directors.

The liability of the members is limited to the amount of invested capital. The capital is divided into stocks which can be made public when the company is listed on the Stock Market. Joint stock company would be better choice to make and organize large size business.

Joint Stock Company and Limited Liability Company share the same formal requirements for establishment. Although the LLC and JSC have differences on the amount of founding capital, organization of administrative etc. their differences are not too much.

In Turkey, Establishment of a joint stock company does not required many formal steps. The Joint Stock Company and Limited Liability Company may established in 2 or 3 days if the documents listed below has been prepared already. Mainly the steps mentioned below shall be followed to establish the company in Turkey.

  1. A petition signed by authority of the Company shall be submitted.
  2. Organization information form shall be filled (3 copies for non foreign establishments, in case of foreign establishment 4 copies must be filled)
  3. Notarized passport translation copies of foreign real person, tax number or residence permit.
  4. Articles of association and memorandum are submitted online at MERSİS which is a central information system for carrying out commercial registry processes and storing commercial registry data electronically on a regular basis.
  5. Signature Statement of company's authorized person under the company name.
  6. Bank receipt for competition authority fee.
  7. Bank letter shown that the share price had been paid by the shareholders at least the minimum amount indicated by articles of association or articles of law. (It is generally one in four)
  8. Chamber registration declaration.
  9. The declaration that accepts the duty of being a member of the board of directors for someone who is not a shareholder. For foreign, tax number or ID number for foreign, notarized passport translation and notarized permit of residence if there is.
  10. If legal entity is chosen to be a member of board of direction, a notarized decision of the legal entity with name-surname of the person who act with and on behalf of legal entity, ID number (If the person is foreign, the tax number is required)

Above mentioned documents shall be given to İstanbul Chamber of Commerce for registration and announcement. Most probably, documents shall be registered after they are delivered to İstanbul Chamber of Commerce.

2- The Stimulus Means For Foreign Investors

Turkey being a developing country is open market to investors for many sectors. Investors prefer Turkey to invest for some reasons such as;

  1. Qualified and competitive labor force,
  2. Liberal and reformist investment environment,
  3. Infrastructure,
  4. Centrally located,
  5. Energy corridor and terminal of Europe,
  6. Low taxes and incentives,
  7. Customs union with the EU since 1996,
  8. Large domestic market
  9. Successful economy

According to data of Turkish Statistical Institute (TSI) Gross Domestic Product (GDP) has increased from USD 213,000,000,000 up to USD 800,000,000,000 within the last 12 years. In still the same period, annual average of GDP has risen %4,7.

In consequence of the crises, government give rights and exemptions to domestic and foreign investors by means of stimulus in order to encourage them. The foremost and striking means of stimulus accorded by the government are indicated below:

a- Turkish citizenship

Republic of Turkey provides Turkish citizenship for foreign investors meet at least one of the requirement mentioned below.

  • Made a min. fixed capital investment of USD 2,000,000
  • Acquired real estate worth a minimum of USD 1,000,000 with a title deed restriction on its resale for at least three years,
  • Employed at least 100 people,
  • Deposited at least USD 3,000,000 in banks operating in Turkey with the condition of not to withdraw for at least three years,
  • Bought at least USD 3,000,000 worth of government bonds with the condition that they cannot be sold for at least 3 years

b- Tax Immunity

Having made an investment of 1,000,000 -TL in capital provinces and of 500,000 - TL in other provinces of Turkey, domestic and foreign investors shall be granted exemption from tax tariff and VAT. Tax tariff include importation of machine and equipment. However, we would like to remind that some type of investments cannot take benefit from this investment promotion.

Investors are also provided with;

  • Corporate tax cut,
  • Income tax reduction,
  • Counselor support,
  • Turnkey operation,
  • Investment area allowance,
  • Investment credit,
  • Working capital loan,
  • Assurance of credit guarantee fund

Within the context of investment incentive certificate, payment of VAT for domestic or imported machine and equipment shall not be required.

Income and corporate tax is calculated over discount rates until the rate of total tax abatement reaches up to the rate of contribution to investment. The rate of contribution to investment would predicate the rate of total fixed investment amount which subjects to tax reduction.

From current news, the most striking investments are from a German company and from Abu Dabi Investment Group that are to invest EUR 100,000,000 and USD 100,000,000,000 respectively in Turkey.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.