Setting up a Startup in Turkey: A Comprehensive Guide
Turkey is rapidly emerging as a global hub for startups, thanks to its strategic location, vibrant economy, and supportive ecosystem. Setting up a startup in Turkey offers numerous opportunities, especially for entrepreneurs looking to tap into the markets of Europe, Asia, and the Middle East. This article will provide a step-by-step guide on how to establish a startup in Turkey, covering legal requirements, business structures, incentives, and more.
What is Startup?
A startup is a young company founded by one or more entrepreneurs to develop a unique product or service and bring it to market. Startups typically aim to solve a problem or fulfill a demand that isn't being adequately addressed by existing solutions. They often operate in a state of uncertainty, with a focus on innovation, scalability, and growth potential. Startups usually seek investment from venture capitalists or angel investors to fuel their growth, especially during the early stages when they may not yet be profitable.
Why Choose Turkey for Your Startup?
Turkey's growing economy, young population, and government incentives make it an attractive destination for startups. The country has a thriving tech scene, with many incubators, accelerators, and technoparks providing support to new businesses. Additionally, Turkey's customs union with the European Union and free trade agreements with various countries offer startups the potential to expand internationally with ease.
Legal Structures for Startups in Turkey
When setting up a startup in Turkey, one of the first decisions you'll need to make is choosing the right legal structure. The most common business structures for startups in Turkey are:
- Limited Liability Company (LLC)
- Ideal for small to medium-sized startups.
- Requires at least one shareholder and a minimum capital of TRY 50,000.
- Offers limited liability to shareholders, protecting personal assets.
- Joint Stock Company (JSC)
- Suitable for larger startups or those planning to go public.
- Requires at least five shareholders and a minimum capital of TRY 250,000.
- Shares can be traded publicly, offering easier access to capital.
- Sole Proprietorship
- Simplest form of business structure.
- Owned and managed by a single individual.
- Ideal for freelancers or small-scale entrepreneurs.
- Branch Office
- Suitable for foreign companies looking to establish a presence in Turkey.
- Operates as an extension of the parent company, with the same legal standing.
- Liaison Office
- It's typically ideal for market research, network for opportunities, promotion, and other non-revenue-generating activities for foreign investors & entrepreneurs.
Do you need more details? Click then: Company Registration in Turkey
Steps to Establish a Startup in Turkey
- Choose a Business Name
- The name must be unique and not already registered by another company in Turkey.
- It should also comply with Turkish commercial naming regulations.
- Prepare the Articles of Association
- Draft the company's articles of association, which outline the company's purpose, structure, and operating procedures.
- This document must be notarized and submitted during the registration process.
- Register with the Trade Registry
- Submit the necessary documents, including the articles of association, to the local trade registry office.
- The company will receive a registration number and be listed in the Turkish Trade Registry Gazette.
- Obtain a Tax Identification Number
- Register with the local tax office to obtain a tax identification number.
- It is necessary to be able to issue invoices, benefit from tax incentives, open a bank account and perform other financial transactions.
- Open a Corporate Bank Account
- Open a corporate bank account in Turkey, which is mandatory for all registered businesses.
- Deposit the required capital into this account if you selected JSC forming(Not mandatory for LLCs)
- You will also need it for some transactions such as VAT refund.
Click for details: How to Open a Corporate Bank Account in Turkey
- Register for Social Security
- Get registered your company with the Social Security Institution (SGK).
- This provides compliance with Turkey's labor laws and regulations and access to Soyal Securty Incentives in Turkey
- Obtain Necessary Permits and Licenses
- Depending on the nature of the business, additional permits and licenses may be required.
- Ensure all regulatory requirements are met before commencing operations.
Government Incentives for Startups in Turkey
Turkey offers various incentives to support startups, particularly in sectors like technology, innovation, and R&D. Some of the key incentives include:
- Tax Exemptions and Reductions: Startups in technoparks and certain other zones may benefit from corporate tax exemptions and reductions.
- R&D Grants and Subsidies: Government grants and subsidies are available for startups engaged in research and development activities.
- Employment Incentives: Companies hiring local employees may be eligible for social security and income tax reductions.
Find out more information about Technology Parks in Turkey
Setup Your Startup in Turkey with A&M Consulting Co. Experience
Setting up a startup in Turkey is an exciting opportunity for entrepreneurs looking to enter a dynamic market with access to Europe, Asia, and the Middle East.
By understanding the legal requirements, choosing the right business structure, and leveraging government incentives, startups can position themselves for success in this thriving economy.
Whether you're a local entrepreneur or a foreign investor, Turkey's startup ecosystem offers a fertile ground for innovation and growth.
Originally published Ağustos 27, 2024
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.