Establishment of Association in Turkey: Key Steps to Kick Off
Establishment of Association in Turkey offers a straightforward path to form a legal entity that aligns with collective purposes, social goals, or professional interests. This guide provides detailed insights into the steps, requirements, and legal considerations for founding an association in Turkey. Whether you're a foreign investor, a non-governmental organization (NGO), or a local group aiming to work within a legal framework, understanding the process of association establishment is crucial.
What is an Association in Turkey?
An association (dernek) in Turkey is a legal entity formed by at least seven individuals who come together for a common purpose, provided it is legal and non-profit. It functions similarly to non-governmental organizations (NGOs) in many other countries and can carry out a range of activities, from charitable work to cultural and educational programs.
Associations are governed under Law No. 5253 on Associations and Turkish Civil Code No. 4721, ensuring that they operate transparently and comply with national laws.
Key Benefits of Establishing an Association in Turkey
- Legal Status: An association provides legal status to a group of individuals working toward common goals, allowing them to engage in formal activities.
- Tax Exemptions: Non-profit associations may qualify for certain tax exemptions, especially those engaged in charitable activities.
- International Funding: An association can receive international funding, making it ideal for NGOs or organizations collaborating with foreign entities.
- Local Partnerships: Associations can collaborate with both governmental bodies and private institutions within Turkey.
Types of Associations in Turkey
In Turkey, associations can be categorized as:
- Ordinary Associations: These are associations formed for any lawful, non-profit purpose, such as educational, social, cultural, or professional activities.
- Public Benefit Associations: Associations that serve the public interest and are recognized by the government for public benefit status, which grants tax advantages and other benefits.
- Federations and Confederations: A federation is an umbrella organization formed by several associations with similar goals, while a confederation is formed by federations.
Steps to Establish an Association in Turkey
1. Draft the Articles of Association
The first step in establishing an association is drafting its articles of association (tüzük). This document defines the association's name, purpose, management structure, and operational rules. It must also comply with the Turkish Civil Code.
Key elements to include:
- Association's name and address
- Objective and activities
- Membership rules
- Management and decision-making structure
- Voting and meeting procedures
2. Founding Members
An association in Turkey must have at least seven founding members, who may be Turkish nationals or foreigners legally residing in Turkey. Each founding member must be committed to the association's purpose and sign the articles of association.
3. Establishing the Headquarters
The association must have a physical address in Turkey. The headquarters will serve as the official registered address for all communication and legal purposes.
4. Apply for Registration
After the articles of association are prepared and signed by all founding members, the next step is to submit an application for registration to the Governor's Office (İl Dernekler Müdürlüğü) in the province where the association's headquarters are located.
Documents required for the registration process include:
- Two copies of the articles of association
- Identity documents of founding members
- Declarations from each founding member
- Documents proving the headquarters address
- Receipt of payment for the registration fee
5. Receive Approval
Once the application is submitted, the authorities review it for compliance with the law. If all the documents are in order, the association is registered within 60 days, after which it becomes a legal entity.
6. Open a Bank Account
Once the association is officially registered, it can open a bank account in its name. This is essential for managing the financial activities of the association, including receiving donations and grants.
7. Start Operations
After registration and the opening of a bank account, the association can begin its activities. The association must adhere to the legal obligations regarding financial transparency and report its activities annually to the authorities.
Legal and Financial Obligations for Association in Turkey
1. Compliance with the Law
Associations are required to operate within the framework of Law No. 5253 on Associations. This includes holding regular general assembly meetings, maintaining accurate membership records, and ensuring transparency in financial matters.
2. Annual Reporting
Every association must submit an annual activity report to the Directorate of Associations. This report outlines the activities carried out during the year, including financial statements, memberships, and projects.
3. Taxation
Associations are generally exempt from taxes because they conduct non-commercial activities. However, if an association conducts commercial activities, the profits it makes may be subject to tax under Turkish tax laws. They may also have to pay withholding tax on properties rented for needs such as administrative offices. Associations must pay income withholding tax and social security premiums for their professional employees. Public benefit associations may benefit from additional tax exemptions.
4. Membership Rules
The association must establish clear rules for membership, including the application process, membership fees, and the rights and responsibilities of members. Membership must be open to all individuals who share the association's goals, without discrimination.
5. Audits and Inspections
The Turkish government reserves the right to audit associations, particularly regarding their financial transactions. Regular inspections ensure compliance with the law and help maintain public trust in the association.
Requirements for Foreigners Establishing an Association in Turkey
The Foreigners can establish an association in Turkey under certain conditions. According to Turkish law, foreigners who have legal residency in Turkey have the right to establish or become members of associations, just like Turkish citizens. However, there are a few important considerations:
- Legal Residency: Foreign individuals must have legal residency in Turkey to establish or participate in an association. Those without residency cannot be founding members.
- Compliance with Turkish Law: Foreigners must comply with Law No. 5253 on Associations and the Turkish Civil Code. This includes adhering to the general requirements, such as having at least seven founding members and preparing the necessary documentation.
- Permission for Foreign Organizations: If a foreign association or organization (e.g., an international NGO) wants to establish a branch or operate in Turkey, they must obtain special permission from the Ministry of Interior.
- Restrictions on Activities: Like domestic associations, foreign-founded associations in Turkey are required to carry out lawful, non-profit activities. Political or religious activities that conflict with Turkish laws or public order may face restrictions.
Areas of Activity and Sources of Income for Associations in Turkey
Associations in Turkey operate in diverse fields to fulfill social objectives. Their activities span various sectors, including education, healthcare, sports, and environmental protection. To sustain these activities, associations can draw from several income sources:
- Donations and Contributions: One of the primary sources of income for associations is donations made by individuals or organizations.
- Membership Fees: Associations often collect regular fees from their members, providing a steady stream of income.
- Funds and Grants: Associations can apply for financial support through national and international funds and grants.
- Events and Fundraisers: Hosting events such as bazaars, concerts, or charity functions can generate additional revenue for the association's activities.
Get in Touch With Us to Establish a Association in Turkey
Establishing an association in Turkey is a well-regulated process that offers numerous advantages for both local and foreign entities. By understanding the legal requirements, operational framework, and financial obligations, you can successfully form an association that operates effectively and contributes to society.
If you're considering establishing an association in Turkey, consulting with a local legal advisor can help ensure compliance with all legal provisions and smooth the registration process.
A&M Consulting Co. is a Consulting Company that specializes in
providing end-to-end association establishment and management
services, especially for foreign individuals and global
associations who want to establish an association in Turkey.
We continue to offer cost-effective solutions that will facilitate global associations and individuals who want to establish an association in Turkey smoothly and quickly, to fully comply with local legislation and to access tax exemptions.
FAQs About Associations in Turkey
Can foreigners establish an association in Turkey?
Yes, foreigners can establish an association in Turkey, provided they have legal residency and meet the same requirements as Turkish nationals.
What are the costs involved in establishing an association in Turkey?
The costs primarily involve registration fees, documentation expenses, and any costs associated with renting a headquarters for the association.
How long does the registration process take?
The registration process typically takes 15-30 days from the date of submission of all required documents.
What is the minimum number of founding members required to establish an association?
At least seven founding members are required to establish an association in Turkey. These members must be individuals who are eligible under Turkish law.
Can foreigners establish an association in Turkey?
Yes, foreigners with legal residency in Turkey can establish or become members of an association, as long as they comply with Turkish laws. Foreign associations looking to operate in Turkey need special approval from the Ministry of Interior.
What are the legal requirements to establish an association?
To establish an association, you must draft the articles of association, have at least seven founding members, designate a headquarters in Turkey, and apply for registration at the Governor's Office.
What are the types of associations in Turkey?
The main types of associations include:
- Ordinary associations (for social, cultural, and non-profit activities)
- Public benefit associations (recognized by the government for their contribution to the public interest)
- Federations and confederations (umbrella organizations formed by multiple associations)
What documents are required to register an association in Turkey?
Key documents include:
- Two copies of the articles of association
- Identity documents of the founding members
- Declarations signed by each founding member
- Proof of the headquarters address
- Registration fee payment receipt
Are associations subject to taxation in Turkey?
Associations are generally exempt from Corporate Income Taxes on non-commercial activities. However, if an association engages in commercial activities the profits from these activities may be subject to taxation. Additionally to be hired emloyee' and hired any property subjeft to Withholding Tax & Social Security Contrubution liabilities.
What are the annual reporting requirements for associations?
- Associations must submit an annual report to the Directorate of Associations, detailing their activities, financial statements, and any changes in membership or leadership.
What are the benefits of establishing a public benefit association?
Public benefit associations may receive special tax exemptions, can accept donations from local and international sources, and have additional privileges in terms of funding and partnerships with government bodies.
Can associations in Turkey receive international funding?
Yes, associations in Turkey can receive international funding, but they must report such funding to the authorities as part of their financial transparency requirements.
Can an association engage in commercial activities?
Yes, but only if the commercial activities are related to the association's main objectives. Any profits generated must be used to further the association's goals, and such activities may be subject to taxation.
What are the membership rules for associations?
Membership rules must be clearly outlined in the association's articles of association. Membership must be open to individuals who share the association's goals, without discrimination.
How are associations governed in Turkey?
Associations are typically governed by a general assembly (consisting of all members), a board of directors (responsible for management), and an audit board (responsible for financial oversight). The structure and decision-making processes are outlined in the articles of association.
What happens if an association violates Turkish law?
Associations that violate Turkish law or operate outside of their stated purpose can face sanctions, including fines, suspension, or dissolution by the authorities.
Can a foreign organization establish a branch in Turkey?
Yes, but they must obtain special permission from the Ministry of Interior. The foreign organization must comply with Turkish regulations governing foreign entities.
How often must general assembly meetings be held?
Associations are required to hold general assembly meetings at least once every three years, but this can vary depending on the association's bylaws.
Can associations in Turkey collaborate with government institutions?
Yes, associations can collaborate with government bodies and other public institutions, especially if they serve the public interest. Public benefit associations, in particular, often engage in such partnerships.
What is the role of the Directorate of Associations?
The Directorate of Associations is the government body responsible for overseeing and regulating associations. It ensures compliance with laws, reviews annual reports, and handles the registration and dissolution of associations.
Can associations be dissolved voluntarily?
Yes, an association can be dissolved voluntarily through a decision by its general assembly, as outlined in its articles of association. The dissolution process must follow legal procedures and be reported to the relevant authorities.
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.
