Company Setup In Turkey

Company Setup in Turkey: Legal Steps, Types & Requirements - 2025

Turkey, strategically located between Europe and Asia, offers a dynamic and growing market with a favorable business environment for both local and foreign investors. The Turkish government has simplified company formation procedures and encourages foreign investment through various incentives. This guide outlines the key aspects of how company setting up in Turkey, including legal structures, steps, requirements, and compliance matters.

Why Choose Turkey for Business?

Turkey is a rapidly growing economy with a unique geopolitical position, making it an attractive destination for business and investment. Whether you're a startup, SME, or multinational corporation, Turkey offers numerous advantages that make it a competitive choice for entrepreneurs and investors.

1. Strategic Geographic Location

Turkey serves as a bridge between Europe, Asia, and the Middle East, offering:

• Access to 1.5 billion consumers across Europe, MENA, and Central Asia.
• Major trade routes (Istanbul Strait, land corridors for logistics).
• Free Trade Agreements (FTAs) with 38+ countries, including the EU Customs Union.

2. Strong and Growing Economy

• GDP: Over $1.1 trillion (2024, PPP-adjusted).
• Fast-growing sectors: Manufacturing, technology, tourism, finance, and energy.
• Stable economic policies and government incentives for investors.

3. Business-Friendly Environment

• Ease of Doing Business: Simplified company registration (can be done in 3 days).
• Low setup costs (e.g., LLC requires only ~$1,300 in capital).
• Foreign ownership allowed in most sectors (100% foreign-owned companies permitted).

4. Large and Skilled Workforce

• Population of 85+ million (young and dynamic workforce).
• Highly educated talent pool (engineering, IT, finance, multilingual professionals).
• Competitive labor costs compared to Europe.

5. Government Incentives & Tax Benefits

• Corporate tax rate: 25% (lower in Free Trade Zones, TechnoParks & R&D sectors).
• VAT exemptions for exporters & some sectors.
• Investment incentives (tax breaks, social security support, customs duty exemptions).
• Grants for R&D and technology investments.

6. Advanced Infrastructure & Logistics

• Modern transportation (Istanbul Airport, high-speed rail, extensive highways).
• Thriving industrial zones & tech parks.
• Well-developed banking & fintech sector.

7. Booming Consumer Market

• Rising middle class with increasing purchasing power.
• High demand for imported goods (electronics, automotive, luxury brands).
• E-commerce growth (over $35 billion market in 2024).

8. Tourism & Real Estate Opportunities

• 50+ million tourists annually (hospitality, retail, and F&B opportunities).
• Citizenship by investment (real estate purchases over $400,000 qualify).
• Citizenship by Setup a company (hire 50 emloyee')
• Citizenship by investment on a deposite account or invest to state bonds (amount of $500K)

9. Gateway to Global Markets

• EU Customs Union (duty-free access to Europe).
• Trade deals with Middle East, Africa, and Asia.
• Ideal for export-oriented manufacturing.

10. Quality of Life & Expat-Friendly

• Affordable living costs (compared to Western Europe/US).
• Vibrant cities (Istanbul, Ankara, Izmir) with international schools, healthcare, and expat communities.
• Rich culture, history, and business networking opportunities.

Types of Companies in Turkey

Turkey offers several business structures, each with different legal and financial implications:

A. Limited Liability Company (LLC – Limited Şirket)

• Minimum Capital Requirement: 50,000 TRY (approx. $1,300).
• Shareholders: 1 to 50 (individuals or legal entities).
• Liability: Limited to the company's assets.
• Management: Managed by one or more directors (local or foreign).Minimum one of partners shall be director.
• Suitable for: Small to medium-sized businesses.

B. Joint Stock Company (JSC – Anonim Şirket)

• Minimum Capital Requirement: 250,000 TRY (approx. $6,500 ).
• Shareholders: Minimum of 1 (no upper limit).
• Liability: Limited to the company's assets for shareholders(Unlimited liability for board members)
• Management: Board of directors (at least one resident director required for publicly traded companies).
• Suitable for: Large businesses, publicly traded companies.

C. Branch Office

• Legal Status: Establishes as an extension of a foreign company or as a separate legal entity.
• Liability: Parent company is fully liable.
• Registration: Must be registered with the Turkish Trade Registry.
• Suitable for: Foreign companies expanding operations in Turkey.

D. Liaison Office / Representative Office

• Purpose: Market research and promotion (cannot engage in commercial activities).
• Duration: Limited to a few years (renewable).
• Suitable for: Foreign companies exploring the Turkish market.

E. Sole Proprietorship

• Ownership: Single individual.
• Liability: Unlimited personal liability.
• Registration: Simple but offers no legal separation between owner and business.
• Suitable for: Freelancers and small-scale businesses.

Steps to Set Up a Company in Turkey

Step 1: Choose the Type of Entity

Select the appropriate company structure based on business scope and capital requirements.

Step 2: Prepare Articles of Association 

The Articles of Association (AoA) must comply with Turkish Commercial Code

Step 3: Obtain a Tax Identification Number

All shareholders (foreign individuals or entities) and the company to be established must obtain a tax identification number from the local tax office and the company.

Step 4: Deposit Capital

• At least 25% of the capital must be deposited in a bank account before registration.(For JSC)
• The rest must be paid within 24 months.

Step 5: Register with the Trade Registry Office

Submit documents to the local Trade Registry. Once approved:

• The company is officially formed.
• It receives a registration number.

Step 6: Register with Tax Office and Social Security

• Apply for tax registration and get a company tax number.
• Register employees with the Social Security Institution (SGK).

Step 7: Open a Corporate Bank Account

Required for capital deposit and financial operations.

Step 8: Obtain Required Licenses and Permits

Depending on the business field, specific licenses may be required (e.g., tourism, health, construction).

Documents Required & Foreign Ownership

• Articles of Association (AoA)
• Founders' declaration
• Notarized signatures of company managers
• Lease agreement or proof of business address
• Bank receipt of capital deposit for JSCs
• Passport copies and tax IDs of shareholders
• Foreign investors can own 100% of a Turkish company.
• Work Permit is mandatory for foreign directors
• No special approval required for most sectors.
• Certain sectors like energy, aviation, or media may have restrictions or require additional permits.

Taxation for Companies in Turkey

Post-Registration Requirements

• E-Ledger: Mandatory for LLC & JSCs.
• E-Invoicing: Mandatory for almost all businesses.
• Work Permits: Foreign employees need a work permit.
• Annual General Meeting (AGM):  JSCs must hold an AGM within three months of the fiscal year-end.
• Hire a CPA or Turkish Accountant: Hire a licensed Certified Public Accountant or an Accountant for your company's accounting and taxation. It is mandatory for the legal stability of your company.
• Get a Signature Circular: It is a notarized document that identifies a company's official representatives and confirms their authority to act on its behalf in legal and official matters. Get a Seal:  It is used to verify and standardize official documents, confirm company identity on items like invoices and receipts, formalize contracts, and support official transactions with signatures. Apply for E-Notification: It has been made mandatory to apply for e-notification from the relevant institutions for the legal notifications to be made to your company by the tax office and the Social Security Institution. Apply for License & Permit: Depending on your field of activity, it is mandatory to obtain a standard business license from your local municipality.