- within Criminal Law, Consumer Protection and Privacy topic(s)
1. Foreign Investment Regime
1.1 General Principles
According to the Foreign Direct Investments Law No. 4875 foreign investors are generally treated in the same way as domestic investors in Turkey. They are free to make investments in various ways including establishing companies (with 100% foreign capital ownership), acquiring shares, forming partnerships, or opening branches.
1.2 Restricted and Regulated Sectors
Foreign ownership is restricted in media service companies (with 50% cap) and in the maritime sector (with 49% cap). Furthermore, prior approval from the relevant regulatory authorities is required for investments in strategic industries such as insurance, banking, telecommunications, and energy.
2. Choosing the Appropriate Business Vehicle
2.1 Available Business Structures
The most common types of company in Türkiye are Joint Stock Companies (“JSCs”) and Limited Liability Companies (“LLCs”).
|
Criteria |
Joint Stock Company |
Limited Company |
|
Minimum Capital |
TRY 250,000 (at least 25% payable upon incorporation and remaining amount payable within 24 months following incorporation, and the nominal value per share must be TRY 1 or its multiples)
|
TRY 50,000 (Capital may be paid within 24 months after incorporation and the nominal value per share must be TL 25 or its multiples)
|
|
Number of Shareholders |
Minimum 1 |
Minimum 1 |
|
Management Body |
Board of Directors (must have at leats1 member) |
Board of Manager (must have at leats1 member and one shareholder must be a manager) |
|
Share Transfer |
More flexible (and can be confidential) |
More formal |
|
Public Debt Liability |
No such liability for JSC shareholders |
Additional liability for shareholders may arise for debts owed to government authorities |
|
Share transfers |
No requirement for approval by the general assembly meeting or notarized transfer document for share transfers |
Any transfer of shares in an LLC must be approved by the general assembly, and the transfer document must be notarized |
2.2 Why Foreign Investors Commonly Prefer Joint Stock Companies
JSCs are likely to be preferred by foreign investors due to the flexibility offered in terms of share transfer processes and the fact that shareholders are generally not liable for the public debts owed to the governmental authorities. Furthermore, companies engaged in certain activities such as banking, insurance, financial leasing, and media services, as well as publicly listed companies, are required to be established and operate in the form of joint-stock companies.
3. Company Incorporation in Türkiye
3.1 Incorporation Steps and Documentation Requirements
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|
Step |
Explanation |
|
1. |
Obtaining and legalising shareholder identity documentation
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Corporate shareholders: Certificate of incorporation (or business extract, apostilled and notarized), Powers of attorney (“PoA”) for incorporation (apostilled, notarised, translated into Turkish). Individual shareholders: Passport copies (apostilled and notarized) and address information. |
|
2. |
Obtaining tax numbers |
For shareholders, directors, and the company to be incorporated. |
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3. |
Opening temporary capital advance account at a bank
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Applicable only for JSCs as at least 25% of share capital must be paid upon incorporation in JSCs. |
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4. |
Draft office lease agreement
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To be submitted to the tax authority during the tax inspection. |
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5. |
Managerial documentation
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Duty acceptance letters and signature declarations for managers. |
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6. |
Central Registry Record System (“MERSİS”) registration process
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• Electronic submission of the Articles of Association Appointment of an authorised e-books representative (Authorisation form must be signed by all managers and submitted during MERSIS application) • Obtaining MERSİS registration number and tax ID number for the company. |
|
7. |
Trade registry registration |
• Physical filing with the relevant Trade Registry (can be done via proxy) • Payment of applicable fees (e.g. competition authority fee of 0.04% of share capital and publication costs etc.) • Chamber of Commerce registration and publication • Issuance of commercial books (As of 1 January 2026, Companies are required to keep their share ledger, general assembly meeting and resolution book, and accounting books (general ledger, journal book) in electronic form. • Companies can keep their inventory books, Board of Directors Resolution Book, and Managers' Resolution Book either in electronic or physical form. |
3.2 Post-Incorporation Procedures
Post-incorporation procedures comprise various administrative and legal steps that must be completed before the company becomes fully operational such as; tax office registration and tax inspection, social security registration, opening bank account for the company, issuance of signature circulars for the managers or directors etc.
3.3 Legalisation of the Foreign Documents
Foreign documents must either be apostilled pursuant to the 1961 Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (Apostille Convention) or be certified by Turkish consulates. Therefore, the overall timeline for the incorporation should be planned carefully, taking these procedures into consideration.
4. Accounting, Reporting and Audit Requirements
Boards of JSCs and LLCs are obliged to prepare; (i) annual financial statements, and (ii) annual reports for each financial year, in compliance with certain standards within three months from the end of their accounting period. Additionally, publicly traded companies or companies operating in regulated sectors such as banking and insurance are subject to further reporting requirements.
According to the Presidential Decree No 11066, companies exceeding any of the following thresholds for two consecutive accounting periods are subject to external independent auditing: (i) Total assets of the company are at least TRY 500 million; (ii) Net annual sales revenue of the company is at least TRY 1 billion; and/or (iii) The company has 150 or more than 150 employees.
5. Tax Compliance
Under Turkish tax legislation, companies must also submit tax declarations for various taxes, such as VAT, corporate income tax, withholding tax and other applicable taxes, within the timeframes stipulated by the relevant legislation. Failure to comply with tax obligations may result in tax penalties and interest charges on the tax amount, that is why maintaining an effective tax compliance procedure is pivotal in terms of mitigation potential legal and financial risks.
6. Conclusion
Türkiye offers a liberal foreign investment regime and open environment, allowing foreign investors to establish wholly owned companies with minimal restrictions. In this context, JSCs remain the preferred medium for most international investors due to their flexibility in ownership and governance structure and limited shareholder liability. Proper planning of the incorporation process and post-establishment compliance procedures are essential for a successful market entry strategy.
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.
