How to open a company in Turkey for a foreigner

Opening your own company in Turkiye is a useful way for a foreign investor to do business in the Turkish market.

The number of foreign entrepreneurs in Turkiye has been constantly growing in recent years. The main reasons for this trend — This is a simplification of the procedure for registering a company in the country. Now there is no requirement for the participation of a Turkish citizen in the management of an enterprise. The authorized fund can be fully formed by foreign capital.

The country's government creates favorable conditions for the development of companies. There are a number of benefits that entrepreneurs receive by starting their business in this country. The most important ones are:

• Easy and fast registration. The sphere of public services allows you to obtain the necessary licenses, permits, certificates without any problems and in the shortest possible time.
• Convenient taxation. Foreigners, opening their company in the country, receive subsidies and benefits along with Turkish entrepreneurs, and also have equal rights with them.
• Low financial risk threshold. The banking and economic sectors of Turkiye are developed at a high level, which encourages investors to invest in them.
• Opportunity to expand your business by entering international markets. The presence of special free investment zones with preferential taxation and energy supply costs increase the export-oriented investment flow.

Basic forms of doing business in Turkiye

Two organizational and legal forms of entrepreneurial activity are the most popular in the country:

• Limited Liability Company (LS);
• Joint stock company (AS).

Foreigners most often prefer registering an LLC due to minimal bureaucratic delays and favorable conditions for successful business development.

LLC registration in Turkiye

Turkiye Limited Liability Company — this is a legal entity in which the authorized capital is divided into shares, and all financial liability of its participants is limited to the amounts contributed to this company.

Shareholders are personally responsible for paying taxes and public debts in proportion to their shares in the capital.

The minimum composition of the — one shareholder and one director with no residency requirements. The maximum number of shareholders with whom LLC — 50. All shareholders can be foreigners.

A foreigner who has a work permit in Turkiye can be appointed as a director. He can be dismissed at any time by decision of the general meeting.

Decisions of shareholders are made at general meetings. The general meeting may be subdivided into ordinary or extraordinary meetings. Scheduled meetings must be held at least once a year within three months after the end of the financial year.

The following decisions are made at general meetings:

• Changes are made to the bylaws
• directors are appointed and dismissed
• financial statements are approved,
• profit is distributed.

Directors or owners of at least 10% of the capital may convene extraordinary meetings at which urgent tasks are resolved.

Special requirements for registering an LLC in Turkiye

Foreign entrepreneurs who decide to open an LLC in Turkiye should take into account that the company cannot engage in insurance or banking business.

The name of the company should indicate the specifics of the business direction with the prefix "Limited Şirketi"; at the end. In addition, it should not match the existing names of companies already registered in Turkiye. The presence of words of foreign origin in the name of an enterprise may be permitted only in cases where it does not contradict the law. After choosing a name, you must go through a special check in the registration authorities.

Cash contributions to the authorized capital must be made to a special bank account opened in the name of the company being created. A bank letter confirming that the subscribed share capital has been deposited into the account is submitted to the appropriate department of the trade register. Before the registration procedure, you must deposit an amount of at least 10,000 Turkish lira, 25% of it (2,500 lira) will be blocked on the company's account for several days.

It is mandatory to register the office of the company. To do this, you will either need to purchase the premises in the property, or conclude a lease agreement. You can also enter your Turkish home address where you live.

The next step is to register the LLC with the relevant tax and social security authorities.

After the completion of the LLC registration process, the information about the company appears in the Turkish Gazette of the Commercial Register of the Chamber of Commerce and Industry.

The process of registering a Turkish Limited Liability Company (LLC) usually takes from 1 to 10 working days and for this it is not necessary for the entrepreneur to stay in Turkiye: the whole procedure can be carried out by proxy to a third party.

The cost of paperwork, payment of state fees and services of notaries and translators will cost around $ 1,000.

The procedure for establishing a limited liability company in Turkiye

Steps of the LLC registration procedure in Turkiye:

• Determination of directions for the development of the enterprise.
• Choosing and approving the name of the organization.
• Collecting information about the founders, beneficial owners and managers of the enterprise.
• Registration of the legal address of the organization.
• Obtaining the company's tax number in the corresponding service.
• Opening a bank account of the company with the placement of authorized capital on it.
• Drafting and notarization of constituent documents (company charter).
• Collecting a package of documents for submission to the state registrar.
• Obtaining licenses and special permits (if any are necessary for conducting certain types of business activities).

Required documents for registering an LLC in Turkiye

According to article 586 of the new Turkish Commercial Code, the following documents are required to register an LLC in the Commercial Registry Department:

• For individuals: passport, Turkish TIN, proof of residence.
• For legal entities: application for registration, a notarized copy of the declaration of the founders, determination of the percentage of each partner's share in the company, registration form of the Chamber of Commerce and Industry, documents and photos of the founders of the company, address of the company's office in Turkiye, notarized articles of association (4 copies and 1 original).
• Documents must be properly formatted and translated. The translation is certified by a notary first in the country of issue and then by a notary in Turkiye.