Türkiye continues to be an attractive country for foreign investors due to its strategic location, growing economy, and broad market opportunities. Entrepreneurs considering investing in Türkiye may find it useful to understand some key aspects of the company formation process. This article provides information on the most frequently asked questions and important points regarding company formation in Türkiye.
1.Types of Companies in Türkiye
The most commonly preferred types of companies in Türkiye are:
- Limited Liability Company (Ltd. Şti.): This is the most preferred type of company. It can be established with at least one partner, and the liability of the partners is limited to their capital contribution.
- Joint Stock Company (A.Ş.): This type is preferred for large investments. It has a structure divided into capital shares and offers the possibility of going public.
2. Company Formation Process
The process of establishing a company in Türkiye generally involves the following steps:
- Chamber of Commerce Registration: Required documents must be prepared and submitted to a local chamber of commerce in Türkiye. These documents include the company agreement, identification documents of the founders, and a capital statement.
- Tax Number Acquisition: A tax number must be obtained for the company to start its operations. This number is used for tax declarations and other financial obligations.
- Central Registration (MERSİS) Registration: Company formations in Türkiye are carried out through the Central Registration System (MERSİS). This system allows for the online registration of all commercial transactions.
- Capital Investment: A specific capital investment is required for limited and joint stock companies. This capital is deposited in a bank, and the bank receipt is submitted to the chamber of commerce.
- For Limited Companies, the minimum capital amount is 50,000 Turkish Lira.
- For Joint Stock Companies, the minimum capital amount is 250,000 Turkish Lira.
- Notary Approval: The company agreement and other formation documents must be notarized.
- Company Registration: After completing the documents, the company is registered in the trade registry and announced in the Turkish Trade Registry Gazette.
3. Taxation and Incentives
The main taxes that companies in Türkiye are subject to include income tax, corporate tax, value-added tax (VAT), and stamp duty. Additionally, Türkiye offers various incentive programs for foreign investors. These incentives include tax reductions, customs duty exemptions, and support varying by investment regions.
4. Foreign Partner Companies
It is possible to establish a company with foreign partners in Türkiye. Foreign investors have the same rights as Turkish citizens and can establish companies through the same processes. Türkiye provides significant protections for investors, including property rights, profit transfer, and investment contract guarantees.
5. Legal and Consultancy Services
For foreign entrepreneurs looking to establish a company in Türkiye, utilizing local legal and financial consultancy services can help expedite the process and minimize potential risks. These services provide guidance throughout the company formation process and facilitate compliance with local regulations.
6. Work and Residence Permits
Foreign entrepreneurs establishing a company in Türkiye need to obtain work and residence permits to operate legally. These permits are necessary for residing and conducting business in Türkiye.
Foreign partners and managers of Limited or Joint Stock Companies established in Türkiye who are residents abroad are not required to obtain work or residence permits in Türkiye.
Conclusion
Forming a company in Türkiye can be a strategic move for foreign investors. Understanding the processes and requirements mentioned above is key to succeeding in Türkiye’s business environment. Taking the right steps and seeking support from local experts are effective ways to lay a strong business foundation in Türkiye.
