BUSINESS SETUP

The Complete Guide to Establishing a Company in Turkey

Starting a business in Turkey can be an attractive option for entrepreneurs and investors looking to tap into Turkey's strong economy and strategic location at the crossroads of Europe and Asia. However, registering a company in Turkey can be complex and time-consuming, involving a range of legal and administrative requirements.

This guide will provide a  step-by-step overview of opening a company in Turkey , including the different types of legal structures, the documents required, and the procedures involved.

Choosing The Right Legal Structure For Your Business

Before registering a company in Turkey , choosing the right legal structure is important. Turkey's most common business structures are:

• Limited Liability Company (LLC),
• Joint-Stock Company (JSC),
• Branch & Representation Office of Foreign Companies.

Each business structure has its advantages and disadvantages. The structure you choose will depend on the size and nature of your business, as well as your personal goals and objectives. Getting professional advice is crucial to help you make the right choice. Let's get to know them a little bit better.

· Limited Liability Company (LLC)

An LLC is one of the popular choices for businesses in Turkey, as it offers the benefits of limited liability for the owners while allowing multiple owners. In an LLC, the owners are known as shareholders, and their liability (excluding public debts) is limited to the amount of capital they have invested in the company. An LLC must have at least one (1) shareholder and can have a maximum of 100,000 TL capital amount.

· Joint-Stock Company (JSC) AS

A JSC is a more corporate legal structure for a business in Turkey. It is suitable for larger and more corporate businesses. a JSC, ownership is divided into shares, and the liability of the shareholders (excluding public debts) is limited to the amount of capital they have invested in the company.

· Branch & Representation Office of Foreign Companies

Establishing a branch or liaison office by foreign investors in Turkey is welcome. Local and foreign investors are equally treated pursuant to the Foreign Direct Investments Law No. 4875 (the " FDIL ") except as otherwise stipulated in international conventions and special laws. FDIL also allows foreign investors to establish a liaison office in Turkey to conduct research activities in their industry without engaging in any commercial activity.

A foreign company can invest in its commercial activities by opening a Turkish branch instead of establishing a new company in Turkey. In fact, it is often easier and cost-free. The minimum capital requirement required for establishing Joint-Stock and Limited Liability Companies is not stipulated for branches. By establishing a branch in Turkey, the investor can start their business activities in Turkey.

In Turkey, liaison offices cannot conduct commercial activities. In other words, the liaison offices of foreign companies are not entitled to sign commercial agreements or issue invoices. This prohibition is the first condition for  establishing a liaison office in Turkey . If a liaison office enters commercial transactions, its operation permit will be canceled.

The parent company (ie, a foreign company) should perform such activities directly when required. However, a liaison office may lease an office and open a bank account in Turkey to pay its expenses. The parent company will cover the expenses of the liaison office.

· The Company's Capital Funds

The primary aspect of the firm's capital is to act according to Turkish Legislation. The minimum capital required to establish a company in Turkey is ₺100.000 for an LLC and ₺500.000 for an AS

Because Turkish Legislation deals with companies based on their capital value, this quantity of funds will not provide you with any independence. As a result, if your company's capital is set at least ₺100.000, you will be able to:

• Obtain a work permit in Turkey
• Have the opportunity to join businesses such as TURSAB, and others,
• Being able to do business or export and import.

The investment does not have to be put in the bank during the company establishment procedure; Rather, it must be deposited before filing for a work permit or within 24 months of the foundation date.

Required Documents For Registering a Company in Turkey

Once you have chosen the right legal structure for your business, you will need to gather the necessary documents and information to register your company in Turkey. Based on the nature of the shareholder, such as a real person or legal entity, this may include the following:

1-If the partners are individual

• Passport Copy for partners and directors
• Turkish Tax Number for shareholders and directors (we provide)
• 2 passport size photos for partners and directors

2. If the shareholders are foreign companies (branch).

• Turkish Tax Number for the foreign company (we provide)
• Turkish Tax Number for directors (we provide)
• The Certificate of Activity (certificate of good standing) of the company prepared by the relevant authority in the investor's home country. This certificate should contain information about the current active status of the company and its signature executives *
• Company Resolution (the draft will be provided by us) *
• Power of Attorney for the establishment process by the shareholders (the draft will be provided by us) *
• Signature Statement of the directors to be submitted to Trade Registry (the draft will be provided by us) *

*The abovementioned documents should be notarized