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Company Formation In Turkey

In this article, Gurcan Partner’s Founding Partner Att. Bedrettin Gürcan and Serhat İlhanlı will mention Company Formation in Turkey with all the details.

Turkey is a dedicated growing country located in between Europe and Asia, functions like a bridge connecting two continents. Besides its strategical geography, Turkey provides an excellent workforce for both blue-collar and white-collar employees with its over 83 million population.

Among the 83 million, 53.8% of the population provides the labor force. Turkey has received over 190 Billion USD of direct investment in the last two decades from all around the world mostly from Western European countries, The United Kingdom, The United States, Gulf Countries. The growth rate of foreign direct investment increases steadily. The most chosen sectors for foreign direct investments are finance (35%), production (24%) and energy (12%). Also note that, Turkey’s average GDP growth rate is around 6,33% in last 9 years that means Turkey has surpassed the European Union’s average GDP growth rate by 5% each year.

Available Types For Company Formation In Turkey

Company formation procedures for foreigners in Turkey is set as same as Turkish citizens. It means foreigners who are willing to establish a company in Turkey, will also have to follow the procedures in Turkish Commercial Code which is re-designed in 2011 according to European Union integration policies.

Under TCC (Turkish Commercial Code), companies are categorized into two which are corporate forms and non-corporate forms.

Corporate Forms In Turkey Are:

1. Joint Stock Company,
2. Limited Liability Company and
3. Cooperative Company.

Whereas non-corporate forms are Collective Company and Commandite Company which are barely preferred. In today’s Turkey, Joint Stock Company and Limited Liability Company constitute the majority of established companies. Although there are 3 types under corporate forms, company formation procedures for 3 of them are almost the same except for financial and organs requirements.

Procedures For Company Formation In Turkey

As stated above, Turkey has simplified its company formation procedures as implementation of European Union integration policy. Required steps are down below;

Application On Mersis

Applications are done on an online system called MERSIS which is a central information system for the commercial registry process. The process only consists of a single step which is submitting official report and association agreement on MERSIS.

Execute And Notarize Company Documents

Articles of incorporation signed by all founders before authorized personnel. Beside it, required documents differs in case of founders are a real person shareholder or a legal entity. All the required documents for company formation obtained outside of Turkey shall have ratification or apostille and shall be translated in Turkish by Turkish Notary.

Acquiring Tax Identity Number In Turkey

Tax Identity Number functions as ID number of legal entities. Also It is required for necessary actions that the company may take in future such as opening a bank account which is also a step in company formation procedure.

Depositing Company’s Capital To Competition Authority

According to TCC, 0.04% of the Companies Capital must be deposited via Trade Registry Office.

Depositing Start-Up Capital

25 percent of the subscribed capital of the company must be paid before company’s registration. However, the remaining 75 percent can be paid within two years after establishment.

Application To Trade Registry Office

Applications are accepted via a petition by Trade Registry Office. Documents obtained previous steps should be in the petition such as; bank certificate of 25 percent of subscribed capital and payment to Competition Authority, Articles of incorporation, tax registration certificate.

 Certification Of The Legal Books By Trade Registry Office Authorized Personnel

Issuance Of Signature Circular and Notification Of Trade Registry Office To Tax Office And Social Security Institution

Taxes That Companies Face In Turkey

Turkish Corporate Tax Legislations provide harmonized provisions with international standards. Income tax that legal entities are obliged to fulfill is corporate tax which is lowered in 2020 to 20% of business profit.

On the other hand, there are multiple different taxes on expenditures such as Special Consumption Tax, Stamp Duty, and Value Added Tax (VAT) which differs from 1% to 18% and is an indirect tax at the same time. There is also wealth tax such as property taxes and motor vehicle taxes.

For more details please read our article on Taxation in Turkey.

Does Investing In Turkey Grand You Citizenship?

The short answer is “YES” if you meet the requirement. Fulfilling any of article down below can grant you citizenship;

• Made a minimum fixed capital investment of USD 500,000
• Acquired a property worth a minimum of USD 250,000 
• Created jobs for at least 50 people
• Deposited at least USD 500,000 or equivalent foreign currency in banks operating in Turkey with the condition not to withdraw the same for at least three years
• Bought at least USD 500,000 worth of government bonds with the condition that they cannot be sold for at least three years
•  Bought at least USD 500,000 worth of real estate investment fund share or venture capital investment fund share with the condition that they cannot be sold for at least three years