The investors who are interested in Turkish market may find our Q&A for company formation in Turkey helpful.
- Can a foreigner investor incorporate a company without partnering with any Turkish (local) person in Turkey?
Any natural or legal foreign person may incorporate a company in Turkey without a need of having any Turkish (local) shareholder or director. Turkish Commercial Code Nr. 6102 which has been introduced back in 2011 allows company formation in Turkey with at least one shareholder. Such shareholder(s) can be foreign natural or legal person.
- What type of companies can foreigner investors incorporate in Turkey?
Foreigner investors can incorporate either a Limited Liability Company or Joint Stock Company.
In a nutshell;
Limited Liability Company:
A Turkish Limited Liability Company can be incorporated with minimum one shareholder (natural or legal person) and the shareholders are only responsible from public debts and tax claims with their personal assets. Apart from that, their liability is limited to their share ratio of the capital of the company and no private party can bring an enforcement action against personal assets of Shareholders. Please note that a minimum capital of 10,000 TL is required to establish a Limited Liability Company in Turkey. 1/4th of the minimum capital of 10,000 TL (2.500TL) should be paid before the registration while the remaining 3/4th should be paid within 2 years.
Joint Stock Company:
A Turkish Joint Stock Company can be incorporated with minimum one shareholder (real or natural person) and the c shareholders are not responsible from public debts and tax claims with their personal assets as it happens in limited liability company. Their responsibility is only limited to their share ratio of the capital of the company and no private party can bring an enforcement action for the personal assets of Shareholders. Please note that a minimum capital of 50,000 TL is needed to establish a Joint Stock Company in Turkey. 1/4 of the minimum capital of 50,000 TL (12.500TL) should be paid before the registration while the remaining 3/4 should be paid within 2 years.
- Who can be the director(s) of a company? Are there any requirements in respect to citizenship? Can a (foreigner) company be a director?
Any natural (real) Turkish or foreign person can be a director of a Turkish company. Legal person(s) including foreign companies can also be directors of Turkish companies provided that the 'director company' appoint a real person as its representative. This representative can be foreign citizen as well. Therefore, there is no restriction in relation to the citizenship of the director.
- What documents should be provided in order to start a business in Turkey?
As CA Law Firm, we can get your Power of Attorney (PoA) in order to be able to register a Turkish company without a need of yourself to be present in Turkey. The PoA must be notarized and legalized in the home country. This PoA can also be certified at the Turkish Consulate in your home country. If the shareholder will be yourself as real person, we will be able to incorporate a company with a valid passport and Power of Attorney only. If the shareholder will be a legal person, we will require some further documents such as registration certificate, certificate of good standing and a Board Decision appointing a signatory in Turkey.
The documents that needs to be submit before the relevant Trade Registry where the company will be incorporated are:
- 4 copies of Establishment Declaration Form
- 4 copies of notarized articles of incorporation prepared in MERSIS.
- Signature declarations of the authorized persons under the company name before Notary.
- Founders' declaration (must be signed by the founders),
- Bank receipt indicating the minimum amount of the share capital according Turkish Commercial Code is paid
- Original bank receipt (receipt from Halk Bankası indicating that the 4/10,000 of the capital is deposited to Turkish Competition Authority)
- How long will company formation in Turkey take?
Company formation in Turkey can be completed within 4-5 days after the required documents are ready.
- Should an accountant, lawyer or other advisor be consulted during the process of company formation in Turkey?
It is not compulsory, but it is definitely advisable to consult a lawyer as there are many technical issues arising during the company formation in Turkey. It is important to have competent Articles of Association, correct Signatory Declaration, authorisation in the Banks etc. Accountants must be hired after the completion of company formation in Turkey.
- Do annual accounts have to be filed with Tax Office?
According to the Turkish regulations issued by the Ministry of Customs and trade on 28.08.2012, Board of limited companies are obliged to prepare the annual account reports within 2 months from the end of the accounting period to be submitted to Tax Office.
- What is the current corporate tax liability of Limited Liability Company and Joint Stock Company?
Currently the corporate tax is 22% in Turkey.
- Are there incentives for the Turkish companies incorporated by foreign investors?
Yes, there are many incentives schemes provided to Turkish companies in different areas of activity and in different regions of Turkey.
- What type of residence permit will I get after incorporating a company?
Turkey residence permit and work permit are regulated through different regimes. If a foreigner wants, s/he can just get residence permit in Turkey without incorporating a company. It will be valid for 1 year and can be renewed every year. However, in order to get a work permit, the company must satisfy several conditions. If you will be the only shareholder as natural (real) person, you have to get a work permit. However, there are some conditions that your company must satisfy.
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.