Company Formation in Turkiye

What Are the Advantages of Company Formation in Turkey?

Turkey offers and continues to develop significant business advantages for foreign founders, making company registration in Turkey an attractive option.

Below are the main advantages of doing business in Turkey:

1. Promising Labor Market
   As of the end of 2024, Turkey’s population is approximately 85.6 million people, with a large share represented by the younger generation. This means foreign companies have broad opportunities to recruit highly qualified professionals for their business operations.
2. Protection of Foreign Investors
   According to a recent international study, Turkey ranked 20th globally in terms of creating a protective environment for foreign investors.
3. Affordable Services
   Turkey remains a relatively affordable country. The rental cost for an office space or apartment in Turkey is about one-sixth of that in, for example, London.
4. Residence Permit Eligibility After Company Registration
   Turkey allows company founders to apply for a residence permit after registering a business.

Other benefits of company formation in Turkey include:

• Strategic trade location between Asia and Europe;
• Stable economy and well-developed banking system;
• Government subsidies and incentives in free trade zones;
• High domestic market demand;
• Regulatory alignment with the European Union.

What Are the Legal Forms of Companies in Turkey?

According to the Turkish Commercial Code, there are five main forms of business entities:

• Joint-stock companies (A.Ş.);
• Limited liability companies (Ltd. Şti.);
• General partnerships;
• Cooperative partnerships;
• Limited partnerships.

Joint-stock and limited liability companies are the most common structures both globally and in Turkey. It is also important to note that foreign businesses may establish subsidiaries or branch offices.

Joint Stock Company (JSC)

A JSC can be either private or public and must include at least one shareholder. The minimum share capital for a private joint stock company is TRY 250,000, while for a public one it is TRY 500,000.

A JSC is governed by a board of directors, which must consist of at least one member.

Limited Liability Company

A Turkish Limited Liability Company (LLC) is established with at least one shareholder. The minimum share capital is TRY 50,000.

General Partnership

A general partnership can be established without a minimum share capital. All partners in a general partnership must be natural persons. The partners’ liability is limited to their contribution to the capital. Management duties may be assigned to one, several, or all partners under the company’s agreement.

Cooperatives

Cooperatives are commercial partnerships whose purpose is to protect the specific economic interests of their members, particularly those related to their professional activities.

Limited Partnership

A limited partnership is a commercial entity formed by limited partners (whose liability is restricted to their capital contribution) and general partners (with unlimited liability). No minimum share capital is required for this business type.

Company Formation in Turkey: the Procedure

The company registration process in Turkey consists of several steps. In short, a company must apply to the Trade Registry, and the process is finalized at the local office of the Chamber of Commerce, which manages company formation and registration.

Steps for company registration in Turkey:

1. Choosing a company name that meets the requirements of the Turkish Trade Registry and Chamber of Commerce.
2. Providing a registered office address in Turkey as part of the registration requirements.
3. Translating company documents into Turkish.
4. Obtaining a business identification number for the company.
5. Obtaining a company tax number from the local tax office.
6. Opening a corporate bank account in Turkey.
7. Registering the company with the Trade Registry.
8. Having corporate books notarized.
9. Publishing a “Company Registration” resolution.

Corporate Taxation in Turkey

There are several mandatory taxes for businesses in Turkey:

• Corporate income tax — 25%.

A reduced rate (by two percentage points) may apply to certain companies, such as newly listed firms on the Istanbul Stock Exchange during their first five years.

• VAT — from 1% to 20% (depending on the category of goods);
• Personal income tax — starting at 15%, then 20%, 27%, 35%, and up to approximately 40%;
• Stamp duty — around 0.759% of the gross amount;
• Employer contribution — 37.5% (if the company has employees).

The employer contribution is a social security payment that includes several risk components. It consists of 22.5% paid by the employer and 15% by the employee. However, foreign companies that pay social security contributions in their home country are exempt from this payment in Turkey.

It is worth noting that Turkey’s tax policy is one of the most favorable in Europe, partly because there are no currency control restrictions.

Filing and Preparing Financial Reports in Turkey

Under national legislation, companies registered in Turkey are required to submit annual financial statements.

Financial statements provide comprehensive information on a company’s financial performance and solvency. Depending on the company’s size, these reports may consist of several hundred pages.

Financial and balance sheet reports are published through the official Turkish Commercial Register. Access to this information requires the company’s full Turkish name and registration number.

According to the New Turkish Commercial Code, the full annual financial report includes:

• Balance sheet;
• Profit and loss statement;
• Statement of assets;
• Statement of fixed assets;
• Statement of trade receivables.

Conclusion

With its dynamic market economy and strong performance over the past decade, Turkey offers vast opportunities for businesses across various sectors. Registering a company in Turkey also provides the possibility for its founders to obtain a residence permit.

In recent years, Turkey has achieved a more favorable investment climate thanks to effective economic and social policies that stimulate growth in monetary and fiscal policy, the New Turkish Commercial Code, and a strong financial industry.

If you are interested in this jurisdiction, contact GFLO Consultancy experts for a free consultation on doing business in Turkey.

What You Gain from Working with Us

• a clear understanding of the main aspects of doing business in Turkey (which documents are required, what taxes apply, and what jurisdiction-specific details to consider);
• full support from our specialists throughout the company registration process;
• expert assistance in a convenient format whenever questions arise;
• a fully registered company under the most comfortable conditions — we handle the entire process for you;
• an opened bank or payment system account.