How to set up a business in Turkey

Learn the essential steps to set up a business in Turkey, including legal requirements, registration process, and key considerations for success.

How to set up a business in Turkey

Setting up a business in Turkey offers numerous strategic advantages. Situated at the crossroads of Europe and Asia, Turkey enjoys a pivotal geographical position that facilitates trade and access to diverse markets. Its rapidly growing economy, supported by a young and increasingly educated workforce, presents ample opportunities for business growth and innovation. The Turkish government actively encourages foreign investment through incentives such as tax breaks, subsidies, and streamlined procedures, making it attractive for entrepreneurs seeking a welcoming business environment. Moreover, Turkey's modern infrastructure, including robust transportation networks and telecommunications, enhances operational efficiency. Cultural richness, historical significance, and a large domestic market further bolster its appeal as a business destination. Overall, Turkey combines economic potential, strategic location, and government support, making it an enticing choice for establishing and expanding businesses.

How do you set up a business in Tukey?   

Setting up a business in Turkey involves navigating several crucial steps. Initially, entrepreneurs must decide on the appropriate legal structure for their venture, such as a Limited Liability Company (LLC) or Joint Stock Company (JSC), considering factors like liability and operational flexibility. Once a unique company name is reserved and the Articles of Association are prepared and notarized, the next step is to deposit the required initial capital into a Turkish bank account. Subsequently, registering the company with the local Trade Registry Office and obtaining a tax identification number is essential. Additional steps include registering for social security, obtaining necessary licenses and permits based on business activities, and ensuring compliance with Turkish labor laws. Throughout this process, engaging with local legal advisors or consultants can help navigate regulatory nuances and ensure all requirements are met for a successful business establishment in Turkey.

Is it possible for non-Turkish citizens to establish a private limited company in Turkey?

Yes, foreigners can establish a private limited company (Limited Şirket or LTD ŞTİ) in Turkey without requiring a local partner. This legal structure allows full foreign ownership, enabling individuals or entities from abroad to own and manage businesses independently. The process involves fulfilling standard requirements such as drafting and notarizing the Articles of Association, depositing a minimum capital (currently 10,000 Turkish Lira) into a Turkish bank account, obtaining a tax identification number, and registering with the Trade Registry Office in the relevant Turkish province. This setup provides a straightforward pathway for international entrepreneurs and investors looking to participate in Turkey's economy and market opportunities.

Where can I find guidance on establishing a business in Turkey?

To set up a business in Turkey, you can seek advice from various resources including government websites like the Republic of Turkey Ministry of Trade and the Investment Office of the Presidency, which provide detailed guides and support for foreign investors. Local chambers of commerce and the Union of Chambers and Commodity Exchanges of Turkey (TOBB) offer networking and region-specific advice. Consulting firms, law firms, and startup incubators like İTÜ ARI Teknokent also provide expert guidance. Additionally, online guides, trade fairs, and your home country’s embassy in Turkey can be valuable sources of information and support.

"Is it advisable to hire a company formation agent for setting up a business in Turkey?"

Using a company formation agent to set up a business in Turkey can be very beneficial. They offer expertise in local regulations, save time by handling paperwork, ensure legal compliance, and help overcome language barriers. Agents also provide local market insights, expedite the formation process, and often offer additional support services like tax registration and accounting. While it is possible to manage the setup independently, especially for simpler business structures, hiring an agent can streamline the process and reduce the risk of legal issues.

What Kind of Business Can a Foreigner Set Up in Turkey?

Foreigners looking to establish a business in Turkey have numerous opportunities, particularly in sectors related to tourism and expat services. Many expats set up businesses such as bars, restaurants, hotels, holiday letting companies, estate agencies, shops, and maintenance companies. These ventures are generally straightforward for foreigners to organize and manage, making them popular choices.

However, it's essential to note that some businesses require prior approval from the Ministry of Commerce and Industry. These include banks, factoring companies, private finance institutions, foreign currency exchange offices, companies subject to the Capital Markets Law, public warehousing, and operators of free-trade zones. Always consult with a lawyer and the relevant authorities to ensure compliance with Turkish regulations.

Cost and Legalities of Setting Up a Turkish Limited Liability Company

Setting up a private limited company (LLC) in Turkey typically costs around 10,000 TL, which must be deposited during the incorporation phase. Shareholders' liability is limited to the share capital invested.

Company Incorporation Process in Turkey

The process of incorporating a company in Turkey is relatively straightforward. Once the articles of association are drafted and signed by the company directors, they need to be notarized and translated if necessary. This document must conform to Article 279 of the Turkish Commercial Code and include the term "limited" in the company’s trading name. The founders must state their nationality, full names, surnames, addresses, and trading address.

After depositing the minimum share capital in a bank account, investors can begin the registration process by submitting the necessary documents and paying a fee to the Turkish Commercial Registry Office. The office will issue a registration certificate and publish the company's incorporation in the Turkish Gazette. Subsequently, the company must register for VAT with the relevant tax authority.

Turkish Laws Regarding Trading Names

Your trading name must be original and not previously registered. It should not mislead third parties, and specific words like “Turkiye,” “Turk,” “Cumhuriyet,” and “Milli” require approval from the Turkish Council of Ministers. Foreign words and titles are permissible if they do not contradict governmental or cultural laws.

Registering Your Turkish Company with the Trade Registry Office

After notarizing the articles of association, contact the Turkish Chamber of Commerce within 15 days to organize the official trade registry. You'll need the company registration application form, a written request for application, identification proving founding membership, a letter of commitment in line with Article 29 of the Trade Registry Regulations, and a receipt of payment to the Customers Fund Account (typically 1/1000 of the company’s capital). It’s advisable to have legal assistance and a trusted Turkish speaker to help with the process.

Ongoing Trading and Taxes

A private limited company in Turkey is subject to full tax on declared profits. Employing an accountant is necessary, and they typically charge a monthly fee. Tax laws and regulations frequently change, so it's crucial to consult with a knowledgeable accountant.

Overall Tips and Advice

• Do Your Homework: Research thoroughly before setting up any company in Turkey. Speak to other expats in business, your lawyer, and an accountant to assess the viability of your venture.
• Draw Up a Business Plan: Clearly set out your goals and expectations, and consider the setup and ongoing costs of running the business, including accountant fees, marketing, and taxes.
• Language Barriers: Ensure you understand the language sufficiently or have a trusted Turkish speaker to assist you with the paperwork and process.
• Citizenship by Investment: Since 2018, the Turkish government offers citizenship to those investing $250,000 in Turkish property. This can simplify the process for business owners. More details can be found in the Turkish citizenship by investment guide.

By following these guidelines and preparing adequately, foreigners can successfully set up and manage businesses in Turkey.