Setting up a company in Turkey involves navigating through various legal and administrative processes.
This article serves as a comprehensive guide, outlining the steps and requirements for establishing a company in Turkey.
Types of Companies
The first step in setting up a company in Turkey is choosing the appropriate legal structure. The most common types of companies in Turkey are:
a. Limited Liability Company in Turkey (LLC)
This is the most preferred option for small to medium-sized businesses. It requires a minimum of one shareholder and allows for flexible management and limited liability.
b. Joint Stock Company in Turkey (JSC)
A JSC is suitable for larger businesses with multiple shareholders. It offers the option to issue shares to the public and provides flexibility in terms of capital and ownership structure.
c. Branch Office
Foreign companies can establish a branch office in Turkey to carry out specific activities. However, a branch office does not have a separate legal identity from the parent company.
Setting up a company in Turkey : Legal Requirements and Procedures
To set up a company in Turkey, the following steps and requirements must be fulfilled:
a. Company Name Reservation
The first step is to reserve a company name in Turkey. The name should be unique and not resemble any existing company names in Turkey. This can be done online through the Central Registry Gazette (MERSIS) system or in person at the Trade Registry Office.
b. Memorandum of Association
A Memorandum of Association must be prepared, outlining the company’s purpose, capital, shareholders, and management structure. This document needs to be notarized.
c. Capital Requirement
Both LLCs and JSCs have minimum capital requirements. For LLCs, the minimum capital is 10,000 Turkish Lira (TRY), and at least 25% of the capital must be paid during the establishment process. For JSCs, the minimum capital requirement is TRY 50,000, and at least 25% must be paid during incorporation.
d. Trade Registry Office
The next step is to register the company in Turkey with the local Trade Registry Office. Required documents include the notarized Memorandum of Association, company address details, identification documents of shareholders, and proof of paid-in capital.
e. Tax Registration
Upon company registration, the company must obtain a tax identification number from the relevant tax office.
f. Social Security Registration
Companies are required to register their employees with the Social Security Institution (SSI) and contribute to the social security system.
Setting up a company in Turkey : Work Permits and Visas
If you plan to work in Turkey as a foreigner or employ foreign staff, it is essential to understand the work permit and visa requirements. The Turkish government has implemented various regulations and permit categories depending on the purpose and duration of stay. It is advisable to consult with relevant authorities or seek legal assistance to ensure compliance with the immigration regulations.
Taxation and Accounting
Understanding the tax obligations and accounting practices in Turkey is crucial for any business. The tax system in Turkey includes corporate income tax, value-added tax (VAT), and social security contributions. It is advisable to engage a local accountant or tax consultant to ensure compliance and optimize tax planning.
Setting up a company in Turkey : Business Licensing and Permits
Depending on the nature of your business activities, you may need to obtain additional licenses or permits from relevant authorities. These could include sector-specific licenses, environmental permits, health and safety certificates, and more. Researching the specific requirements for your industry is important to ensure compliance.
Turkey has a well-defined labor law framework that governs employee-employer relationships. It covers aspects such as minimum wage, working hours, annual leave, severance pay, and more. Familiarizing yourself with these regulations is essential to maintain a harmonious and legally compliant work environment.
Access to Support and Incentives
The Turkish government actively supports investment and entrepreneurship through various incentives and support programs. These include tax incentives, grants, subsidized loans, and assistance in accessing markets and international networks. Engaging with local chambers of commerce, investment agencies, or industry-specific organizations can provide valuable information and access to these resources.
Setting up a company in Turkey offers exciting opportunities for entrepreneurs, thanks to its strategic location, dynamic economy, and supportive business environment. By following the necessary legal procedures, understanding tax obligations, and complying with relevant regulations, entrepreneurs can establish and operate successful businesses in Turkey. Seeking professional advice and staying updated with the latest legal and economic developments will ensure a smooth and rewarding experience in the Turkish market.