STARTING A
BUSINESS IN TURKEY AS A FOREIGNER
Introduction
Turkey is an attractive destination for entrepreneurs and
investors due to its strategic location, growing economy, and favorable
business environment. If you are a foreigner looking to start a business in
Turkey, understanding the legal requirements and processes is crucial to a
successful venture. At Altun Legal, our English-speaking lawyers in Istanbul
are here to guide you through every step of establishing your business in
Turkey.
Legal Framework and Business Structures
Turkey offers several types of business entities that
foreigners can choose from, each with its own legal implications and
requirements:
- Limited
Liability Company (LLC or "Limited Şirket")
- The
most common business structure.
- Requires
a minimum of one shareholder.
- Capital
requirement: Minimum TRY 10,000.
- Liability
is limited to the capital contribution.
- Joint
Stock Company (JSC or "Anonim Şirket")
- Suitable
for larger businesses and companies planning to go public.
- Requires
at least one shareholder.
- Capital
requirement: Minimum TRY 50,000.
- Shares
can be traded publicly, and liability is limited to capital.
- Branch
Office
- A
foreign company can open a branch in Turkey.
- No
separate legal identity from the parent company.
- Must
appoint a representative in Turkey.
- Liaison
Office
- Used
for non-commercial activities, such as market research.
- Cannot
engage in revenue-generating activities.
- Requires
approval from the Ministry of Industry and Technology.
Steps to Starting a Business in Turkey
1. Company Name and Registration
Choose a unique company name that complies with Turkish
naming regulations. The name must not be misleading and should clearly reflect
the business activities. Register the company name with the Turkish Trade
Registry.
2. Preparation of Articles of Association
Draft the Articles of Association (AoA), which outlines the
company’s structure, management, and operational rules. This document must
comply with Turkish Commercial Code and be notarized.
3. Opening a Bank Account
Open a corporate bank account in Turkey. Deposit the minimum
share capital required for your chosen business structure. For an LLC, this is
TRY 10,000, and for a JSC, TRY 50,000. The bank will issue a receipt confirming
the capital deposit, which is required for company registration.
4. Company Registration
Submit the notarized AoA, capital deposit receipt, and other
required documents to the Turkish Trade Registry. The registration process
usually takes a few days, and once completed, your company will receive a tax
number.
5. Obtaining Necessary Licenses and Permits
Depending on your business activities, you may need to
obtain specific licenses or permits from relevant authorities. For example,
businesses in the food, healthcare, or education sectors may require additional
approvals.
6. Registration with the Tax Office
Register your business with the local tax office to obtain a
tax identification number. You will be required to pay corporate taxes,
value-added tax (VAT), and possibly other taxes depending on your business
activities.
7. Social Security Registration
Register your company and employees with the Social Security
Institution (SGK) to ensure compliance with Turkish labor laws. This step is
mandatory for all businesses with employees.
Legal Considerations for Foreign Investors
1. Work and Residence Permits
As a foreign business owner, you will need to obtain a work
permit to legally work in Turkey. This can be done by applying to the Ministry
of Labor and Social Security. Once granted, you can also apply for a residence
permit, allowing you to live in Turkey.
2. Foreign Ownership Restrictions
Turkey generally allows 100% foreign ownership in most
sectors. However, there are restrictions in certain industries, such as media,
defense, and agriculture, where foreign ownership may be limited or require
special approval.
3. Double Taxation Agreements
Turkey has signed double taxation agreements with many
countries to prevent double taxation of income earned in Turkey. It is
advisable to consult with a tax advisor to understand the implications of these
agreements on your business.
4. Protection of Intellectual Property
Ensure that your trademarks, patents, and copyrights are
registered and protected under Turkish law. Turkey is a member of several
international intellectual property treaties, providing a robust framework for
protecting your intellectual property rights.
5. Employment Law
Understand the key aspects of Turkish employment law,
including labor contracts, working hours, termination procedures, and employee
rights. Compliance with these laws is essential to avoid legal disputes and
penalties.
How Altun Legal Can Assist
Starting a business in Turkey as a foreigner involves
navigating a complex legal landscape. At Altun Legal, our English-speaking
lawyers in Istanbul provide comprehensive legal services to help you establish
and operate your business smoothly. Our services include:
- Legal
Consultation: Understanding the best business structure for your
needs.
- Company
Formation: Assisting with the preparation and registration of
documents.
- Regulatory
Compliance: Ensuring your business meets all legal requirements.
- Work
and Residence Permits: Facilitating the application process for
permits.
- Tax
and Financial Advisory: Helping you understand your tax obligations
and optimize your business structure.
- Intellectual
Property Protection: Securing and enforcing your intellectual property
rights.
Conclusion
Starting a business in Turkey as a foreigner offers
significant opportunities but also comes with challenges. By working with
experienced legal professionals, you can ensure that your business is set up
for success and compliant with all local regulations. At Altun Legal, we are
committed to helping you navigate the complexities of Turkish business law with
confidence and ease.
