Company Registration in Turkey- An Overview

Turkey is a transcontinental country present between Europe and South Western Asia. This country is known for its cultural heritage. Company Registration in Turkey is quite straightforward; however, it is important to comply with the requirements of local law.

A company can be incorporated in Turkey with minimum one director and one shareholder. The minimum capital required for company registration in Turkey is about 10,000 Turkish Liras. A company can be incorporated in Turkey without having to be physically present.

An investor going for company registration in Turkey can incorporate a company in the Turkish free trade zone. There are lot of benefits of incorporating the company in this free zone. The government would offer different forms of benefits and tax incentives for a company incorporated in a free trade zone. Apart from this, an investor can repatriate the funds back to the home country from the Turkish Free Trade Zone.

Foreign investment is booming in the country and the government has liberalised regimes related to foreign investment. In terms of economy, Turkey is considered as one of the rapid developing economies in the world. In Western Asia, this country is ranked as the second largest receiver of foreign direct investment. Hence investors would want to go for company formation in Turkey due to the above reasons.

Turkey is present between Europe and Asia. This makes it easy to carry out transport as its location is beneficial for investors. Even though Turkey is not a part of the European Union, still it enjoys different forms of Tariffs exemptions with the European Union. Currently Turkey has a customs union with the EU, reducing the amount of customs and tariffs on goods and products.

All the above reasons make it beneficial for an investor to go for company formation in Turkey.

Benefits of Company Registration in Turkey

The following are the benefits of company registration in Turkey:

• Economy

  Turkey is considered as a rapid developing economy that accepts innovations across the world. This country is in the top 30 list for protecting investments from entrepreneurs. As per statistics, Turkey is considered as the top 60 places in the world for carrying out business activities. The current GDP of Turkey is USD 649 billion and is rising at a steady pace.

• Turkish Free Trade Zone

  An investor going for company registration in Turkey can incorporate a company in the Turkish free trade zone. There are lot of benefits of incorporating the company in this free zone. The government would offer different forms of benefits and tax incentives for a company incorporated in a free trade zone. Apart from this, an investor can repatriate the funds back to the home country from the Turkish Free Trade Zone.

• Customs Union

  Though Turkey is not a member state of the EU; still it is a part of the customs union with the EU. Hence through this union, there are lot of exemptions related to trade and tariffs with respect to Turkish Goods.

• Foreign Direct Investment

  In Western Asia, Turkey receives the largest amount of foreign investments from countries such as the UK, the USA and India. This shows that the government of Turkey has liberalised different sectors for foreign investment in Turkey.

• Ease of Doing Business

  It is quite straightforward to incorporate a company in Turkey. A company in Turkey can be incorporated with one shareholder and one director. The minimum capital required for company formation in Turkey is EUR 3300. An investor does not need to be present in Turkey to incorporate a company. All these reasons make it straightforward to carry out business in Turkey.

• Transparency

  Turkey is ranked as the top 60 destinations in the world to carry out business. As per the Transparency Index, Turkey is ranked in the top 70 places for less corruption. Hence there is no intervention of government for the process related to company registration in Turkey.

Eligible Business Structures for Company Registration in Turkey

The following are the eligible business structures for company registration in Turkey:

• Turkish Joint Stock Company

  This entity is also known as a ‘JSC’. The Joint Stock Company in Turkey is similar to a public limited company. The board members as well as the shareholders of the company have to be appointed. This form of entity can list its shares in a publicly listed Turkish stock exchange.

• Turkish Limited Liability Company

  This entity is also known as an ‘LLC’. The liability of this type of entity is limited to a particular amount. The members have separate liability from that of the company. Directors and shareholders have to be appointed for carrying out respective duties. An LLC is usually managed by a manager.

• Branch Office

  A branch office is a mere extension of the foreign parent company. Usually the liability of the branch office would come under the parent company. The foreign parent company is liable for all the debts of the branch office. Profit making activities can be carried out by a branch office. This entity would also have to pay specific percentage of corporate tax.

• Representative Office

  Like a branch office, the representative office is also a mere extension of the foreign parent company. The liability of the representative office would come under the scope of the foreign parent company. A representative office would only carry out market research and activities which promote the work of the foreign parent company. The representative office is not allowed to carry out any form of profit making activities.

• Turkish Free Zone Company

  A Turkish Free Zone Company can be incorporated with ease. There are lot of allied benefits by having this form of company. Capital can be repatriated back to the home country utilising this form of entity.

Minimum Eligibility Criteria for Company Registration in Turkey

The following eligibility criterion is considered for company registration in Turkey:

• Minimum capital

  The minimum capital for forming a Joint Stock company in Turkey is 50,000 Turkish Liras (TL). However the capital for Non-Public Joint Stock Companies is TL 100,000. The minimum amount of capital for a limited company or a limited liability company is TL 10,000.

• Minimum Shareholders

  There is no minimum amount of shareholders required for a Joint stock company and a Limited Liability Company. However, as per the rule of the thumb, minimum of one shareholder is required for forming this type of company.

• Minimum Directors

  At least one director is required for the process of company registration in Turkey. There is no upper limit required for company registration in Turkey. For a Limited Liability Company, the partner or the manager would have the capacity to represent the company.

• Residency Requirements

  This would not be a criterion for company registration in Turkey. Only branch offices with specific requirements would require appointing a local representative.

Procedure for Company Registration in Turkey

The following procedure is required for company registration in Turkey:

• Register with MERSIS

  In the first step, for company registration the applicant would have to create an account with MERSIS. All applicants would be allowed to utilise the online system. For foreign applicants, first a tax number would be required for registering with MERSIS.

• Online System

  The Online system related to MERSIS is linked to contracts, which can be created by inputting certain information related to the application. The Tax Number of the Company would also be created by the above system. Authorised representatives would require to sign contracts. Some companies would require to carry out requirements as the Trade Registry Directorate.

• Notary

  Suppose the approval process is directed to the Notary, then such requirements have to be carried out in the respective notary. Once the notary has carried out the requirements, the signatures would be verified. After this declarations would also be prepared by the individuals.

• Depositing of Capital

  0.04% of the authorised capital of the company must be deposited in the bank account. This bank account would belong to the ‘share competition authority’. This amount can be paid in the respective trade registry with all the other transactions. For joint stock companies, 25% of the amount in cash has to be deposited in the bank account. This would be for the process of registering the company.

• Trade Registry Application

  In the next step, the applicant has to make an application with the trade registry. Such application would have to be made with the trade registry directorate. After the application is vetted, the trade registry would give confirmation.

Compliances for Company Registration in Turkey

The following compliances are required for company registration in Turkey:

• Shareholders Meeting

  It is compulsory to convene shareholders meeting within three months at the end of the accounting year.

• Extraordinary General Meeting

  The Shareholders would call an extra ordinary general meeting when required.

• Board of Directors Meeting

  Board Meetings have to be carried out in compliance with the articles of association of the company.

• Corporate Tax

  The Company has to file tax returns with the relevant tax authorities. The tax paid by companies in Turkey would be 20%.

• Business registration

  Initial Registrations as well as annual filings have to be carried out by companies registered in Turkey.

Documents required

The following documents are required for company registration in Turkey:

• Articles of Association of the Company along with promoters signatures
• Information that 25% of the capital is contributed in the bank
• Proof or evidence of payment regarding the competition authority
• Valuation Reports of the Company to Determine the cash assets and non-cash assets
• For other forms of capital- Document stating that there is no restriction on the capital
• Document or information showing that respective intellectual property rights are rightfully owned
• All pre-incorporation and post incorporation contracts
• Respective Approvals from the ministry
• Board of Directors information related to the duties
• Information on the directors  (notarised copy that the board is taking rightful of competent body for registration)
• Authorised Signatures that individuals are qualified for binding the company
• Any form of agreements entered into by the company
• Signature of Declarations of the Directors of the Company
• Approval of Signatures by the Trade Registry of the Company.

How to reach Enterslice for Company Registration in Turkey

Fill The Form

Get a Callback

Submit Document

Track Progress

Get Deliverables