How to Set up Business in Turkey? Company Formations in Turkey

In this article, you will get find information on how to set up business in Turkey, for foreign capital owners who want to move their business or get into an overseas business partnership, and the process. Cooperation with foreign companies is important in order to adapt to the changing international competition along with globalization rapidly. For foreigners, it is free to set up companies or business partnerships in different fields in Turkey. The rules for establishing a company by foreign natural or legal persons in Turkey are the same as for domestic investors.

Content Guide 

1. Company Types in Turkey

1.1 Joint Stock Companies

• Various equivalents of joint stock companies in the world

1.2 Limited Liability Companies

• Various equivalents of limited liability companies in the world

1.3 Unlimited Liability Companies

1.4 Cooperatives

2. How to set up a company in Turkey?

2.1 Process of Business Setup in Turkey

3. Legal Basis

4. Required Documents for Business Setup in Turkey

4.1 Necessary Documents for Joint Stock Companies

4.2 Necessary Documents for Limited Companies

4.3 Necessary Documents for Collective Companies and Limited Partnerships

4.4 Necessary Documents for Cooperatives

1. Company Types in Turkey | Set Up Business in Turkey 

How to start business or what is the legal basis for set up company partnership in Turkey? There are 5 different types of companies that can be established in Turkey. The company type with the highest share is the limited company. According to the Turkish Commercial Code No. 6102, foreign capital owners are allowed to establish all types of companies, and the main features and functions are regulated.

• Capital Companies (95%)

Joint Stock Companies (13%)

Limited Companies (82%)

Limited Partnerships Divided into Shares

• Private Companies (1%)

Collective Companies

Ordinary Limited Partnerships

• Cooperatives (4%)

*About the cooperatives, Cooperatives Law No. 1163 is applied.

1.1 Joint Stock Companies 

A joint stock company is a company whose capital is divided into shares. It is responsible for its debts only with its property holdings. Shareholders are only liable to the company with the capital shares they have committed.

General Assembly and Board of Directors

Joint stock companies may be established for any economic purpose and subject. A joint stock company with a single share can be established. Shareholders may transfer their shares to others.

The establishment of certain joint stock companies in Turkey are subject to the permission of the Ministry of Trade;

• Financial leasing companies
• Banks
• Factoring companies
• Asset management companies
• Companies operating foreign exchange
• Companies engaged in public retailing
• Agricultural products licensed warehousing companies
• Technology development zone management companies
• Companies subject to the Capital Markets Law No. 6362,
• Founder and operator companies of the free zone

Equivalents of Joint Stock Company in the World

Corporation: USA, Canada

Societas Europea(SE): EU

Aktiengesellschaft(AG): Germany, Austria, Switzerland

Societe Anonyme: France, Belgium, Switzerland

Public Limited Company: UK

Societa per Azioni (SpA): Italy

Sociedad Anonima(S.A.): Spain, Mexico, Argentina

1.2 Limited Liability Companies

A limited company is a company whose capital is divided into shares and is responsible for its debts only with its property holdings

The shareholders of a limited liability company are not liable for the debts. However, they are obliged to pay only the capital shares they have committed and to fulfill the additional payment in the company contract.

They are responsible for capital debts due to uncollectible public debts at the rate of their capital shares.

Limited Company Features:

• A limited company with a single shareholder can be established.
• The number of shareholders may not exceed 50.
• Partners of a limited company may be real or legal persons.
• The capital of the limited company is at least 10.000 TL.
• The payment schedule can be arranged in the company contract.
• Limited companies cannot be offered to the public.

Limited companies have 2 organs as General Assembly and Board of Directors.

Equivalents of Limited Company in the World

Limited Liability Company (LLC): USA

Societas Privata Europaea (SPE): EU

Gessellschaft mit beschrankter Haftung (GmbH): Germany, Austria, Switzerland

Societe a Responsabilite Limitee (SARL, SaRL): France, Belgium, Switzerland

Private Limited Company(Ltd, Limited): UK

Societa A Responsabilita Limitata (Srl): Italy

Sociedad Limitada (S.L.): Spain

Sociedad de Responsabilidad Limitada(S.R.L, S. De R.L.): Mexico, Argentina

1.3 Unlimited Liability Companies | Collective Companies

Collective companies included in private companies are established with at least two partners.

There is no capital requirement.

Only real persons may be partners in the collective companies and each partner has the right to manage the company. The management business may be assigned to one, several or all of the partners, either by company agreement or by the majority of partners.

1.4 Cooperatives

Cooperatives are companies with varying partnerships and capitals. Cooperatives are established in order to provide and protect the specific economic interests of partners and especially their needs related to their profession or livelihoods.

Each partner undertakes at least 1%, at most 5% thousand shares.

A cooperative company is not a private company or a capital company; it is a commerce company. The cooperative can be established with at least seven partners.

The members of the board of directors of cooperative companies in Turkey may be elected for a maximum term of four years.

2. What are Company Establishment Procedures and Steps in Turkey?

How to setup a company in Turkey?

The procedures for set up business in Turkey are easy to follow. In order to establish a company, you need to submit the necessary documents to the Trade Registry Directorate. Your transactions are completed within a minimum of one hour.

You do not need to pay any fees to establish a company in Turkey.

Company Establishment Procedures are performed on the Central Registry System.

2.1 Process of Business Setup in Turkey | Company Establishment Procedures in Turkey

Preparation of the Company Contract

• Start the process by creating a free membership via MERSIS internet address.

You can use your ID if you are a Turkish citizen.

Foreigners can create a membership on MERSIS with their passport numbers.

You can be a partner or authority.

*****First step for foreigners to set up business in Turkey

Firstly, foreigners need to get a tax number from the tax office and register it to MERSIS by applying to the trade registry office.

• Your company contract is legally prepared as soon as you register with MERSIS. Your company contract is prepared in Turkish. Your company tax number is automatically given by the system.

• Partners are required to sign the contract. They also need to go to the competent authority to check the signatures. For this process, it is necessary to go to the Notary Public or Trade Registry Office where the company headquarters are located. You can use the tracking number obtained from MERSIS for the transaction to be carried out.

• The contract is electronically transmitted to the notary public by MERSIS.

The first step is completed!

Preparation of signature declarations of company officials and authorities

0.04% of the Company’s capital must be deposited as “Share of the Competition Authority”

No need to go to the bank for the transaction.

Application to the Trade Registry Directorate

In the establishment of joint stock and limited companies and the cooperatives, the commercial books to be kept by these are approved by the trade registry directorate.

Read Article: Turkish Citizenship Guide

3. What is the Legal Basis for Establishing a Company in Turkey?

Set up business in Turkey for foreigners has the same legal bases and rights as local companies. In accordance with the Turkish Commercial Code, there are no restrictions for foreign companies established with an approach that meets international standards and encourages private capital and public offering activities. Any type of company can be established by foreigners in Turkey.

4. What are the Documents Required to Set up Business in Turkey?

Documents to be submitted to the Trade Registry Office vary according to the Company Types to be established in Turkey.

4.1 Necessary Documents for Joint Stock Companies | Set Up Business in Turkey

These documents should be completed during the establishment of the Joint Stock Companies. Here is the list of necessary documents for the incorporation of a joint stock company:

• A document of which the signatures of the founders have been certified
• A document showing that at least 25% of the capital committed in cash is deposited in the bank
• Proof of payment indicating that the Competition Authority’s share has been paid
• Varies according to company type; expert valuation report for the determination of capital, business or assets to be taken over
• A report on whether there are any restrictions on the capital and assets that the shareholders put in during the establishment phase of the company
• Permission letter for companies whose establishment depends on the permission of the ministry or other official institutions
• The written statements of non-shareholder board members about their acceptance of the duty
• The signature declarations of persons authorized to represent the company
• In the case of a legal person in the board of directors, the notarized copy of the decision of the competent body for determination of the name and surname of the real person

4.2 Necessary Documents for Limited Companies | Set Up Business in Turkey

These documents should be completed during the set up of the Limited Companies in Turkey. Here is the list of necessary documents for establishment of a limited company:

• The company contact with approved signatures of founders
• Written statements of non-partner member of board of directors that they accept the duty
• In the case of a legal person in the board of directors, the notarized copy of the decision of the competent body for determination of name and surname of the real person
• A valuation report on whether there are any restrictions on the capital and assets that the shareholders put in during the establishment phase of the company.
• The document showing that the immovable, intellectual property rights and other values put as capital in kind are annotated to the registries
• Signature declarations of company directors
• Document of payment indicating that the Competition Authority’s share has been paid

4.3 Necessary Documents for Collective Companies and Limited Partnerships

Necessary documents for the set up of collective companies and limited business partnerships are as follows:

• The company contract, that the signatures of the founders approved by a notary public
• An approved copy of the signatures to be signed under the title of the company by the persons authorized to represent and bind the company
• For limited partnership, if the dormant partner had committed capital other than cash, valuation report prepared by the court appointed expert for the determination of the value of the non-cash assets
• A valuation report on whether there are any restrictions on the capital and assets that the shareholders put in during the establishment phase of the company
• Document showing that the immovable, intellectual property rights and other values put as capital other than cash are annotated to the registries where they are registered

4.4 Necessary Documents for Cooperatives | Set Up Business in Turkey

Necessary documents for the establishment of cooperatives are as follows:

• The company contract, that the signatures of the founders are approved by the trade registry directorate
• Authorization letter for the establishment of the cooperative
• Signature declarations of the persons authorized to represent and bind the cooperative under the title of cooperative

The type of company preferred by foreign investors in Turkey is limited liability company and joint stock company. Limited Liability Companies and Joint Stock Companies are the most popular company types both in the world and Turkey. Foreigners and Turkish citizens have the same right to establish a company.

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