1. Legal Framework
The establishment of companies by foreign individuals or legal entities in Turkey is primarily governed by:
- Turkish Commercial Code No. 6102
- Foreign Direct Investment Law No. 4875
- Trade Registry Regulation
- International Labor Law No. 6735 (if the foreigner will work in the company)
- Tax Procedure Law No. 213
2. Can Foreigners Establish a Company in Turkey?
Yes. According to the Foreign Direct Investment Law, foreign individuals and legal entities have the same rights as Turkish citizens to establish companies, acquire shares, and become shareholders in Turkish companies.
Thus, a foreigner can:
- Establish a wholly foreign-owned company
- Form a joint venture with Turkish partners
- Become a shareholder in an existing Turkish company
The two most preferred company types in practice are:
- Limited Liability Company (Ltd. Şti.)
- Joint Stock Company (A.Ş.)
3. Comparison of Company Types
| Feature | Limited Liability Company (Ltd. Şti.) | Joint Stock Company (A.Ş.) |
|---|---|---|
| Minimum Capital | 50,000 TRY | 250,000 TRY (if not publicly traded) |
| Number of Shareholders | 1-50 persons | Minimum 1, no upper limit |
| Shareholder Liability | Limited to capital contribution | Limited to subscribed capital |
| Share Transfer | Requires notarization | Easier, notarization may not be required |
| General Assembly | Not always required | Must be held at least once annually |
| Management | One or more directors (managers) | Board of Directors |
4. Required Documents for Company Formation
For Foreign Individuals:
- Notarized and translated copy of passport
- Proof of address (attested by consulate if abroad)
- Notarized signature declaration
- Articles of Association (prepared via MERSIS)
- Tax identification number
For Foreign Legal Entities (as shareholders):
- Certificate of incorporation (apostilled and translated)
- Power of attorney and authorization documents
- Signature circulars of the authorized representatives
5. Step-by-Step Company Establishment Process
Step 1: Drafting the Articles of Association via MERSIS
MERSIS (Central Registration System) is used to prepare and register company documents online.
Step 2: Obtaining a Tax Identification Number
A temporary Turkish tax ID is issued for the foreign shareholder.
Step 3: Capital Deposit (For Joint Stock Companies)
25% of the capital must be deposited into a bank account before registration.
(This requirement is not mandatory for limited companies.)
Step 4: Notarization of Documents
Signature declarations, appointment of directors or managers, and other relevant documents are notarized.
Step 5: Trade Registry Registration
Application is submitted to the relevant Trade Registry Office, and upon approval, the company is officially established and announced in the Turkish Trade Registry Gazette.
Step 6: Tax Office Registration and Inspection
A company tax number is issued. A Certified Public Accountant (CPA) is appointed and an official site inspection is conducted.
Step 7: Registration with the Chamber of Commerce and Social Security Institution
The company is registered with the Chamber of Commerce and Social Security Institution (SGK).
6. What If a Foreign Partner or Manager Works in the Company?
If a foreign shareholder or director actively works in the company in Turkey, they must apply for a work permit under Law No. 6735.
- If the foreigner is only an investor/shareholder and does not work actively, a work permit is not required.
- If the foreigner has signing authority and executive duties, a work permit must be obtained from the Ministry of Labor and Social Security.
7. Hypothetical Case Example
Scenario: Ahmed, the owner of a Dubai-based e-commerce company, wants to establish a logistics company in Istanbul.
Process:
- He chooses to set up a limited liability company.
- Sends his passport, address certificate, and a notarized power of attorney to his Turkish lawyer.
- Obtains a tax ID, the Articles of Association are prepared, and the company is registered.
- Since he will act as the director, a work permit application is also submitted.
Outcome: Within 15 days, Ahmed becomes the legal owner and managing director of a Turkish company.
8. Conclusion
Foreign individuals and entities are fully entitled to establish and operate companies in Turkey. Thanks to digitalization (e.g., MERSIS), the process is efficient, transparent, and relatively fast. However, to avoid delays or legal complications—especially regarding taxation, representation, and work permits—working with an experienced lawyer and financial advisor (CPA) is highly recommended.
Prepared by:
Attorney Ferhat Küle
Istanbul Bar Association
Specialist in Commercial and Foreign Investment Law
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