Choosing the Right Business Entity
Foreign investors can choose from several business entities when establishing a presence in Turkey. The most common structures include limited liability companies (LLCs), joint stock companies (JSCs), branch offices and liaison offices. An LLC (limited şirket) is often preferred for small to medium enterprises because it requires a minimum capital and offers flexibility in management. JSCs (anonim şirket) are suitable for larger investments and allow for public share offerings but have more complex governance requirements. Branch offices enable foreign companies to conduct commercial activities under the parent company’s legal personality, while liaison offices are restricted to non‑commercial activities such as market research and liaison work. Consulting a Turkish lawyer can help foreign investors determine which entity best suits their objectives and ensures compliance with Turkish Commercial Code provisions.
Steps to Incorporate a Company
The process of incorporating a company in Turkey involves several steps. First, founders must draft the articles of association, which outline the company’s objectives, capital structure, management and share transfer rules. These articles must be consistent with Turkish legislation and are typically prepared in Turkish. Next, the founders reserve a company name through the Central Registration System (MERSIS) and obtain a tax identification number. They must then open a bank account to deposit the required capital for JSCs or LLCs. Once the documents are prepared, the founders apply to the trade registry office with notarised copies of identification documents, signatures, and articles of association. The trade registry office will review the documents, register the company and issue a registration certificate. A Turkish English speaking lawyer can guide investors through each step, prepare documents and liaise with notary public offices and the trade registry to expedite the process.
Required Documents and Permits
Foreign shareholders and directors must provide passports, proof of address and, in some cases, certificates of good standing from their home jurisdiction. These documents must be translated into Turkish and notarised or apostilled. Depending on the type of business, investors may need additional permits or licences, such as tourism licences for hospitality businesses or permits from sectoral regulators. For example, companies in the energy, finance or telecommunications sectors may require specific approvals from the Energy Market Regulatory Authority, Banking Regulation and Supervision Agency or Information and Communication Technologies Authority. A Turkish lawyer can help identify the necessary permits, prepare applications and ensure that corporate documents meet the requirements of both Turkish and foreign authorities.
Taxation and Compliance Considerations
Companies incorporated in Turkey are subject to corporate income tax on their worldwide income. As of 2025, the standard corporate tax rate is around 25%, though incentives and exemptions may apply for certain sectors or regions. Firms must also register for value-added tax (VAT) if they supply goods or services within Turkey; the standard VAT rate is 20% with reduced rates for certain goods and services. Employers are responsible for withholding income tax and social security contributions from employees’ salaries. Foreign investors should be aware of double taxation treaties between Turkey and their home countries, which may reduce withholding tax on dividends, interest and royalties. Working with a Turkish English speaking lawyer and a tax advisor ensures that the company stays compliant with Turkish tax regulations, files timely returns and benefits from available incentives.
Role of a Turkish Lawyer in Company Formation
Establishing a company in Turkey requires navigating complex legal and administrative procedures. A Turkish lawyer plays a crucial role by drafting and reviewing articles of association, coordinating notarisation and translation of documents, assisting with bank account opening and liaising with the trade registry and tax offices. For foreign investors who do not speak Turkish, a Turkish English speaking lawyer bridges the language gap and helps them understand legal obligations, corporate governance rules and shareholder responsibilities. Lawyers can also advise on employment contracts, lease agreements and regulatory compliance, ensuring that the business operates lawfully from inception.
Conclusion
Setting up a business in Turkey offers foreign investors access to a dynamic market that bridges Europe and Asia. By choosing the appropriate business entity, following the required incorporation steps and understanding taxation and regulatory obligations, investors can establish a solid foundation for their Turkish operations. Engaging a Turkish lawyer or Turkish English speaking lawyer simplifies the process, reduces the risk of errors and ensures that the company complies with all legal requirements. Whether forming an LLC, JSC or branch, professional guidance is invaluable for a smooth and successful company formation in Turkey.
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