Introduction

Turkey is an important commercial hub connecting Europe, the Middle East, Central Asia, the Caucasus and the Mediterranean region. Its large domestic market, developed banking system, manufacturing capacity, logistics infrastructure and access to regional markets have made the country an increasingly important destination for international entrepreneurs.

Foreign investors considering Turkey frequently ask one fundamental question:

Can a foreigner establish a company in Turkey?

The answer is generally yes.

A foreign national or foreign legal entity may establish and own a company in Turkey. In most ordinary sectors, there is no requirement to have a Turkish shareholder, and a Turkish company may therefore be 100% foreign-owned.

Türkiye’s foreign direct investment regime is based on the principle of equal treatment. Official investment guidance expressly states that international investors generally have the same rights and obligations as domestic investors in relation to establishing companies and transferring shares. Foreign investors may establish the company forms recognized under the Turkish Commercial Code.

However, establishing the company is only the first stage.

Foreign entrepreneurs should distinguish between:

• owning shares in a Turkish company,
• being appointed as a director or manager,
• physically working in Turkey,
• obtaining a work permit,
• obtaining a residence permit,
• opening and operating Turkish bank accounts,
• employing personnel,
• obtaining sector-specific licences, and
• complying with tax, accounting and foreign-investment reporting obligations.

These are related but legally separate issues.

An individual may legally own 100% of a Turkish company without automatically acquiring the right to live or work in Turkey.

Similarly, registration of a company does not automatically mean that a bank must open an account, that the company may conduct every regulated activity, or that its foreign shareholder can obtain Turkish citizenship.

For international entrepreneurs, proper company formation therefore requires more than registering a corporate name.

This guide explains the principal rules governing company establishment in Turkey by foreigners, including the choice between a limited liability company and a joint stock company, minimum capital, foreign shareholder requirements, management rules, MERSIS registration, tax obligations, work permits and common legal risks.

Can a Foreigner Own 100% of a Company in Turkey?

Generally, yes.

Turkey’s foreign investment legislation is based upon the principle that foreign investors should receive treatment comparable to domestic investors.

Accordingly, in most ordinary commercial sectors, a foreign investor does not need:

• a Turkish citizen shareholder,
• a Turkish majority shareholder,
• a Turkish business partner, or
• a minimum percentage of Turkish ownership

merely to establish a Turkish commercial company.

A company can therefore generally be established with:

one foreign individual as the sole shareholder, or

one foreign legal entity as the sole shareholder.

The Turkish Commercial Code permits both single-shareholder joint stock companies and single-member limited liability companies. The Ministry of Trade confirms that both corporate forms may be established by a single person.

Foreign ownership restrictions may nevertheless exist in particular regulated or strategic sectors.

Examples may include activities governed by special legislation relating to areas such as:

• banking,
• insurance,
• payment services,
• capital markets,
• broadcasting,
• aviation,
• maritime activities,
• energy,
• telecommunications,
• defence-related activities, or
• other licensed industries.

Accordingly, foreign ownership should be reviewed separately where the proposed company will operate in a regulated sector.

What Law Governs Company Formation in Turkey?

The central legislation is Turkish Commercial Code No. 6102 — Türk Ticaret Kanunu.

The Turkish Commercial Code regulates matters including:

• incorporation,
• share capital,
• shareholders,
• company management,
• representation,
• general meetings,
• directors,
• share transfers,
• corporate records,
• financial reporting,
• mergers,
• divisions,
• liquidation, and
• corporate liability.

Foreign investments are also governed by the Foreign Direct Investment Law No. 4875 and related regulations.

The foreign investment regime is important because it establishes the basic equal-treatment framework for foreign investors.

Commercial registration procedures are primarily carried out through the Trade Registry Directorates operating within local chambers of commerce.

Turkey has increasingly digitalized these procedures through MERSIS — the Central Registry Record System.

The Ministry of Trade describes MERSIS as the central electronic system used for company registration, amendments, deregistration and storage of commercial registry information.

What Types of Companies Can Foreigners Establish in Turkey?

The Turkish Commercial Code recognizes several company forms.

These include:

1. Joint Stock Company — Anonim Şirket (A.Ş.)
2. Limited Liability Company — Limited Şirket (Ltd. Şti.)
3. General Partnership — Kollektif Şirket
4. Limited Partnership — Komandit Şirket
5. Partnership Limited by Shares — Sermayesi Paylara Bölünmüş Komandit Şirket

In practice, the two most commonly used structures by both Turkish and foreign investors are:

Limited Liability Company — Ltd. Şti.

and

Joint Stock Company — A.Ş.

Official investment guidance similarly identifies these as the two principal corporate structures used in Turkey.

For most international entrepreneurs, the decision will therefore be between an LLC-type structure and a joint stock company.

Limited Liability Company in Turkey — Ltd. Şti.

A Turkish limited liability company is frequently chosen by:

• small and medium-sized businesses,
• international consultants,
• technology companies,
• import-export businesses,
• foreign entrepreneurs,
• professional service businesses,
• e-commerce companies,
• family-owned businesses, and
• subsidiaries conducting relatively straightforward commercial operations.

A limited company may be established by one or more natural or legal persons.

Under Turkish law, the maximum number of shareholders in a limited company is generally 50.

The Ministry of Trade confirms that a Turkish limited company may have between one and fifty natural or legal-person shareholders.

Minimum Capital for a Turkish Limited Company in 2026

As of 2026, the minimum registered capital for a newly established Turkish limited liability company is:

TRY 50,000.

The threshold was increased from TRY 10,000 to TRY 50,000 with effect from 1 January 2024.

Foreign investors should distinguish between the legal minimum and the commercially appropriate capital.

A company legally established with TRY 50,000 may still find that this amount is insufficient for its actual business plan.

Capital may affect:

• banking assessments,
• commercial credibility,
• financing,
• work permit eligibility for foreign shareholders,
• tender participation,
• regulated activity requirements, and
• relationships with suppliers.

Accordingly, simply selecting the statutory minimum is not always advisable.

When Must Limited Company Capital Be Paid?

For a Turkish limited liability company, the subscribed cash capital does not generally have to be deposited before registration merely because the company is being established.

Official investment guidance states that the subscribed capital of a limited company may generally be paid within 24 months following incorporation, subject to the company’s constitutional provisions.

This differs from the capital payment procedure applicable to joint stock companies.

Management of a Turkish Limited Company

A Turkish limited liability company is managed and represented by one or more managers — müdürler.

A manager may generally be:

• a shareholder,
• a non-shareholder,
• a Turkish citizen,
• a foreign national, or
• in certain circumstances, a legal entity.

However, at least one shareholder must be granted management and representation authority.

The Ministry of Trade expressly confirms that at least one shareholder must be appointed as a manager, while non-shareholders may also be appointed as managers.

The articles of association should clearly determine the company’s management and representation structure.

This is particularly important where there are multiple foreign investors.

Questions that should be addressed include:

• Who can sign contracts?
• Is one signature sufficient?
• Are two managers required to sign jointly?
• Can payments above a threshold require joint approval?
• Who can operate bank accounts?
• Who can employ or dismiss personnel?
• Who can borrow money on behalf of the company?
• Who can sell major assets?

Many shareholder disputes arise not from ownership percentages themselves but from poorly structured management and representation provisions.

Joint Stock Company in Turkey — A.Ş.

The Turkish joint stock company is often more suitable for:

• larger investments,
• joint ventures,
• businesses expecting multiple investors,
• venture capital investments,
• institutional shareholders,
• businesses expecting future share transfers,
• companies seeking external financing,
• enterprises that may eventually enter capital markets, and
• structures requiring different classes of shares.

Under Turkish law, a joint stock company may also be established by a single shareholder.

The company’s management and representation are handled by a board of directors consisting of one or more members.

Minimum Capital for a Turkish Joint Stock Company in 2026

As of 2026, the statutory minimum capital for an ordinary joint stock company is:

TRY 250,000.

For a non-public joint stock company adopting the registered capital system, the minimum initial capital is:

TRY 500,000.

These thresholds have applied to newly incorporated companies since 1 January 2024.

Capital Payment for a Joint Stock Company

Unlike a limited company, a joint stock company is generally subject to a pre-registration capital payment requirement.

Official investment guidance states that at least 25% of the subscribed cash capital must generally be paid before registration, with the remaining amount payable within two years.

This difference should be taken into account when deciding between an A.Ş. and a Ltd. Şti.

Limited Company or Joint Stock Company: Which Is Better for a Foreign Investor?

There is no single answer.

A limited company may be preferable where:

• there is one entrepreneur or a small number of shareholders,
• the business is expected to remain privately held,
• administrative simplicity is important,
• no sophisticated investment rounds are expected, and
• the business will be relatively closely managed.

A joint stock company may be preferable where:

• outside investors may join,
• multiple share classes are needed,
• equity transfers are expected,
• venture capital or institutional investment is contemplated,
• the business may eventually seek capital-market access, or
• shareholder exit flexibility is particularly important.

Another important distinction concerns shareholder liability for certain public debts.

Although both structures are capital companies with limited liability as a general principle, limited company shareholders may face specific statutory liability for certain unpaid public receivables under Turkish public-debt legislation when those debts cannot be collected from the company.

This issue can make an A.Ş. more attractive in some investment structures.

The corporate form should therefore be selected according to the intended investment model rather than merely on the basis of incorporation cost.

Can a Foreign Legal Entity Establish a Turkish Subsidiary?

Yes.

A foreign company can become a shareholder of a Turkish company.

For example, a company incorporated in:

• the United Kingdom,
• Germany,
• the United States,
• the UAE,
• China,
• France,
• the Netherlands,
• Switzerland, or
• another jurisdiction

may establish a Turkish subsidiary.

The foreign parent may own 100% of that Turkish subsidiary if no sector-specific restriction applies.

For a foreign corporate shareholder, the Turkish Trade Registry will generally require documents showing matters such as:

• the legal existence of the foreign entity,
• its current activity or good-standing status,
• authorized representatives,
• the corporate decision approving the Turkish investment, and
• the representative authorized to complete the incorporation procedure.

Foreign corporate documents usually need to satisfy Turkish legalization requirements.

Official investment guidance provides that foreign documents must generally be notarized and apostilled or authenticated through the relevant Turkish consular process, followed by official Turkish translation and notarization where applicable.

Apostille and Legalization of Foreign Documents

Document legalization is one of the most common sources of delay for foreign founders.

Where documents are issued in a country that is party to the Hague Apostille Convention, an apostille will commonly be required.

Documents may include:

• company registration certificates,
• certificates of activity,
• board resolutions,
• powers of attorney,
• shareholder resolutions, and
• authority documents.

Where the issuing country is not within the applicable apostille framework, consular legalization may instead be necessary.

The document will generally then need an official Turkish translation and notarization.

The exact process should be verified before documents are sent to Turkey.

An incorrectly legalized board resolution can delay the entire company incorporation.

Do Foreign Shareholders Need a Turkish Tax Number?

Foreign shareholders and foreign directors or managers may require a Turkish potential tax identification number for the incorporation process.

Official investment guidance states that potential tax numbers are obtained for non-Turkish shareholders and relevant foreign board members and may also be necessary for banking procedures connected with incorporation.

Foreign founders should ensure that the name, surname, passport number and nationality are recorded consistently.

Small differences in transliteration can later cause problems with:

• banks,
• MERSIS,
• tax records,
• work permit applications,
• residence applications, and
• share transfers.

What Is MERSIS?

MERSIS — Merkezi Sicil Kayıt Sistemi is the electronic Central Registry Record System used for Turkish commercial registry transactions.

Company incorporation begins with preparation of the articles of association through MERSIS.

The Ministry of Trade explains that MERSIS allows corporate registration, amendments and deregistration procedures to be conducted electronically and creates a unique central record for legal entities.

The company’s articles of association normally include information such as:

• company name,
• registered office,
• business purpose,
• capital,
• shareholders,
• shareholding structure,
• managers or directors,
• representation structure, and
• other corporate provisions.

The articles should not be treated as a formality.

For foreign investors, they can become a central governance document.

Choosing the Company’s Business Activities

A company should identify its principal commercial activities accurately.

The stated business activities can affect:

• tax registration,
• NACE codes,
• licensing,
• workplace permits,
• sector-specific requirements,
• banking compliance,
• social-security classification, and
• investment incentives.

Although the modern Turkish Commercial Code abolished the classical ultra vires limitation for commercial companies, regulated activities may still require separate permits or approvals. The Ministry of Trade confirms that the abolition of the ultra vires doctrine does not eliminate requirements imposed by sector-specific legislation.

An investor should therefore avoid drafting an excessively generic corporate purpose without considering the actual intended business.

Company Name Requirements

The proposed trade name must comply with Turkish commercial law.

The name must not unlawfully conflict with registered names and may need to contain wording identifying the corporate form.

Certain expressions may be restricted or require approval.

Foreign brands should also consider trademark protection separately.

Registering a company name does not automatically provide the same protection as registering a trademark.

International entrepreneurs planning long-term operations in Turkey should therefore consider:

• company-name searches,
• Turkish trademark searches,
• domain-name availability, and
• brand registration

before launching operations.

Registered Office in Turkey

A Turkish company must have a registered address in Turkey.

The address is important because it affects:

• competent Trade Registry Directorate,
• tax office,
• official notifications,
• municipal requirements,
• banking KYC, and
• actual business operations.

A rental agreement or other evidence relating to the registered premises may be required during tax registration procedures.

Foreign founders should be cautious about using artificial or unreliable addresses merely to complete incorporation.

The company’s official address is the location to which tax authorities, courts and other public bodies may send legally significant notifications.

Failure to monitor the registered address can therefore have serious consequences.

Step-by-Step Company Formation Process in Turkey

Although requirements differ according to company type and shareholder structure, a typical foreign-owned company formation process may include the following stages.

Step 1 — Determine the Appropriate Corporate Structure

The founders choose between:

• Ltd. Şti.,
• A.Ş.,
• branch office,
• liaison office, or
• another appropriate form.

For ordinary commercial activity, the main choice will often be Ltd. Şti. versus A.Ş.

Step 2 — Determine the Shareholding Structure

The founders decide:

• who will own the shares,
• percentages of ownership,
• capital commitments,
• voting structure, and
• whether any special shareholder rights are required.

Where multiple founders are involved, a shareholders’ agreement should be seriously considered.

Step 3 — Determine Directors or Managers

Management and representation powers should be structured.

This stage should identify:

• managers or board members,
• authorized signatories,
• single or joint signature requirements, and
• limitations or internal approval mechanisms.

Step 4 — Obtain Tax Identification Numbers

Foreign individuals who require Turkish tax identification numbers complete the necessary tax registration procedure.

Step 5 — Prepare the Articles Through MERSIS

The incorporation data and constitutional documents are prepared through the MERSIS system.

Step 6 — Legalize Foreign Documents

Foreign corporate records, resolutions and powers of attorney are apostilled or otherwise legalized and translated as required.

Step 7 — Handle Capital Requirements

For an A.Ş., the applicable pre-registration share capital deposit is completed.

For a Ltd. Şti., the subscribed capital can generally be paid within the statutory period, depending on the articles of association.

Step 8 — Pay the Competition Authority Contribution

Official incorporation guidance provides for payment corresponding to 0.04% of the company’s capital to the Competition Authority during the registration process.

Step 9 — Register at the Trade Registry

The company is registered before the competent Trade Registry Directorate.

The Turkish investment authorities describe the Trade Registry Directorate as a one-stop point for company establishment, with properly prepared incorporations capable of being completed very quickly.

Step 10 — Commercial Registry Gazette Publication

Following registration, the company’s incorporation information is published in the Turkish Trade Registry Gazette.

Step 11 — Tax Registration

The Trade Registry communicates incorporation information to the tax authorities.

The company then completes the remaining tax registration and verification procedures.

Step 12 — Social Security Registration

Where the company will employ personnel, the relevant Social Security Institution — SGK — obligations must also be completed.

Step 13 — Open the Corporate Bank Account

The company proceeds with bank onboarding and compliance checks.

Step 14 — Obtain Sector-Specific Licences

Where necessary, the company obtains operational permits, municipal licences or regulatory approvals.

Can a Turkish Company Open a Bank Account?

Yes, a duly incorporated company can generally apply for a Turkish corporate bank account.

However, company incorporation does not create an automatic legal entitlement to immediate bank onboarding.

Banks conduct their own:

• KYC procedures,
• anti-money-laundering checks,
• sanctions screening,
• beneficial-owner analysis,
• business-model review, and
• source-of-funds checks.

A foreign-owned company may be asked to provide:

• articles of association,
• Trade Registry Gazette,
• tax certificate,
• signature documentation,
• shareholder passports,
• beneficial ownership information,
• business contracts,
• invoices,
• website information,
• expected transaction volumes,
• source-of-funds documents, and
• information about countries with which the company will trade.

International entrepreneurs should therefore avoid assuming that opening the company and opening the bank account are identical procedures.

Banking compliance can sometimes be the more detailed process.

Can a Foreign Shareholder Work in Their Own Turkish Company?

This is one of the most important distinctions in Turkish company law and immigration law.

Owning a Turkish company does not automatically give a foreigner the right to work in Turkey.

A foreign national who actively works in, manages or performs employment-type activities for the company may need an appropriate Turkish work permit unless an exemption applies.

The work permit rules are therefore separate from the rules governing ownership of shares.

A foreigner may legally be:

• the sole shareholder of the company,

while still needing:

• separate work authorization

to physically perform work in Turkey.

Work Permit Criteria for Foreign Company Partners

As of 2026, the Ministry of Labour’s published work permit evaluation criteria provide specific conditions for foreign company partners.

For businesses subject to the balance-sheet method, the Ministry currently states that a foreigner opening a new business or becoming a partner in an existing business must generally have:

• at least TRY 500,000 as their share of company capital,
• the company’s total paid-up capital must also be at least TRY 500,000, and
• the foreigner’s shareholding must be at least 20%.

In addition, the business generally needs to employ at least five Turkish citizens, although for an initial work permit issued to a foreign business owner or shareholder, the employment condition begins to apply from the start of the seventh month of the permit.

These requirements are particularly important because the minimum capital needed merely to incorporate a company is very different from the financial criteria that may apply to a foreign shareholder’s work permit.

For example:

A foreign entrepreneur can legally establish a Ltd. Şti. with TRY 50,000 minimum capital.

But if that individual then expects to obtain a work permit as a foreign shareholder, the work permit criteria may require substantially greater capital and employment commitments.

This distinction should be considered before incorporation.

Does Establishing a Company Give a Residence Permit?

No.

A common misconception is that establishing a company in Turkey automatically creates a residence permit.

It does not.

Company ownership and immigration status are legally distinct.

A foreign shareholder must separately determine whether they qualify for:

• a residence permit,
• a work permit,
• a work permit exemption, or
• another legal basis to stay in Turkey.

In many circumstances, a valid work permit also provides a lawful basis for residence during its validity.

However, the company itself does not function as an automatic immigration permit.

Does Establishing a Company Give Turkish Citizenship?

No.

Establishing an ordinary company does not automatically result in Turkish citizenship.

Certain substantial investments can potentially qualify for exceptional citizenship under separate Turkish citizenship-by-investment legislation.

For example, specific fixed-capital investment thresholds may qualify under the applicable citizenship program.

However, ordinary incorporation of a Turkish limited company does not create citizenship rights merely because the founder is foreign.

Company formation, residence, work authorization and citizenship should therefore be planned as four separate legal questions.

Corporate Tax in Turkey in 2026

A Turkish incorporated company is generally subject to Turkish corporate income tax on its taxable profits under the applicable tax legislation.

For the 2026 financial year, the general corporate income tax rate is:

25%.

The Turkish Revenue Administration confirms that the standard corporate tax rate applicable to ordinary corporate taxpayers in 2026 is 25%. Certain financial institutions and specified businesses are subject to a 30% rate.

Special reduced rates or tax incentives may apply to certain activities, including qualifying manufacturing or export income.

Tax consequences should therefore be assessed according to the company’s actual activity.

VAT and Other Taxes

A Turkish company may also be subject to other taxes and fiscal obligations, including:

• Value Added Tax — VAT,
• withholding tax,
• stamp tax,
• payroll-related taxes,
• social security contributions,
• customs duties,
• special consumption taxes where applicable, and
• sector-specific fiscal obligations.

The precise tax treatment depends upon what the company does.

For example, the tax structure of:

• a software exporter,
• a restaurant,
• an import company,
• a property development business,
• an online marketplace, and
• a manufacturing business

will not be identical.

International investors should therefore obtain Turkish accounting and tax advice when designing their operational model.

Double Taxation and Foreign Shareholders

Turkey has entered into numerous double taxation treaties.

A foreign shareholder receiving:

• dividends,
• interest,
• royalties,
• management fees, or
• other cross-border payments

may therefore need to consider both Turkish domestic tax law and the applicable tax treaty.

The existence of a tax treaty does not mean that no tax is payable.

Rather, the treaty may:

• allocate taxing rights,
• reduce withholding tax,
• prevent double taxation, or
• provide tax-credit mechanisms.

International group structures should ideally be reviewed before the Turkish company begins making cross-border related-party payments.

Transfer Pricing and Related-Party Transactions

Where the Turkish company conducts business with:

• its foreign parent,
• foreign shareholders,
• affiliated companies,
• sister companies, or
• related persons,

Turkish transfer pricing rules may become relevant.

Transactions should generally be conducted on arm’s-length terms.

This can affect:

• management fees,
• intercompany loans,
• royalty payments,
• licence fees,
• purchases,
• sales,
• service arrangements, and
• cost-sharing.

Foreign groups should not treat the Turkish subsidiary as a bank account through which arbitrary payments can be transferred without tax analysis.

Beneficial Ownership Reporting

Turkish tax and anti-money-laundering rules also require identification of the company’s real or ultimate beneficial owner — gerçek faydalanıcı.

The Revenue Administration’s beneficial-ownership framework generally identifies natural persons owning more than 25% of a legal entity as beneficial owners, while control must be examined where ownership alone does not identify the ultimate beneficial person.

Beneficial-owner information can be relevant to:

• tax filings,
• banks,
• compliance procedures,
• accountants,
• financial institutions, and
• public authorities.

Using multiple foreign holding companies does not eliminate the requirement to identify the ultimate natural persons who control the corporate structure.

Foreign Direct Investment Reporting — E-TUYS

Foreign-owned companies may have additional reporting obligations under Turkey’s foreign direct investment framework.

Certain foreign-investment information is submitted electronically through E-TUYS, a web-based system operated within the foreign investment administration.

Official investment guidance identifies electronic reporting concerning matters including:

• company activity information,
• foreign direct investment capital data, and
• share transfer information.

These obligations should not be ignored after the company has been incorporated.

Corporate maintenance is an ongoing process.

Accounting Requirements

A Turkish company must maintain statutory accounting records in accordance with Turkish legislation.

In practice, businesses generally work with a Turkish accountant or certified public accountant — Serbest Muhasebeci Mali Müşavir (SMMM).

Responsibilities can include:

• bookkeeping,
• VAT declarations,
• withholding declarations,
• payroll,
• social security reporting,
• corporate tax,
• provisional tax,
• electronic invoices,
• electronic ledgers,
• beneficial ownership reporting, and
• other statutory filings.

Foreign entrepreneurs should appoint an accountant before commercial activity becomes substantial.

Failing to file returns merely because the company had little or no business activity can still create penalties.

Can Foreigners Buy Property Through a Turkish Company?

A Turkish company may acquire real estate, but property ownership involving foreign capital can be subject to rules different from ordinary acquisitions by purely domestic companies.

The analysis can depend upon matters such as:

• the company’s foreign ownership ratio,
• the location of the property,
• the business purpose,
• strategic or military zones, and
• whether special foreign-owned-company property rules apply.

Accordingly, foreign investors should not assume that purchasing property personally and purchasing property through a Turkish foreign-capital company are governed by identical rules.

A separate property-law review may be necessary.

Can a Foreign Company Open a Branch in Turkey?

Yes.

Instead of incorporating a new Turkish subsidiary, a foreign company may establish a branch office.

A branch does not have a separate shareholding structure and is generally not legally independent from the foreign parent company.

Official investment guidance states that a Turkish branch:

• has no separate shareholder,
• is not an independent legal entity,
• operates within the purposes of the parent company, and
• does not have the same statutory capital requirement as a newly incorporated subsidiary.

A branch can be suitable for certain foreign businesses that want direct Turkish operations without creating a separate subsidiary.

However, liability, taxation, internal governance and commercial objectives should be considered carefully.

Can a Foreign Company Establish a Liaison Office?

Yes, but a liaison office is fundamentally different from an ordinary trading company.

A foreign company may obtain permission to establish a liaison office — irtibat bürosu in Turkey.

However, liaison offices are generally prohibited from conducting commercial activities that generate income in Turkey.

They are typically used for purposes such as:

• market research,
• representation,
• regional coordination,
• supplier research,
• technical support,
• communication, or
• similar non-commercial functions.

Official Turkish investment guidance states that liaison offices require authorization from the Ministry of Industry and Technology and may not engage in commercial activity in Turkey. Initial licences are generally granted for up to three years, with possible extensions depending upon the permitted activity and circumstances.

A foreign business intending to sell goods or services in Turkey should therefore not use a liaison office as a substitute for an operating company or branch.

Subsidiary, Branch or Liaison Office?

The appropriate structure depends on the commercial objective.

A subsidiary is often preferable where the investor wants:

• a separate Turkish legal entity,
• local shareholders or future investors,
• ring-fenced corporate operations,
• independent contracts,
• employees, and
• long-term commercial activity.

A branch may be appropriate where:

• the foreign parent wants direct operational presence,
• a separate Turkish shareholding structure is unnecessary, and
• the parent is prepared to remain directly connected with the branch’s obligations.

A liaison office may be suitable where:

• the objective is non-commercial representation,
• market research is being conducted, or
• the foreign company is assessing Turkey before establishing full commercial operations.

The correct structure should be selected before registration.

Shareholders’ Agreements for Foreign Investors

Where a Turkish company has more than one shareholder, a shareholders’ agreement can be extremely important.

The articles of association alone may not adequately regulate all commercial relationships.

A shareholders’ agreement can address:

• board composition,
• manager appointment,
• voting rights,
• reserved matters,
• financing obligations,
• dividend policy,
• non-compete obligations,
• confidentiality,
• intellectual property,
• share transfers,
• pre-emption rights,
• tag-along rights,
• drag-along rights,
• deadlock mechanisms,
• founder departure,
• valuation mechanisms, and
• dispute resolution.

Foreign joint ventures frequently fail because the founders begin business based on personal trust without planning what happens if they later disagree.

Corporate documentation should be designed for conflict before conflict exists.

Share Transfer Rules

Foreign investors should also consider exit from the company at the incorporation stage.

Share-transfer procedures differ between limited liability companies and joint stock companies.

A limited company share transfer can involve more formal requirements and, depending upon the constitutional structure, corporate approval mechanisms.

A joint stock company can generally offer greater flexibility for sophisticated equity transactions.

For investors expecting:

• venture capital,
• acquisitions,
• future investor rounds,
• employee equity,
• exits, or
• restructuring,

an A.Ş. may therefore deserve serious consideration from the beginning.

Intellectual Property Belongs to Whom?

Foreign founders often assume that software, trademarks, designs or technology automatically belong to the new Turkish company.

This may not be correct.

If intellectual property was created before incorporation or belongs to the foreign parent, founder or developer, appropriate arrangements may be required.

These can include:

• IP assignment agreements,
• trademark licences,
• software licences,
• technology-transfer agreements,
• employment IP clauses, and
• confidentiality agreements.

For technology companies, ownership of intellectual property may ultimately be more valuable than the company’s physical assets.

The legal structure should reflect that value.

Employing Turkish and Foreign Personnel

Once established, a Turkish company may employ Turkish personnel subject to ordinary employment and social-security laws.

Foreign personnel normally require appropriate work authorization unless a specific statutory exemption applies.

The company must therefore distinguish between:

• Turkish employment law,
• SGK obligations,
• payroll taxation, and
• immigration/work permit requirements.

Hiring a foreign employee without valid authorization can expose both the employer and employee to administrative consequences.

Personal Liability of Directors and Managers

The phrase “limited liability” should not be misunderstood.

It generally protects shareholders from ordinary corporate debts beyond their investment, but directors, managers and legal representatives can face personal liability in particular circumstances.

Potential exposure may arise from:

• breach of statutory duties,
• unlawful distributions,
• tax obligations,
• unpaid public receivables,
• social-security debts,
• fraudulent transactions,
• failure to maintain proper records,
• capital protection violations, or
• wrongful acts causing loss.

A director or manager should therefore not agree to act merely as a nominee without understanding the legal responsibilities attached to the position.

Common Mistakes Foreign Entrepreneurs Make in Turkey

1. Believing a Turkish Partner Is Mandatory

For most ordinary sectors, this is incorrect.

A foreigner can generally own 100% of the Turkish company.

2. Choosing Ltd. Şti. Only Because It Is Cheaper

The cheapest company to establish may not be the best structure for future investment, share transfers or corporate governance.

3. Confusing Share Ownership With a Work Permit

Company ownership does not automatically authorize employment.

This is particularly important where the foreign founder intends to actively work in Turkey.

4. Ignoring the Work Permit Capital Threshold

A founder may establish the company at the statutory minimum but later discover that the business does not satisfy the Ministry of Labour’s work-permit criteria.

5. Using an Inappropriate Registered Address

A temporary or artificial address can create tax, banking and notification problems.

6. Opening a Company Before Confirming Banking Feasibility

Banks apply independent KYC and compliance rules.

Foreign founders dealing with high-risk jurisdictions, complex ownership structures or unusual industries should consider banking requirements at the planning stage.

7. Giving One Partner Unlimited Signature Authority

Representation powers should be structured according to commercial risk.

8. Ignoring Taxes Until Revenue Starts

Even newly established or inactive companies can have accounting and filing obligations.

9. Failing to Register Intellectual Property

A company name, domain name and trademark are different legal concepts.

10. Establishing a Company Without an Exit Agreement

The beginning of the business relationship is the best time to determine how shareholders may eventually leave.

Practical Legal Checklist for Foreign Entrepreneurs

Before establishing a company in Turkey, an international entrepreneur should determine:

• What will the company actually do?
• Is the activity regulated?
• Is foreign ownership restricted?
• Should the company be an Ltd. Şti. or A.Ş.?
• Who will own the shares?
• Is a shareholders’ agreement necessary?
• Who will manage the company?
• Who will have bank-signing authority?
• Will the foreign shareholder physically work in Turkey?
• Does the proposed capital satisfy work permit requirements?
• What address will be used?
• How will the business open its bank account?
• What taxes apply?
• Will the company trade with foreign related parties?
• Are intellectual property agreements required?
• Are special licences necessary?
• Are foreign investment reports required?
• What happens if the shareholders disagree?

Answering these questions before incorporation can significantly reduce future legal costs.

Frequently Asked Questions About Establishing a Company in Turkey as a Foreigner

Can a foreigner establish a company in Turkey?

Yes. Foreign natural persons and foreign companies may generally establish Turkish commercial companies.

Can a company in Turkey be 100% foreign-owned?

Yes, in most ordinary sectors.

Do I need a Turkish business partner?

Generally no. Certain regulated sectors may have separate rules.

Can one foreigner establish a Turkish limited company?

Yes. Turkish law permits single-member limited companies.

Can one foreigner establish a Turkish joint stock company?

Yes. A joint stock company may also have a single shareholder.

What is the minimum capital for an LLC in Turkey in 2026?

The minimum capital for a newly established limited liability company is TRY 50,000.

What is the minimum capital for a joint stock company?

The ordinary minimum capital is TRY 250,000. A non-public A.Ş. adopting the registered capital system has a minimum initial capital of TRY 500,000.

Does the foreign investor need a residence permit to own shares?

A foreigner’s ability to own shares and the right to reside in Turkey are separate legal issues. Ownership alone does not automatically create residence status.

Does owning a company give me a work permit?

No.

Can I work in my own Turkish company?

Potentially, but the applicable Turkish work permit requirements must be satisfied.

What capital is required for a foreign shareholder’s work permit?

Under the Ministry of Labour’s current 2026 criteria for relevant businesses, the foreign shareholder generally needs at least TRY 500,000 as their capital share, the total paid-up company capital must be at least TRY 500,000 and the foreign shareholder must generally hold at least 20%.

Must the company employ Turkish citizens for the foreign shareholder’s work permit?

Under the current published criteria, the business generally needs to employ at least five Turkish citizens. For an initial permit issued to a foreign shareholder or business owner, this criterion begins from the seventh month.

Can a foreign company establish a subsidiary in Turkey?

Yes.

Can a foreign company open a branch?

Yes.

Can a foreign company open a liaison office?

Yes, with the required authorization, but a liaison office generally cannot carry out ordinary revenue-generating commercial activity.

Can a Turkish company open a corporate bank account?

Yes, subject to the bank’s KYC, compliance and onboarding procedures.

What is the corporate income tax rate in Turkey in 2026?

The standard rate for ordinary corporate taxpayers is currently 25%, although special rates and reductions can apply to specific activities.

Can I establish the company without travelling to Turkey?

In many cases, a substantial part of the process can be handled through a properly drafted and legalized power of attorney, although banking, immigration or specific operational procedures may require personal attendance depending upon the institution and circumstances.

Conclusion

Turkey generally provides a foreign-investor-friendly legal framework for company establishment.

International entrepreneurs may establish Turkish commercial companies under largely the same corporate rules that apply to Turkish investors, and in most ordinary sectors there is no requirement for a Turkish shareholder.

A foreign investor can therefore generally establish a 100% foreign-owned limited liability company or joint stock company in Turkey.

However, company registration should not be viewed in isolation.

The investor must also consider:

• corporate structure,
• capital,
• shareholder rights,
• management,
• signature authority,
• banking,
• taxation,
• work permits,
• residence status,
• foreign-investment reporting,
• accounting,
• licensing,
• intellectual property,
• employment, and
• future exit arrangements.

For small and medium-sized businesses, a limited liability company — Ltd. Şti. is often a practical option.

For investments involving multiple shareholders, institutional capital, sophisticated corporate governance or future investment rounds, an A.Ş. — joint stock company may provide a more suitable structure.

As of 2026, the statutory minimum capital is TRY 50,000 for a limited company and TRY 250,000 for an ordinary joint stock company.

But foreign founders should not confuse these incorporation thresholds with the separate requirements applicable to work permits.

A foreign company shareholder seeking Turkish work authorization may face substantially higher capital and employment criteria.

The most important principle is therefore to decide why the company is being established before deciding how it should be established.

A foreign entrepreneur who simply wants to invest may need one structure.

A foreigner who wants to relocate to Turkey and personally manage the business may require a different capital and immigration strategy.

A multinational entering the Turkish market may prefer a subsidiary or branch.

A foreign company merely researching the market may instead consider a liaison office.

Proper legal planning at the beginning can prevent expensive changes later.

For international entrepreneurs planning to establish a business in Turkey, company formation should therefore be approached as a combination of corporate law, tax law, immigration law, employment law and commercial strategy, rather than as a simple registration procedure.

Legal Disclaimer

This article provides general legal information concerning establishing and operating a company in Turkey as a foreign investor as of 2026. It does not constitute legal, tax or investment advice for any specific individual or business.

Turkish company law, minimum capital requirements, work permit criteria, tax rates, banking policies, foreign-investment reporting rules and sector-specific regulations may change.

Additional permits or foreign ownership limitations may also apply to regulated industries.

Foreign entrepreneurs should obtain transaction-specific Turkish legal and tax advice before incorporating a company, investing capital, entering into a shareholders’ agreement, hiring employees or applying for a Turkish work permit.