Introduction: Starting a Business in Turkey Is Easy—Structuring It Correctly Is More Difficult

Turkey provides a relatively open legal environment for foreign direct investment. International investors are generally subject to the principle of equal treatment and may establish the company forms available under the Turkish Commercial Code under substantially the same rules applicable to domestic investors. The official Investment Office also confirms that foreign investors may establish Turkish joint stock companies and limited liability companies without a general requirement for a Turkish shareholder.

This makes Turkey attractive to foreign entrepreneurs establishing:

• technology startups;
• software and SaaS companies;
• e-commerce businesses;
• manufacturing companies;
• consulting businesses;
• import-export operations;
• real estate investment companies;
• healthcare businesses;
• logistics companies;
• and regional subsidiaries of international corporate groups.

However, the ease of registering a company can create a dangerous misconception:

“If the company has been registered at the Trade Registry, the legal structure must be correct.”

That is not necessarily true.

A company can be legally incorporated while being badly structured for its actual commercial objectives.

For example, a foreign entrepreneur may establish a limited company with minimal capital and later discover that the structure is inconvenient for venture capital investment.

Two partners may divide ownership 50/50 without establishing any mechanism for resolving a deadlock.

A foreign shareholder may assume that owning the company automatically allows them to work in Turkey.

A foreign parent may invoice arbitrary management fees to its Turkish subsidiary without considering transfer pricing.

A software founder may assume that the company’s developers automatically transferred every intellectual property right.

A SaaS business may begin using foreign cloud and artificial intelligence services without analysing Turkey’s international personal data transfer rules.

A foreign-invested company may complete Trade Registry filings but forget separate E-TUYS reporting obligations.

In other cases, the investor may purchase an existing Turkish company because this appears faster than incorporating a new company, without conducting proper due diligence into tax debts, litigation, employee claims, guarantees or public liabilities.

These mistakes can be significantly more expensive to correct after the company starts operating.

For that reason, foreign investors should view Turkish company formation as a legal structuring project, not merely an administrative registration procedure.

This guide explains the most common legal mistakes foreign investors make when starting a business in Turkey in 2026 and how these risks can be reduced before they become disputes.

1. Choosing the Company Type Only According to the Minimum Capital

The first common mistake is selecting the company structure solely because one option is cheaper to establish.

The two most common Turkish capital companies are:

• Limited Liability Company – Limited Şirket (Ltd. Şti.)
• Joint Stock Company – Anonim Şirket (A.Ş.)

As of 2026, the statutory minimum capital is:

The Ministry of Trade confirms the TRY 50,000 and TRY 250,000 minimum capital amounts under the current framework.

A foreign entrepreneur may therefore think:

“The Ltd. Şti. requires less capital, so I should automatically choose it.”

That may be a mistake.

The appropriate company form should depend on questions such as:

• Will institutional investors enter later?
• Will there be several investment rounds?
• Will different share groups be needed?
• Will shares change hands frequently?
• Is a future acquisition or IPO possible?
• Will the company have several founders?
• Does the investor need sophisticated governance rights?
• What public-debt exposure may shareholders face?

For high-growth startups and sophisticated joint ventures, an A.Ş. may often provide greater flexibility.

For a closely held consulting or trading business with one or two owners, an Ltd. Şti. may be perfectly adequate.

The correct question is therefore not:

“Which company is cheaper?”

It is:

“Which company form supports the next five years of the business?”

2. Ignoring the Special Public-Debt Exposure of Limited Company Shareholders

Another important mistake is assuming that “limited liability” means that a shareholder can never become personally responsible for company liabilities.

For ordinary private-law company debts, the general separation between company and shareholder remains fundamental.

However, Turkish law contains an important exception concerning certain public receivables of limited companies.

Article 35 of Law No. 6183 provides that limited company shareholders may become directly liable, in proportion to their capital shares, for public receivables that cannot be fully or partially collected from the company or are understood to be uncollectible. The same article also contains special rules concerning share transfers and liability for pre-transfer public receivables.

This means a foreign investor should not simply compare:

A.Ş. vs Ltd. Şti.

by looking at incorporation costs.

Public-debt exposure may matter significantly, particularly where the investor is:

• buying an existing limited company;
• entering a company with tax or SGK history;
• acquiring shares from another shareholder;
• or becoming heavily involved in management.

For an investor purchasing an existing Ltd. Şti., tax and public-debt due diligence can therefore be particularly important.

3. Assuming That a 50/50 Shareholding Is Automatically Fair

Foreign partners often begin their Turkish business with enthusiasm and trust.

They decide:

“We will each own 50%.”

Commercial equality may make sense.

Governance paralysis does not.

Imagine two foreign founders each holding 50%.

One wants to sell the company.

The other refuses.

One wants to increase capital.

The other blocks it.

One wants to appoint a new executive.

The other disagrees.

Without an effective deadlock mechanism, a 50/50 structure can make important decisions impossible.

A well-designed shareholders’ agreement may therefore address:

• reserved matters;
• voting thresholds;
• board structure;
• escalation mechanisms;
• mediation;
• buy-sell arrangements;
• deadlock procedures;
• transfer rights;
• and exit mechanisms.

The share percentages should be designed together with governance—not in isolation.

4. Failing to Sign a Shareholders’ Agreement

The absence of a shareholders’ agreement is one of the most common legal weaknesses in foreign-owned companies.

The articles of association are essential, but they are not necessarily sufficient to regulate the entire commercial relationship among shareholders.

A shareholders’ agreement may address:

• management rights;
• board nominations;
• reserved matters;
• future financing;
• capital increases;
• dilution;
• shareholder loans;
• restrictions on transfer;
• pre-emption;
• right of first refusal;
• tag-along rights;
• drag-along rights;
• confidentiality;
• non-compete obligations;
• intellectual property;
• founder departure;
• valuation;
• deadlock;
• and dispute resolution.

Official Turkish investment guidance itself notes that shareholders’ agreements are commonly used in joint venture structures to regulate relations between participants and the operation of the joint venture.

Foreign investors should nevertheless ensure that the shareholders’ agreement and the company’s articles of association are coordinated properly.

Not every contractual arrangement automatically produces the same corporate-law effect against the company, corporate organs or third parties.

5. Giving One Person Unlimited Signature Authority Without Internal Controls

Foreign owners sometimes appoint a local manager or trusted employee and give that person extremely broad representation authority because the shareholders themselves live abroad.

This can be commercially convenient.

It can also be dangerous.

Depending on the authority granted, a representative may be able to:

• enter contracts;
• operate bank accounts;
• hire employees;
• terminate contracts;
• purchase assets;
• undertake debt;
• issue guarantees;
• interact with authorities;
• and bind the company toward third parties.

Foreign investors should establish a carefully designed representation structure.

Depending on the company and transaction, this may include:

• joint signatures;
• monetary limits;
• board approval thresholds;
• restricted banking authority;
• reserved matters;
• dual approval for significant contracts;
• and internal reporting obligations.

The key distinction is between:

external representation authority

and

internal corporate approval.

A company should not depend on trust alone where substantial assets are involved.

6. Assuming Company Ownership Automatically Gives the Foreign Shareholder a Work Permit

This is one of the most significant mistakes foreign entrepreneurs make in Turkey.

A foreigner may legally own shares in a Turkish company without automatically obtaining the right to work in Turkey.

Company ownership, residence permission and work authorisation are legally distinct matters.

As of August 2026, the Ministry of Labour’s current criteria for foreign company partners generally require, for businesses subject to balance-sheet accounting:

• company paid-up capital of at least TRY 500,000;
• the foreign partner’s own capital amount of at least TRY 500,000;
• at least 20% share ownership;
• and employment of at least five Turkish citizens beginning from the seventh month of the first work permit.

However, where the foreign partner’s capital share is at least USD 100,000, the Ministry states that these specific financial/shareholding and five-employee criteria do not apply.

Therefore:

minimum company capital ≠ work permit capital planning.

A foreign entrepreneur who establishes an Ltd. Şti. with TRY 50,000 and then expects to work as the active company manager may discover that the immigration/employment strategy was never considered.

Company formation and work-permit planning should happen together.

7. Confusing a Residence Permit With a Work Permit

A related mistake is assuming that lawful residence automatically authorises employment.

A foreign person may hold a Turkish residence permit and still require a separate work permit to work legally.

Likewise, a foreign investor may own real estate, maintain a residence card and own shares in a company while still needing work authorisation for active employment or management.

Foreign entrepreneurs should therefore define their actual role:

Passive shareholder?

Board member?

Active manager?

CEO?

Consultant?

Employee?

The immigration analysis changes according to the real activity rather than simply the title printed on a business card.

8. Using the Statutory Minimum Capital Without Considering the Company’s Real Needs

The minimum capital is a legal threshold, not a business plan.

For example, an investor establishing:

• an import business;
• a software company employing 20 engineers;
• a manufacturing operation;
• or a regulated service company

should not necessarily choose capital of TRY 50,000 merely because the law permits an Ltd. Şti. to be incorporated with that amount.

Capital can affect:

• banking;
• supplier confidence;
• work permits;
• investor perception;
• borrowing;
• balance-sheet health;
• and future financing.

Foreign investors should therefore distinguish:

legal minimum capital

from

appropriate operating capital.

There is also a time-sensitive 2026 issue for older companies.

The Ministry of Trade confirms that existing A.Ş. and Ltd. Şti. companies whose capital remains below the new statutory minimum must increase it by 31 December 2026, otherwise they are deemed dissolved under the applicable provisional provision.

This is particularly important when acquiring an older Turkish company rather than establishing a new one.

9. Forgetting E-TUYS Reporting Obligations

Foreign investors often correctly complete:

• MERSIS;
• Trade Registry;
• tax registration;
• and banking.

Then they assume foreign-investment reporting is finished.

That can be incorrect.

Companies and branches established in Turkey with foreign investment are subject to foreign-investment reporting through E-TUYS – the Electronic Incentive Application and Foreign Investment Information System.

Current official investment guidance identifies three principal electronic reporting categories:

• FDI Activity Information Form;
• FDI Capital Data Form;
• FDI Share Transfer Data Form.

The Ministry of Industry’s current E-TUYS guidance also states that the foreign-capital company’s annual activity information for the preceding calendar year must be submitted by the end of May through the relevant E-TUYS form.

This matters because foreign-owned companies frequently experience:

• capital increases;
• new foreign shareholders;
• exits;
• share transfers;
• and changes in foreign ownership percentages.

Trade Registry registration should therefore not be treated as the only reporting step.

10. Ignoring the New Electronic Commercial Book System

Foreign investors establishing companies in 2026 should also be aware of the Electronic Commercial Book System – ETDS.

The Ministry of Trade announced that companies registered from 1 January 2026 onwards must keep their:

• share ledger; and
• general assembly meeting and negotiation book

through ETDS.

The board of directors’ resolution book can remain optional under the relevant electronic regime.

This is more important than it may initially appear.

The share ledger is a fundamental corporate record.

It should accurately reflect:

• shareholders;
• share ownership;
• changes in shareholding;
• and other required information.

A foreign shareholder should not assume that an Excel spreadsheet prepared by the company’s accountant is a substitute for legally required corporate books.

Corporate governance requires formal records.

11. Registering the Wrong Business Activity or Ignoring Sector-Specific Regulation

Foreign investment is generally liberalised in Turkey, but the equal-treatment principle operates subject to special legislation.

The Foreign Direct Investment Law itself recognises that the general freedom to invest applies unless international agreements or special laws provide otherwise.

This becomes particularly important in sectors such as:

• financial services;
• payments and electronic money;
• insurance;
• healthcare;
• pharmaceuticals;
• crypto assets;
• telecommunications;
• energy;
• civil aviation;
• broadcasting;
• private education;
• and other regulated businesses.

A technology founder may describe the business as:

“We are only a software company.”

But if the product actually stores customer funds, facilitates regulated payment services, provides regulated healthcare, operates a crypto platform or performs another licensed activity, the regulatory classification may be very different.

Foreign investors should therefore analyse the actual business model, not merely the NACE code or company name.

12. Assuming a Liaison Office Can Conduct Commercial Activity

Foreign companies sometimes want the cheapest and simplest Turkish presence and therefore consider establishing a liaison office.

But a liaison office is not a substitute for a trading subsidiary or branch.

Official Turkish investment guidance states that foreign companies may open a liaison office with permission from the Ministry of Industry and Technology provided that the office does not conduct commercial activities in Turkey.

Therefore, a foreign company should not establish a liaison office and then use it to:

• issue commercial invoices;
• sell goods;
• provide revenue-generating services;
• or operate as a normal Turkish business.

The legal vehicle should match the real activity.

13. Buying an Existing Company Without Due Diligence

Purchasing a ready-made Turkish company can appear easier than incorporating a new company.

The investor receives:

• an existing tax number;
• bank relationships;
• customers;
• employees;
• licences;
• and operating history.

The problem is that the investor may also acquire the economic consequences of that history.

A share acquisition does not erase the target company’s previous liabilities.

The company remains the same legal entity after its shareholders change.

Potential hidden issues can include:

• tax debts;
• SGK debts;
• employee claims;
• unpaid overtime;
• pending lawsuits;
• enforcement proceedings;
• bank guarantees;
• shareholder loans;
• unrecorded related-party transactions;
• customer disputes;
• intellectual property deficiencies;
• and regulatory investigations.

The risk is especially important for limited companies because Law No. 6183 contains the special public-debt liability regime discussed above.

The correct sequence is:

due diligence → transaction documents → closing

not

buy shares → investigate later.

14. Believing a “Debt-Free Certificate” Eliminates All Historical Tax Risk

A current certificate showing no outstanding tax debt can be useful.

It does not necessarily prove that there are no historical tax risks.

For example:

A company may have filed its 2025 corporate tax return.

No debt is currently visible.

In 2027, a tax inspection reviews 2025 transactions and determines that deductions were improperly claimed.

A new tax assessment can arise from an earlier period.

Therefore, acquiring a company requires analysis of:

• tax returns;
• VAT;
• withholding;
• payroll;
• related-party transactions;
• unusual expenses;
• tax audits;
• incentives;
• and historical filings.

A buyer should distinguish:

currently unpaid assessed tax

from

latent tax exposure that has not yet been assessed.

15. Treating the Turkish Company as the Shareholder’s Personal Bank Account

Another serious mistake is using company funds for personal expenses without appropriate accounting and legal treatment.

Examples may include:

• shareholder holidays;
• personal car expenses;
• personal property purchases;
• private school fees;
• unexplained cash withdrawals;
• family expenses;
• or transfers to related individuals.

A shareholder may think:

“I own 100% of the company, so the company’s money is my money.”

Legally, that is incorrect.

The company is a separate legal person.

Payments to shareholders should have a legitimate legal and accounting basis, such as:

• salary;
• dividend;
• documented expense reimbursement;
• loan;
• or another lawful transaction.

Unexplained related-party payments can create:

• tax risk;
• accounting issues;
• corporate governance problems;
• and disputes with future investors.

16. Ignoring Transfer Pricing in Transactions With the Foreign Parent

International groups frequently establish a Turkish subsidiary and then immediately enter intercompany arrangements.

The Turkish company may pay the foreign parent for:

• management services;
• consulting;
• software;
• trademarks;
• licences;
• technical support;
• shareholder loans;
• or procurement.

These arrangements are not automatically deductible simply because an invoice exists.

Under Article 13 of the Turkish Corporate Tax Law, transactions with related parties must comply with the arm’s-length principle. Where related-party goods or services are priced contrary to that principle, profits can be treated as distributed through transfer pricing.

Foreign investors should be prepared to explain:

• what service was actually provided;
• who provided it;
• what commercial benefit the Turkish company received;
• how the price was calculated;
• and whether an unrelated company would accept similar terms.

A foreign parent should not simply decide:

“The Turkish company has TRY 30 million profit, so we will issue a TRY 25 million management invoice.”

That can create substantial tax exposure.

17. Looking Only at the Corporate Tax Rate

The general corporate income tax rate for ordinary Turkish corporate taxpayers is 25% in 2026. Specified financial and certain regulated businesses are subject to a higher 30% rate, while qualifying export and manufacturing income can benefit from reduced rates under the applicable rules.

But an investor should not build a Turkish business plan around one number.

The total tax framework may also involve:

• VAT;
• withholding;
• payroll taxes;
• dividend withholding;
• stamp tax;
• customs;
• transfer pricing;
• related-party financing;
• and incentive rules.

For an international investor, the relevant question is not:

“What is Turkey’s corporate tax rate?”

It is:

“What is the effective tax cost of our entire Turkish operating and repatriation structure?”

This should include how profits will eventually be transferred abroad.

18. Failing to Transfer Intellectual Property to the Company

This is particularly common with technology startups.

A founder may develop:

• software;
• a mobile application;
• source code;
• a trademark;
• a database;
• designs;
• or an AI model

before the Turkish company exists.

The company is then established and uses those assets commercially.

No formal transfer takes place.

Years later, a VC fund conducts due diligence and asks:

“Who owns the core software?”

The answer is unclear.

The same problem arises with freelancers.

Paying a developer does not necessarily eliminate the need for a proper IP agreement.

Foreign-owned technology companies should create a clean chain of title covering:

• founder-developed IP;
• employee-created works;
• contractor development;
• third-party licences;
• open-source code;
• trademarks;
• domains;
• patents;
• and databases.

The company should legally control the assets upon which its valuation depends.

19. Using Foreign Contracts Without Adapting Them to Turkish Law

Foreign investors often arrive with:

• UK employment agreements;
• US SaaS contracts;
• UAE distributor agreements;
• Delaware shareholder documents;
• or German supplier templates.

International templates can be excellent starting points.

They are not automatically compliant with Turkish mandatory law.

A foreign document may conflict with:

• Turkish employment rules;
• consumer law;
• data protection;
• commercial agency rules;
• mandatory company procedures;
• tax;
• competition law;
• or procedural requirements.

For example, importing US venture-capital concepts such as:

• SAFE;
• automatic share conversion;
• founder reverse vesting;
• liquidation preferences;
• or option structures

requires Turkish-law adaptation if a Turkish company is involved.

The commercial idea may be valid.

The legal mechanism must work under Turkish law.

20. Ignoring KVKK Because the Company Is “Small”

The Turkish Personal Data Protection Law – KVKK – applies according to data-processing activities, not simply company valuation.

A newly established business may process:

• customer names;
• phone numbers;
• e-mail addresses;
• employee records;
• payment information;
• IP addresses;
• location data;
• CCTV;
• customer communications;
• health information;
• or other personal data.

Legal obligations may involve:

• lawful processing grounds;
• privacy notices;
• security;
• retention;
• processor arrangements;
• data-subject requests;
• deletion/destruction;
• VERBİS analysis;
• and international data transfers.

The mistake is often postponing KVKK until the company becomes “big.”

By then, the company’s systems, suppliers and data architecture may already be difficult to correct.

21. Assuming Data Is Not Transferred Abroad Because the Main Server Is in Turkey

This is an increasingly common mistake for foreign-backed companies.

A company may host its main database in Istanbul while using:

• AWS;
• Google Cloud;
• Microsoft;
• Salesforce;
• HubSpot;
• overseas CRM tools;
• international analytics;
• AI APIs;
• global HR platforms;
• or foreign customer-support providers.

Personal data sent to a foreign provider can trigger international transfer rules even where the original database remains in Turkey.

KVKK Article 9 was substantially revised in 2024, and the current regime recognises mechanisms including standard contracts and binding corporate rules as appropriate safeguards in qualifying circumstances.

A foreign investor should therefore ask:

“Where does the data travel?”

rather than merely:

“Where is our primary server?”

22. Letting the Accountant Handle Every Legal Issue

A competent accountant or financial adviser is essential to operating in Turkey.

But tax and accounting advice is not a substitute for corporate legal structuring.

Similarly, a lawyer is not a substitute for an accountant.

Foreign investors sometimes give one professional responsibility for:

• incorporation;
• employment;
• tax;
• shareholder agreements;
• immigration;
• IP;
• KVKK;
• regulatory licences;
• litigation;
• and financing.

These disciplines overlap but are not identical.

A well-structured investment often requires coordination among:

corporate counsel + tax adviser/accountant + employment/work permit adviser + sector specialists where necessary.

The objective is not to create unnecessary advisers.

It is to ensure that a tax-efficient decision does not create a corporate or immigration problem elsewhere.

23. Hiring Employees Without Proper Written Documentation

Foreign-owned businesses sometimes start operating quickly and postpone employment documentation.

This creates risk concerning:

• duties;
• salary;
• bonuses;
• confidentiality;
• intellectual property;
• overtime;
• remote work;
• company equipment;
• expense policies;
• non-compete obligations;
• and termination.

This becomes especially problematic for technology businesses where employees create valuable code or confidential materials.

The investor should establish HR documentation before the company begins scaling.

24. Calling Employees “Freelancers” to Avoid Payroll Costs

A contract heading does not necessarily determine the true nature of a relationship.

If a person:

• works continuously for one company;
• follows company instructions;
• works within its organisation;
• uses its systems;
• performs under managerial control;
• and is economically dependent on the business,

calling the person an “independent consultant” may not eliminate employment and social-security risk.

Misclassification can create historical exposure relating to:

• SGK;
• wages;
• overtime;
• annual leave;
• severance;
• and termination rights.

Foreign investors should design contractor arrangements according to actual working conditions rather than tax convenience alone.

25. Failing to Protect the Company Against Founder or Key Employee Departure

A business can become dependent on one person.

That person may control:

• source code;
• supplier relationships;
• key customers;
• bank access;
• domain names;
• passwords;
• or technical infrastructure.

If that individual leaves, the company may discover that critical commercial assets were never institutionalised.

Foreign investors should ensure that:

• domains belong to the company;
• repositories are company-controlled;
• key credentials are secured;
• IP is documented;
• customer contracts are signed by the company;
• and no individual privately controls essential business assets.

Corporate value should reside in the company—not in an employee’s personal email account.

26. Failing to Design the Exit at the Beginning

Foreign investors often focus only on entering Turkey.

But a successful investment eventually creates an exit question.

A shareholders’ agreement should consider what happens if:

• a shareholder wants to sell;
• another shareholder receives an offer;
• a strategic buyer wants 100%;
• a founder dies;
• a shareholder becomes insolvent;
• the parties disagree;
• or the company raises another funding round.

Mechanisms such as:

pre-emption, ROFR, tag-along, drag-along, lock-up, call/put arrangements and valuation mechanisms

can materially affect the ability to exit.

Negotiating those rules after a dispute begins is significantly more difficult.

27. Not Maintaining a Corporate Data Room

Foreign shareholders often manage the Turkish company remotely.

Documents may become scattered across:

• accountant emails;
• employee laptops;
• WhatsApp;
• directors’ personal files;
• and cloud folders.

This becomes a major problem when:

• a bank requests KYC;
• an investor conducts due diligence;
• a company is sold;
• a regulator investigates;
• or shareholders begin disputing ownership.

A corporate data room should generally maintain organised records concerning:

• articles;
• Trade Registry filings;
• share records;
• board/general assembly decisions;
• shareholder agreements;
• powers of attorney;
• employment;
• IP;
• tax;
• licences;
• contracts;
• insurance;
• KVKK;
• litigation;
• financing;
• and guarantees.

Good corporate housekeeping has direct economic value.

28. Ignoring the Language and Authenticity Requirements for Foreign Documents

Foreign corporate shareholders often lose time because documents prepared abroad do not satisfy Turkish formal requirements.

Official investment guidance confirms that foreign corporate shareholders may need documents such as certificates of activity and corporate resolutions, and that qualifying foreign-issued documents generally require notarisation and apostille or Turkish consular authentication together with official Turkish translation and notarisation.

Foreign investors should therefore check document formalities before:

• board meetings abroad;
• investment closings;
• share transfers;
• director appointments;
• and powers of attorney.

Discovering that a corporate resolution is unusable on the closing date can delay the entire transaction.

29. Assuming Every Business Can Operate From a Virtual Address Without Consequences

A registered address is part of company formation and tax administration.

Certain businesses can operate efficiently with flexible office structures.

Others may require:

• operational premises;
• licences;
• technical facilities;
• warehouse space;
• healthcare premises;
• production facilities;
• or regulatory approval tied to a location.

The registered office should therefore fit the company’s genuine activities.

An investor should not choose an address only because it is the cheapest available service.

30. Starting Operations Before Building a Compliance Calendar

A foreign-owned company may simultaneously face deadlines concerning:

• tax;
• VAT;
• payroll;
• SGK;
• Trade Registry;
• corporate meetings;
• E-TUYS;
• work permits;
• licences;
• electronic books;
• contracts;
• KVKK;
• and insurance.

The business should therefore build a compliance calendar immediately after incorporation.

This is particularly important where shareholders live abroad.

No one should assume:

“Our accountant will remind us about everything.”

Responsibility should be formally allocated.

A Practical Pre-Incorporation Checklist for Foreign Investors

Before establishing or acquiring a Turkish business, a foreign investor should ideally answer the following questions:

1. Should we establish an A.Ş. or Ltd. Şti.?
2. Is the proposed capital commercially sufficient?
3. Does our work permit strategy require higher capital?
4. Are any activities regulated?
5. Do we need licences before trading?
6. Who will own the shares?
7. What happens if shareholders disagree?
8. Is a shareholders’ agreement required?
9. Who will manage the company?
10. Who will have signature authority?
11. What banking authority will managers hold?
12. Who owns existing intellectual property?
13. Will founders transfer IP to the Turkish company?
14. Are employees or freelancers creating IP?
15. Will the Turkish company transact with foreign affiliates?
16. Have transfer pricing rules been analysed?
17. Will the company use foreign cloud or AI services?
18. What personal data will be transferred abroad?
19. Is E-TUYS reporting applicable?
20. What ETDS obligations apply?
21. Is a work permit required for foreign managers?
22. Are foreign shareholder documents apostilled/legalised correctly?
23. If buying an existing company, has legal/tax due diligence been completed?
24. Are historical tax and SGK risks understood?
25. Is there an exit plan?

If several answers are unknown, the investment structure is probably not ready.

Frequently Asked Questions

Can a foreigner own 100% of a Turkish company?

Generally yes. Turkey’s foreign investment framework is based on equal treatment, and there is no general requirement to have a Turkish shareholder except where special sector legislation provides otherwise.

What is the minimum capital for an Ltd. Şti.?

TRY 50,000 under the current rules.

What is the minimum capital for an A.Ş.?

TRY 250,000 for an ordinary joint stock company.

Is an Ltd. Şti. always better for a new foreign investor?

No. The appropriate structure depends on investment plans, governance, future investors, share transfers and liability considerations.

Can a foreign company shareholder be personally liable for Turkish company debts?

Ordinary company liability depends on the corporate form and specific circumstances. In particular, limited company shareholders can face special statutory liability for certain uncollectible public receivables under Article 35 of Law No. 6183.

Does owning a Turkish company give a work permit?

No. Share ownership and work authorisation are separate.

What are the current work permit criteria for a foreign company shareholder?

The ordinary current framework generally requires TRY 500,000 company paid-up capital, at least TRY 500,000 participation by the foreign shareholder, at least 20% ownership and five Turkish employees from the seventh month of the first permit. The specific criteria do not apply where the foreign partner’s capital share is at least USD 100,000.

What is E-TUYS?

E-TUYS is the electronic foreign-investment information system used for reporting matters including FDI activity, capital and share transfers.

Does a newly established company in 2026 have electronic commercial book obligations?

Yes. Companies registered from 1 January 2026 are required to keep the share ledger and general assembly meeting/negotiation book in ETDS.

What is Turkey’s corporate income tax rate in 2026?

The ordinary corporate income tax rate is 25%, with different rates applying to certain sectors and qualifying income categories.

Do transfer pricing rules apply to foreign-owned companies?

Yes. Related-party transactions must comply with the arm’s-length principle.

Does KVKK apply to a foreign-owned Turkish company?

Yes, where the Turkish business processes personal data falling within the law.

Can a Turkish company send customer data to foreign cloud providers?

Potentially, but Turkey’s international transfer requirements under KVKK Article 9 must be satisfied. The current framework includes safeguards such as standard contracts and binding corporate rules.

Can a liaison office sell goods or services in Turkey?

A liaison office is permitted on the condition that it does not conduct commercial activity.

Conclusion: How Can Foreign Investors Avoid Legal Problems When Starting a Business in Turkey?

Turkey offers foreign investors a relatively open corporate environment.

International investors may generally establish Turkish companies under the same broad corporate framework applicable to domestic investors, and ordinary businesses do not generally require a Turkish shareholder merely because their owners are foreign.

But the biggest legal risks usually arise after the investor decides that incorporation itself is the only important step.

The first major decision should be the corporate form.

An Ltd. Şti. may be efficient for a closely held business, while an A.Ş. may be better suited to sophisticated investors, repeated funding rounds and more complex share structures.

Foreign investors should also understand the different liability profiles. In particular, limited company shareholders can face statutory exposure for qualifying public debts that cannot be collected from the company.

The second major issue is governance.

Share percentages, director appointments and signature rights should never be decided casually.

A 50/50 partnership should include a deadlock strategy.

A minority shareholder investing substantial capital should understand what decisions can be made without consent.

A local manager should not receive unlimited authority simply because the foreign investor is not physically present in Turkey.

A shareholders’ agreement should be prepared before relations deteriorate, not after.

The third major issue is immigration.

A foreign shareholder must distinguish:

company ownership → residence → work authorisation.

These are different legal concepts.

Current work-permit rules can require substantially more capital than the statutory minimum capital required merely to form a company.

Therefore, a foreign founder who intends to work actively in Turkey should plan the work permit before the company’s initial capital and shareholder percentages are finalised.

The fourth major issue is regulatory compliance.

Foreign investment freedom does not override sector-specific legislation.

A foreign investor should determine whether the business requires approval from a regulator before trading.

This is particularly important in fintech, crypto, healthcare, energy, telecommunications, insurance and other regulated industries.

The fifth issue is foreign-investment reporting.

E-TUYS requires electronic reporting of foreign-investment activity, capital and share transfers.

Newly incorporated companies in 2026 should also be aware that their share ledger and general assembly meeting and negotiation book are now maintained through the ETDS electronic system.

The sixth major issue is tax.

Turkey’s ordinary corporate income tax rate is 25% in 2026, but international investors should not plan around this rate alone.

The group must analyse:

• VAT;
• withholding;
• dividend repatriation;
• shareholder loans;
• transfer pricing;
• related-party services;
• payroll;
• and double taxation treaties.

Related-party transactions are particularly important.

A foreign parent cannot simply move Turkish profits abroad through arbitrary management fees, royalties or interest.

Transactions must satisfy the arm’s-length principle and should be commercially documented.

The seventh issue is intellectual property.

If the company is a software or technology business, founders should determine who legally owns the software before seeking investors.

The Turkish company should not become commercially dependent on intellectual property that remains personally owned by a founder or undocumented freelancer.

The eighth issue is data protection.

Foreign-owned companies frequently use international technology infrastructure.

A Turkish company may create an international data transfer merely through its CRM, cloud provider, analytics system or generative AI API.

Turkey’s revised KVKK Article 9 regime should therefore be considered when foreign service providers receive personal data.

Finally, foreign investors buying an existing company should not confuse speed with safety.

An existing company comes with history.

That history can include:

tax + SGK + employees + litigation + bank guarantees + public debts + contracts + data protection + regulatory risk.

A share purchase should therefore follow due diligence rather than precede it.

The most effective sequence for starting a foreign-owned business in Turkey can be summarised as:

business model → regulatory analysis → company type → shareholder structure → shareholders’ agreement → capital planning → management and signature authority → work permit strategy → company formation → E-TUYS/ETDS compliance → tax and accounting structure → employment → IP → KVKK → commercial contracts → ongoing compliance → exit planning.

Foreign investors should therefore avoid asking only:

“How quickly can we establish the company?”

The more valuable question is:

“How should we structure the Turkish company today so that it does not create avoidable legal, tax, immigration or shareholder problems tomorrow?”

In many cases, the company that is cheapest and fastest to incorporate is not the company that is easiest to manage, finance, sell or defend later.

The strongest Turkish investment structure is one designed not merely to exist legally on the date of incorporation, but to remain legally scalable as the business grows.

This article reflects Turkish corporate, foreign-investment, employment, tax and data-protection legislation and publicly available official guidance as of August 2026. It is intended for general informational purposes only and does not constitute transaction-specific legal, tax, accounting, immigration or investment advice. Every foreign investment should be reviewed according to the company’s sector, ownership, management structure, intended activities, funding model and long-term objectives.