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Company EstablishmentCompany Formation in Turkey

Company Formation in Turkey offers a myriad of opportunities for investors seeking to establish a business presence. Offering a robust economy, Turkey is a thriving hub for trade and commerce. This guide aims to provide a comprehensive understanding of the company formation process in Turkey, from choosing the right business structure to the legal and administrative requirements involved.

Company Formation in Turkey

Before embarking on the journey of company formation, it is imperative to understand the legal framework governing this process in Turkey. The primary laws regulating company formation in turkey include the Turkish Commercial Code and the Turkish Code of Obligations, which detail the rules for company formation, contracts, liabilities, and labor issues.

Foreign investors have the same rights and liabilities as local investors according to the Turkish Direct Foreign Investment regulation’s equal treatment principle. Therefore, foreign investors can incorporate or participate in all types of companies in Turkey, which are available for Turkish investors.

Step-by-Step Company Establishment

Choosing the Right Legal Structure for Your Company

Choosing the right legal structure is crucial for setting up a successful business venture. Turkey offers multiple business structures, each with its advantages and disadvantages. Some of the common business structures in Turkey include:

  1. Sole Proprietorship: This is the most straightforward form of business, owned and operated by a single individual responsible for all debts and liabilities incurred by the business.

  2. Limited Liability Company (LLC): This is a popular choice for small to medium-sized businesses. It provides limited liability protection for shareholders and requires a minimum capital of 10,000 TRY. An LLC can be established with a single shareholder.

  3. Joint-Stock Company (JSC): Suitable for larger businesses planning to raise capital through the stock market, a JSC requires a minimum capital of 50,000 TRY. This company type must have at least one shareholder and a mandatory board of directors.

  4. Branch & Representation Office of Foreign Companies: Foreign companies can also open branches or liaison offices in Turkey. These offices operate as an extension of the parent company and are subject to the same regulations and liabilities.

Determining Your Company’s Trade Name

One of the initial steps in company formation in turkey is deciding on a unique trade name. The name should accurately represent your business and comply with naming rules set by the regulation. The reservation of the name can be done online through the Central Registration System (MERSIS) or in person at the Trade Registry Office.

Preparing the Necessary Documents

The next step involves preparing the necessary documents for registering a company formation in Turkey. Depending on the business structure you choose, this may include the Articles of Association, notarized signatory circular, passport copies of shareholders and authorized representatives, and proof of capital amount.

Opening a Bank Account for Your Company

Opening a bank account for your company is a crucial step. This account will be used for various financial transactions, including paying taxes, employee salaries, and managing business expenses.

Registering Your Company

Once you have all the necessary documents in place, you can submit your application for company registration. This involves completing an application form, attaching the required documents, and paying the registration fees. Once your application is approved, your company formation in turkey will be legally completed.

Obtaining Business Licenses and Permits

Depending on the nature of your business, you may need to obtain specific licenses and permits from industry-specific regulatory authorities. Make sure to research and understand these regulations to operate legally and avoid penalties.

Registering with Tax Authorities

After the company is registered, you must obtain a tax number for taxation purposes. This number is crucial for various tax-related obligations, such as filing tax returns and issuing invoices.

Ensuring Compliance with Labor Laws

If you plan on hiring employees, it’s essential to comply with Turkish labor laws. These laws govern aspects like employment contracts, working hours, and employee benefits.

Understanding the Role of Shareholders in a Company

The owners of a company are shareholders. These individuals or businesses hold rights and obligations within the company. The extent of their rights within the company depends on the size of their contribution.

Frequently Asked Questions (FAQs)

1. Can a foreigner open a company in Turkey?

Yes. Foreigners have equal rights to open companies, just as nationals. Turkey welcomes foreign investments in various business fields.

2. How long does it take to establish a new business in Turkey?

If all the documents are in order, a business can be incorporated within a week.

3. Does the company need to have an office in Turkey?

Yes. A registered office is necessary for a newly incorporated company in Turkey.

4. What are the tax obligations for companies in Turkey?

The corporate tax in Turkey is 20%, but lower rates can apply. A payroll tax, real property tax, social security tax, and other taxes also apply.

5. What are the reasons to invest in Turkey?

A good location between two important markets, its own large domestic market, a good economy, an open investment climate, and good infrastructure are important reasons why investors should choose to open a company in Turkey.

Conclusion

Establishing a company in Turkey might seem daunting due to the numerous legal and administrative requirements. However, with the right guidance and support, the process can be smooth and hassle-free. Our team of English-speaking lawyers in Istanbul at Istanbul Law Office can assist you in navigating the complexities of company formation in Turkey.

With our extensive experience, we ensure a seamless process for your company formation, allowing you to focus on growing your business. Do not hesitate to contact us for any further assistance regarding company formation in Turkey.