Launching business in Turkey: a brief overview of everything foreign investors should know
14 April, 2025
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Businesses looking for a jurisdiction with flexible conditions for company registration and accessible banking system are increasingly turning their attention to Turkey. Today this country offers favorable conditions for doing business, combining transparent procedures, loyal attitude towards foreign business owners and advantageous financial instruments, in particular for international companies.
Advantages of launching business in Turkey
The country’s openness to foreign investors.
Turkey does not restrict nationality of company owners or directors and adheres to policy of equal rights for foreign investments. This means that foreign investors enjoy the same rights and benefits as local entrepreneurs and have the same obligations.
Registration and banking services without personal presence.
After update of the Turkish Commercial Code in 2012, the company registration procedure was significantly simplified, while significant share of the processes is carried out in electronic format. Currently, one can open a bank account and register a company remotely by issuing power of attorney in the name of duly authorized representative, which is a significant advantage for non-residents.
Principal business forms for foreign owners.
Foreign natural persons and legal entities can open any companies in Turkey provided by the Commercial Code. Most foreign business entities in Turkey operate in the form of joint-stock companies – Anonim Şirket (AS) and limited liability companies – Limited Şirket (Ltd., LS).
Limited Liability Company:
- Minimum authorized capital: 50,000 Turkish liras (equal to ca. 1,500 USD)
- Can be incorporated by a sole shareholder – either natural person or a legal entity.
- Director of the company can be a foreign natural person or legal entity.
- The best option for small and medium business.
Joint Stock Company:
- Minimum authorized capital: 250,000 Turkish liras (equal to ca. 8,500 USD).
- Can be incorporated by a sole shareholder.
- More often used for large business.
Company registration in Turkey
The procedure for company registration in Turkey involves the following steps:
1. Drafting constituent documents – Memorandum of Association and Articles of Association. They should contain such standard elements as name, legal address, activities, company’s liabilities, authorized capital, information about shareholders, board members. 2. Registration of the company in the Central Trade Registry System (MERSIS e-system) – to be carried out online. The founder shall fill in electronic application indicating the company name, legal address in Turkey, as well as constituent documents in Turkish and send them for registration. The system shall assign a temporary company identification number, which can be used when opening a corporate bank account.
3. Registration in the Commercial Registry – all documents and application for registration shall also be submitted online. Key requirement for registration is payment of at least ¼ of the required authorized capital.
4. Registration at the tax service followed by obtaining a taxpayer identification number (Tax number), VAT number (Value Added Tax number).
The company should obtain tax numbers for foreign shareholders/members and directors from local tax authorities. Such numbers are required for opening a bank account for the purpose of contributing capital of the company to be registered.
5. Registration at the social security system (Turkish Social Security Institution (SGK)).
All procedures for business registration in Turkey shall be carried out remotely based on a power of attorney and do not require personal presence of the applicant, which greatly simplifies the task for foreign owners.
Upon completion of registration at the Trade Registry, both the tax authority and social security authorities shall be duly notified of the company registration automatically.
Also, the Commercial Registry staff places a publication in the Commercial Registry Gazette about the company registration within 10 days.
Opening bank account
Bank account is a mandatory condition for company registration in Turkey.
Turkish legislation does not prescribe legal restrictions on opening accounts for foreign companies, however, such clients should be ready for close attention from banking institutions.
Turkish banks carefully examine their clients in the framework within the Know Your Client (KYC) policy and pay special attention to compliance of the company and its owners with financial monitoring regulations. Compliance departments, in particular, verify shareholders and directors of companies, analyze their financial history, previous business activity, on sanctions and other risks. Compliance checks can be long-term and detailed.
Conditions for hiring foreign employees
If a Turkish company hires foreign employees, they should obtain a work permit. A foreigner who incorporates a company and becomes its director shall also be deemed as an employee and should obtain such a permit.
Other conditions for obtaining work permits include, inter alia, a special quota for Turkish workers: for each foreigner employed, the company is obliged to hire five Turkish citizens who have social insurance.
Taxation and reporting
Foreign entrepreneurs may incorporate both joint-stock companies and limited liability companies in Turkey. Such companies shall be subject to taxation on profits earned both in Turkey and abroad.
Principal taxes in Turkey include the following:
- Personal income tax: from 15% to 35% of annual income.
- Corporate tax: 20% of net profit of a legal entity.
- Dividend income tax: 15% of the amount of such income.
- VAT: 1%, 8% or 18% depending on the category of goods or services.
- Special consumption tax (SCT) for certain groups of goods (such as petroleum products, natural gas, lubricants): payable once.
- Banking and insurance tax: levied on income received by the relevant institutions, such as interest on loans.
- Stamp duty: levied as a percentage of cost of the document in the process of its notarization.
- Taxes on property (real estate, land), vehicles, inheritance and gift.
In accordance with Turkish tax legislation, companies are obliged to keep accounting records and declare income correctly. Tax returns should be filed on a monthly basis, while corporate tax returns should be filed once a year.
Turkish tax authorities actively use digital systems and artificial intelligence to monitor business operations. If a company’s income increases sharply compared to previous years, the system may schedule an audit. However, provided that accounting is kept correctly and declarations are submitted in due time, tax authorities remain loyal to business.
Due to its flexibility, simple procedures, developed financial infrastructure and favorable investment climate, today Turkey is a promising choice for entrepreneurs seeking to relocate or to expand their business.
If you are planning to open a company in Turkey and want to receive personal advice on choosing a business form, its taxation and other legal aspects, please do not hesitate to contact Interlegal lawyers. Our experts will select a reliable bank for you, facilitate compliance checks and opening bank account, draw up all necessary documents and guide you through each stage of company registration with local authorities and institutions.
Due to longstanding experience in Turkish jurisdiction and solid cooperation with local partners who carry out the necessary legal actions on-site, Interlegal guarantees maximum speed, accuracy and efficiency in resolving all your issues and a successful start to your business. Interlegal is a reliable guide for those who seek to achieve success in Turkey!
