COMPANY TYPES IN TÜRKİYE

Limited liability company and joint stock company are the most preferred among the five different types of companies in the Turkish Commercial Code.

Joint stock companies and limited liability companies constitute approximately 95% of all companies in Türkiye.

82% of these are limited liability companies and

13% are joint stock companies.


1- ABOUT THE JOINT STOCK COMPANY (JSC)

-It is established with at least one shareholder,

-The shareholder or all of the owners can be foreign persons,

-Minimum Capital must be 250 Thousand Turkish Lira,

-There is no upper limit on capital.

-There must be at least one member of the board of directors,

-The member or members of the board of directors can be foreign persons,

-Professional general manager can be appointed,

-Stock can be printed,

-Sales gains after holding the shares for two years are not taxable.

-All company establishment processes take approximately 7 business days to complete.

-After the establishment of the company, the process of opening an account in the bank is started.

-You can contact us for other questions regarding the joint stock company to be established in Turkey.

1- In Türkiye, how many shareholders can Joint Stock Company be established with?

One shareholder is sufficient for the establishment of a joint stock company in Türkiye.

2- Is there an upper limit on the number of shareholders of the Joint Stock Company?”

There is no upper limit on the number of shareholders of a joint stock company to be established in Türkiye.

3- Is it obligatory for the shareholders to be Turkish citizens?

No. The shareholder or shareholders do not have to be Turkish citizens. All shareholders can be foreign persons.

4- Can a shareholder be a legal person?

Yes. Shareholder(s) can be foreign persons. For example, a limited liability company or joint stock company abroad can be a legal person shareholder of a limited or joint stock company to be established in Türkiye.

There is no obligation to have a Turkish citizen shareholder in a company to be established in Türkiye.

5- Can the authorized signatory of the company be a foreign natural or legal person?

Yes. Joint stock company’s authorized signatory (member of the Board of Directors) can be a real or legal person established in Türkiye or a foreign person.

In case the legal person is elected to the board of directors of the company in Türkiye, he/she must choose a real person who will sign on behalf of the foreign legal person. This real person can also be a Turkish citizen or a foreign person.

6- Can the title of the company be chosen freely?

Yes, any title can be used. At least one industry name must be included in the title.

Before the establishment, it is inquired whether there is a similar title or not.

In the title, “Turkish, Türkiye, Republic, National” statements are not used in order that they depends on the approval of the Council of Ministers.

7- Can the company’s logo and trademark be registered?

Yes. Logo and trademark registration can be made after the establishment of the company.

8- Can the company operate in more than one sector?

Yes, it is possible. Provided that it is stated in the Articles of Association of the company, it is possible to operate in more than one sector.

9- What is the required capital amount for JSC?

The minimum capital required for an JSC to be established in Türkiye is 50 Thousand TL. 25% of this amount should be blocked to the bank at the time of establishment. After the establishment approval, the bank blockage will be released, and the money can be used. The remaining 3/4 of capital commitment is deposited into the company’s bank account by the shareholders within 2 years following the establishment and can be freely used for company activities.

10- What is the term of office of the Board of Directors of the Joint Stock Company?

The governing body of joint stock companies in Türkiye is the Board of Directors. The term of office of the Board of Directors can be determined as 3 years at the most. At the end of 3 years, the same people can be re-elected for 3 years.

11- Does the company have to have an address?

Yes. The company must have a legal postal address. Addressing, answering coming calls and mail/cargo delivery and forwarding can be purchased as services from virtual office companies.

12- How long does it take to establish a joint stock company in Türkiye?

After obtaining the documents required for the establishment, the establishment of a company with foreign capital is completed within approximately 5 to 7 working days.

13- Where is the registry of companies in Türkiye made?

In Türkiye, companies register with the chamber of commerce, trade registry directorate, tax office and social security institution in the city to which their address is affiliated.

14- How to open bank accounts for companies?

After the establishment of the company, the establishment documents are given to the bank and the bank account opening processes begin. A bank account can be opened within 1 to 5 business days. Banks can request additional information about foreign company shareholders during account opening.

15- How are sales invoices issued?

Invoices are created electronically through the software of integrator software companies authorized by the Turkish Revenue Administration and sent to customers electronically.

E-Invoices of customers located abroad are sent via e-mail.

16- Which declarations are given in Türkiye and when?

-VAT declaration: Monthly

– Withholding declaration: Monthly

-Corporations Provisional Tax Return: 3 Months

-Corporate Tax Declaration: Annually

-Stamp Duty declaration: As the contract is

-Social Security Notice: Monthly

17- Who is responsible for public debts?

Responsibility for public debts in joint stock companies is on the board of directors.

Shareholders who are not from the board of directors are not liable for public debts.

Liability for commercial debts is as much as the company’s assets. As long as there are no misleading and fraudulent transactions, individuals and institutions with whom commercial relations are made can only go to the assets of the company for their receivables. They cannot go to the Board of Directors or company shareholders.

18- Do share certificate have to be printed?

Joint Stock Companies in Türkiye are not obliged to issue share certificate. However, optionally, the share certificate can be printed. Share certificate can be printed by name or bearer.

In order for the share certificate to be issued, the subscribed capital must be fully paid.

19- Is the income from the sale of share certificate taxable?

The profit to be obtained from the sale of shares after 2 years have passed from the issuance of the shares is exempt from income tax for the shareholder selling the share.

Earnings from sales made within 2 years are subject to tax.

20- How to sell share certificate?

Share sales are made through a share transfer agreement to be drawn up between the shareholders. The sales transaction is reported to the board of directors of the joint stock company, and then the shareholders are recorded in the share book.

Joint stock company shares in Türkiye can be sold optionally through a notary public.

21- What are the tax rates in Türkiye?

Some tax rates in Türkiye:

-Corporate Tax rate is applied as 25% for 2022 and 2023.

Income, expense and profit/loss calculations are made quarterly and as follows.

Income-expense calculation and declaration periods;

1st Quarter: January-March period statement; Until May 17,

Quarter 2: April-June statement; Until August 17,

3rd Quarter: July-September period declaration until 17 November,

4th Quarter: October-December period declaration, until April 30 of the following year,

It is declared and if there is a profit, 25 Corporate Tax is paid. If the period resulted in a loss, no tax is payable.

– The profit distribution withholding rate is 10%.

If the profit remaining after the corporate tax is paid is desired to be distributed to the shareholders in whole or in part, 10% profit distribution withholding tax is paid over the dividend to be distributed.

-The general VAT rate is 20%.

VAT Declaration is submitted monthly.

22- How long does it take to close the company in Türkiye?

– In case the joint stock company is to be closed, liquidation procedures must be carried out.

The liquidation entry process is approximately 1 month, the liquidation period is 3 months, and the final closing process takes 1 month. All liquidation procedures are completed within 5 months.

At least one liquidation manager must be appointed for liquidation.

If only one liquidation manager is appointed, he/she must be a Turkish citizen.

If more than one liquidation manager is appointed, it is sufficient for one of them to be a Turkish citizen.

 


B) ABOUT THE LIMITED LIABILITY COMPANY

-It is established with at least one shareholder,

-The maximum number of shareholders can be 50 people.

-The shareholder or all of the owners can be foreign persons,

-Minimum Capital must be 50 Thousand Turkish Lira,

-There is no upper limit on capital.

-Must have at least one manager

-Company director or managers can be foreign persons,

-A professional manager can be appointed also,

-Stock can be printed,

-All company establishment processes take approximately 7 business days to complete.

-After the establishment of the company, the process of opening an account in the bank is started.

-You can contact us for your other questions about the limited liability company to be established in Turkey

1- In Türkiye, how many shareholders can Limited Liability Company be established with?

One shareholder is sufficient for the establishment of a Limited Liability Company in Türkiye.

2- Is there an upper limit on the number of shareholders in a Limited Liability Company?

The upper limit for the number of shareholders of a limited liability company to be established in Türkiye is 50 shareholders.

If the number of shareholders of the Limited Liability Company is more than 50, the Joint Stock Company type must be selected.

3- Is it obligatory for the shareholders to be Turkish citizens?

No. The shareholder(s) does not have to be Turkish citizens. All shareholders can be foreign persons.

4- Can a shareholder be a legal person?

Yes. The shareholder(s) of the Limited Liability Company can be foreign persons. For example, a limited liability company or joint stock company abroad can be a legal person shareholder of a limited or joint stock company to be established in Türkiye.

There is no obligation to have a Turkish citizen shareholder in a company to be established in Türkiye.

5- Can the authorized signatory of the company be a foreign real or legal person?”

Yes. The authorized signatory (director) of the Limited Liability Company can be a real or legal person established in Türkiye or a foreign person.

If the legal person is elected as the director of the company in Türkiye, he/she must choose a real person who will sign on behalf of the foreign legal person. This real person can also be a Turkish citizen or a foreign.

6- Can the title of the company be chosen freely?

Yes, any title can be used. At least one industry name must be included in the title.

Before the establishment, it is inquired whether there is a similar title or not.

In the title, “Turkish, Türkiye, Republic, National” statements are not used in order that they depends on the approval of the Council of Ministers.

City names can be used if desired. For example, ABC Istanbul Makine Ltd.Şti.

7- Can the company’s logo and trademark be registered?

Yes. Logo and trademark registration can be made after the establishment of the company.

8- Can the company operate in more than one sector?

Yes, it is possible. Provided that it is stated in the Articles of Association of the company, it is possible to operate in more than one sector.

9- What is the mandatory minimum capital amount for a Limited Liability Company?

The minimum capital required for a Limited Liability Company to be established in Türkiye is 10 thousand TL.

The capital commitment must be transferred by the shareholders to the bank account to be opened in the name of the company after the establishment.

In case the capital amount is high, 1/4 of the capital commitment remaining after the establishment is deposited to the bank account of the company by the shareholders within 2 years following the establishment and can be freely used for company activities.

10- What is the term of office of the directors of the Limited Liability Company?

The management of Limited Companies in Türkiye is carried out by the directors. More than one director can be selected, if desired.

The term of office of the director(s) can be determined indefinitely. Some directors can be authorized indefinitely, while others can have different terms.

11- Does the company have to have an address?

Yes. The company must have a legal postal address. Addressing, answering coming calls and mail/cargo delivery and forwarding can be purchased as services from virtual office companies.

12- How long does it take to establish a limited liability company in Turkey?

After obtaining the documents required for the establishment, the establishment of a Limited Liability Company with foreign capital is completed within approximately 5 to 7 working days.

13- Where is the registry of limited liability companies in Türkiye made?

In Türkiye, the registration of a limited liability company is made at the chamber of commerce, trade registry directorate, tax office and social security institution in the city where the company is located.

14- How is bank account opened for companies?

After the establishment of the company, the establishment documents are given to the bank and the bank starts the account opening procedures.

A bank account can be opened within 1 to 5 business days.

Banks can request additional information about foreign company shareholders during account opening.

15- How are sales invoices issued?

Invoices are created electronically through the software of integrator software companies authorized by the Turkish Revenue Administration and sent to customers electronically.

The e-Invoices of customers located abroad are sent separately and manually by the issuing Limited Liability Company by e-mail.

16- Which declarations are given in Türkiye and when are they given?

VAT declaration: Monthly

-Withholding declaration: Monthly

-Corporations Provisional Tax Return: 3 Months

-Corporate Tax Declaration: Annually

-Stamp Duty declaration: When there is a contract concluded

-Social Security Notice: Monthly

17- Who is responsible for public debts?

In limited liability companies in Türkiye, the responsibility for public debts is in the shareholders and directors of the company in proportion to their shares.

Liability for commercial debts is limited to the assets of the company.

As long as there is no misleading and fraudulent transaction, the persons and institutions with whom commercial relations are made can only go to the assets of the company for their receivables from the Limited Liability Company. They cannot go to company shareholders or the personal assets of its directors.

18- Do share certificate have to be printed?

Limited Liability Companies in Türkiye do not have to issue share certificate. However, optionally, the share certificate can be printed. Share certificate can be printed by name or bearer.

In order for the share certificate to be issued, the subscribed capital must be fully paid.

19- Is the income from the sale of share certificate taxable?

The profit to be obtained from the sale of shares of limited companies is exempt from income tax for the shareholder selling the share.

20- How to sell share certificate?

The sale of shares must be made with a share transfer agreement to be drawn up at the notary public. The sales transaction made afterwards is recorded in the shareholders’ board resolution book of the Limited Liability Company and registered in the shareholders’ share book.

As a final transaction, registration is made from the trade registry office and a notification is made to the tax office and social security institution.

21- What are the tax rates in Türkiye?

Some tax rates in Türkiye:

-Corporate Tax rate is applied as 25% for 2022 and 2023.

Income, expense and profit/loss calculations are made quarterly and as follows.

Income-expense calculation and declaration periods;

1st Quarter: January-March period statement; Until May 17,

Quarter 2: April-June statement; Until August 17,

3rd Quarter: July-September period declaration until 17 November,

4th Quarter: October-December period declaration, until April 30 of the following year,

It is declared and if there is a profit, 25% Corporate Tax is paid. If the period resulted in a loss, no tax is payable.

– The profit distribution withholding rate is 10%.

If the profit remaining after the corporate tax is paid is desired to be distributed to the shareholders in whole or in part, 10% profit distribution withholding tax is paid over the dividend to be distributed.

-The general VAT rate is 20%.

VAT Declaration is submitted monthly.

22- How long does it take to close a limited liability company in Türkiye?

– If the limited liability company is to be closed, liquidation procedures must be carried out.

Liquidation entry procedures take approximately 1 month, liquidation period takes 3 months and finally liquidation closing processes take 1 month. All liquidation procedures are completed within 5 months.

At least one liquidation officer must be appointed for liquidation.

If only one liquidation manager is appointed, he/she must be a Turkish citizen.

If more than one liquidation manager is appointed, it is sufficient for one of them to be a Turkish citizen.


WHY STARTING A NEW BUSINESS IN TÜRKİYE IS A SOUND

DECISION

Starting your own business is an exciting project and if you are thinking of doing it abroad, the experience is even more intense. If you are thinking of starting a company in Turkey, then there has never been a better time. Recent legislation there promotes foreign investment, meaning it is much easier today to start a business in Turkey. The internal banking services and general infrastructure has been vastly improved, with trade links between Europe, Asia, and the Middle East maintaining a strong position. Turkey has historically attracted high levels of foreign investment due to this unique trading position and is recognised as offering some significant opportunities for company establishment. You may have to deal with bureaucratic procedures, but the scope will make it worth the effort. Read on to find out more about how to start business in Turkey.

Formun Üstü

Formun Altı

STARTING A COMPANY IN TÜRKİYE

It is easy to understand why Turkey appeals worldwide as a profitable business destination, especially for new businesses. It offers a young and highly educated population, where nearly half of its population are under 30. There is also a large amount of international companies that have launched new offices throughout the major cities, particularly around Ankara and Istanbul. Although most foreigner investors tend to focus on tourism, the Turkish Commercial Code contains several different business structures, all open to foreigners wanting to start a business in Turkey. Corporate law stipulates equal treatment, so international investors are entitled to exactly the same rights as Turkish ones. However, there are some regulated sectors like aviation and energy, where business in Turkey for foreigners gets a little more complex.

COMPANY ESTABLISHMENT IN TÜRKİYE

It is always a good idea to start with research on how to start business in Turkey, check out the relevant authorities and seek legal advice before you get started with company establishment. The most popular option for foreigners is a private limited company, which can be easily set up by as little as two non Turkish nationals. If you are wondering about the price for starting a business in Turkey, then this requires a minimum of 10,000TL and you will need to have at least one shareholder. The process for company incorporation is fairly straightforward, and you should be able to then start trading within a week. This makes it perfect for choices of international business in Turkey like restaurants, letting companies, hotels, estate agents or shops.

Newly industrialised countries like Turkey provide an extremely interesting opportunity and provide a fertile base for ideas. Businesses can be started with minimum investment and have low operating costs. Today, there are plenty of unpenetrated markets and plenty of scope for entrepreneurs to replicate successful business models. Turkey is an attractive proposition, so why not get started today?

BUSINESS IN TÜRKİYE FOR SALE

Some investors find purchasing an existing business to be a safer option with greater benefits. It will have a stable trading history, existing customers, and staff who understand the business. Businesses for sale can easily be found on websites, or you can use a business broker to inform you about new businesses entering the market. It is likely to be a big investment, so be sure that you understand the legal aspects. As experienced local accountants we provide insight into business potential, competition levels and help you start your companies for reasonable cost of company formation in turkey.

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