Countries that want to exist in a world that is changing rapidly under the leadership of technology and to take a place in developing markets are constantly trying to keep their internal regulations up-to-date in order to improve the investment environment in order to be preferred by foreign investors. Turkey regularly adapts its legislation to international regulations in order to both encourage local investors and attract foreign investors to the country. We can say that the most important of these are the regulations regarding the establishment of companies.

Generally speaking, we can say that there is no difference between company establishments, tax and social security practices between Turkish investors and foreign investors. In other words, tax rates and calculation methods are applied at the same rate for Turkish citizens and foreign persons.

In this article, we will give brief information about the partnership structure of a limited liability company to be established in Turkey.

Firstly, let’s talk about the regulations on the number of shareholders. A limited liability company to be established in Turkey must have at least one shareholder. The upper limit for the number of shareholders is 50 people. In other words, a limited liability company can have at least 1 and at most 50 shareholders. If it will be established with more than 50 shareholders or if the number of partnerships will increase to more than 50 later, the company type must be converted to a joint-stock company.

One or more of the shareholders of a limited liability company to be established in Turkey can all be foreign persons. As is practiced in some countries, there is no restrictive practice in Turkey, such as the obligation of a Turkish shareholder alongside a foreign shareholder.

The foreign shareholder or one or all of the shareholders of the limited liability company can be a natural person or a foreign legal person. A foreign legal person can be a sole proprietorship of a limited company in Turkey. At the same time, s/he can be the sole authorized signatory director of the limited liability company.

If the foreign legal person is the sole shareholder and director of the limited liability company to be established in Turkey, a real person representative must be appointed to represent him/her. This natural person representative will sign on behalf of the legal person who is the director of the limited liability company. Signatures to be put by the real person in the capacity of representative will bind the foreign legal person who is the director.

Company shareholders can freely sell their company shares to another natural person or legal entity at any time. There are no legally determined prerequisites or restrictive regulations before this. Limited company share transfers must be made by notaries in Turkey and must be reported to the trade registry office where it is registered. Share transfers can be made by proxy through a Power of Attorney.

It is quite easy to establish a limited company in Turkey for foreign investors who have the same rights as domestic investors. Incentives provided according to the potential young population, geographical location, climate, qualified workforce, type of investment, location, sector, job creation power and similar criteria make Turkey stand out in its own region. We can say that Turkey has many opportunities for foreign investors with a good product, qualified service network and continuity.




Karen Audit & Public Accountant Company


Source: Ali Karakuş, CPA – Karen Audit & Public Accountant Company
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