Last Updated on 28/11/2023
Turkey, a vibrant bridge between Europe and Asia, offers a lucrative market for entrepreneurs looking to establish their businesses. Yet, the process of company registration in Turkey involves several essential steps, from understanding the market to navigating legal requirements. In this comprehensive guide, we outline clear instructions to successfully set up your business in this dynamic country.
Opening a company in Turkey
For investors opting for company registration in Turkey, there’s an attractive option to incorporate within the Turkish free trade zone. The advantages of establishing a company in this zone are plentiful, with the government offering various incentives and tax benefits. Additionally, investors can repatriate funds to their home country from the Turkish Free Trade Zone.
Moreover, foreign investment is flourishing in the country, bolstered by the government’s relaxed regulations concerning foreign investment. Turkey’s economy is rapidly advancing, placing it among the world’s swiftly developing economies. Furthermore, in Western Asia, Turkey holds the position of the second-largest recipient of foreign direct investment. These compelling factors attract investors to opt for a company registration in Turkey.
Besides, situated between Europe and Asia, Turkey’s geographical location facilitates smooth transportation, a significant advantage for potential investors. Despite not being a European Union member, Turkey enjoys exemptions from taxes with the European Union. Therefore, Turkey maintains a customs union with the EU, resulting in reduced customs duties and tariffs on trade goods and products. Consequently, considering the advantages above, investing in company formation in Turkey proves to be a lucrative prospect for discerning investors.
Eligibility for company registration in Turkey
The minimal capital necessary for company registration in Turkey depends on the type of company. Therefore, to establish a Joint Stock company in Turkey stands at 50,000 Turkish Liras (TL). However, for Non-Public Joint Stock Companies, the capital requirement increases to TL 100,000. Yet, in the case of a limited company or a limited liability company, the minimum capital is TL 10,000.
There is no minimum number of shareholders obligatory for either a Joint Stock company or a Limited Liability Company. However, typically, at least one shareholder is a fundamental requirement for initiating the registration of these company types in Turkey.
Minimum Directors for Company Registration in Turkey
A minimum of one director is essential for the process of company registration in Turkey. Yet, there is no maximum limit imposed. In the context of a Limited Liability Company, either the partner or the manager holds the authority to represent the company.
Residency is not an obligation for company registration in Turkey. Only branch offices, subject to specific conditions, necessitate the appointment of a local representative.
Learn more about the places closed for a residence permit in Turkey
Procedure of Company Registration in Turkey
The registration process for establishing a company in Turkey entails the following steps:
To initiate company registration in Turkey, the applicant must create an account on MERSIS. The online system is accessible to all applicants. Foreign applicants need to obtain a tax number before registering.
Online System Usage:
The online system linked with MERSIS involves creating contracts by inputting specific application-related information. The system also generates the Tax Number for the Company. Authorized representatives are required to sign the contracts. Some companies may need to fulfill additional requirements from the Trade Registry Directorate.
If the approval process of company registration in Turkey necessitates notary involvement, the requirements must be fulfilled by the respective notary. Thus, the notary verifies the signatures, following which declarations are prepared by the individuals.
0.04% of the authorized capital of the company must be deposited into a bank account, which belongs to the ‘share competition authority. In fact, payment can occur at the trade registry along with other transactions. Yet, in the case of joint stock companies, 25% of the amount in cash needs to be deposited in the bank account, facilitating the registration process.
Trade Registry Application:
For company registration in Turkey, the applicant must apply to the trade registry, specifically to the trade registry directorate. After vetting the application, the trade registry provides confirmation.
Compliances for Company Registration in Turkey:
Several compliances are mandatory for company registration in Turkey:
- Shareholders Meeting: Holding a shareholders meeting within three months at the end of the accounting year is obligatory.
- Extraordinary General Meeting: Shareholders can call an extraordinary general meeting whenever needed.
- Board of Directors Meeting: Board meetings must comply with the articles of association of the company.
- Corporate Tax: The company is required to file tax returns with the relevant tax authorities. Corporate tax in Turkey stands at 20%.
- Business Registration: Companies registered in Turkey must conduct initial registrations and annual filings to comply with business registration requirements.
Required Documentation for company registration in Turkey
The documentation necessary for a company registration in Turkey comprises the following:
- Articles of Association of the Company, endorsed by the promoters
- Confirmation of 25% capital contribution held in a bank account
- Proof or payment records concerning the competition authority
- Valuation Reports of the Company to assess cash and non-cash assets
- Document for other capital forms, affirming the absence of capital restrictions
- Document or evidence demonstrating rightful ownership of respective intellectual property rights
- All contracts pre and post-company incorporation
- Approvals from the ministry as per the respective requirements
- Information regarding the duties of the Board of Directors
- Details about the directors, notarized copy indicating their rightful position in the competent body for registration
- Authorized signatures confirming the individual’s eligibility to bind the company
- Any agreements executed by the company
- Declarations signed by the Directors of the Company
- Approval of signatures by the Trade Registry of the Company.