Registering a Company in Turkey: A Guide for Foreign Investors

Turkey's strategic location bridging Europe and Asia, combined with its large domestic market and ongoing economic reforms, has made it an increasingly attractive destination for foreign investors. The Turkish government has taken significant steps to streamline the company registration process, making it more accessible for international entrepreneurs looking to establish a business presence in the country.

This Lawzana resource has been designed to walk you through the essential steps, requirements, and considerations for registering a company in Turkey as a foreigner.

Why Choose Turkey for Your Business Venture?

Turkey offers numerous advantages for foreign investors:

• Strategic Geographic Location: Positioned at the crossroads of Europe, Asia, and the Middle East, Turkey provides access to multiple regional markets.
• Large Domestic Market: With a population of over 84 million, Turkey offers significant domestic market potential.
• Improving Business Environment: Turkey has implemented various reforms to enhance its business climate, as recognized by the World Bank's Doing Business reports.
• Government Incentives: The Turkish government offers various incentives for foreign investors based on priority areas, regions, project scale, and strategic sectors.

Understanding the Costs of Starting a Business in Turkey

Before diving into the registration process, it's important to understand the associated costs. These vary based on factors such as company type, legal and accounting fees, and minimum capital requirements:

Expense	Estimated Cost
Company registration fees	$1,000–$2,500
Notary and translation fees	$300–$500
Minimum capital (LLC)	10,000 TRY (approx. $370)
Minimum capital (JSC)	50,000 TRY (approx. $1,850)
Legal and accounting fees	Varies

Note: These are estimated costs and may vary based on your specific circumstances.

Step-by-Step Guide to Company Registration in Turkey

Choose Your Business Structure

Selecting the appropriate legal structure is a crucial first decision. The most common types for foreign investors in Turkey are:

Limited Liability Company (LLC)

• Requires at least one shareholder
• Minimum capital requirement: 10,000 TRY
• Limited liability protection for shareholders
• Simpler management structure, ideal for smaller businesses and startups

Joint Stock Company (JSC)

• Suitable for larger businesses
• Minimum capital requirement: 50,000 TRY
• Accommodates more complex ownership structures
• Often used for publicly traded companies

Obtain a Tax Identification Number (TIN)

All foreign investors must secure a tax identification number from the local tax office. This number is essential for:

• Opening a bank account
• Registering your company
• Conducting business operations

You can obtain a TIN by presenting your passport at any tax office in Turkey. Remote options are also available after an initial visit to Turkey, providing convenience for international investors.

Register Your Company Name

Before proceeding with registration, you need to verify that your desired business name is available and reserve it. The Turkish Trade Registry maintains a database of registered company names where you can conduct a search to check availability. Be aware that certain words or phrases may be restricted for company names in Turkey.

Prepare Required Documents

Gathering the necessary documentation is a critical step. These typically include:

• Articles of Association: This legally binding document outlines your company's purpose, structure, internal regulations, and shareholder rights and responsibilities.
• Proof of address for your company's headquarters in Turkey (lease agreement or ownership documents)
• Copies of shareholders' passports to verify identity
• Notarized signatures of shareholders or their legal representatives

Submit Documents and Pay Registration Fees

Once your documents are prepared, submit them to the relevant Trade Registry Office. This can be done online through the MERSIS system (Central Trade Registry System), which streamlines the process and allows you to track your application online.

Upon approval, you'll receive a company registration certificate and a unique company registration number, officially establishing your business as a legal entity in Turkey.

Open a Bank Account

Opening a corporate bank account at a Turkish bank is essential for:

• Depositing the minimum share capital
• Managing your company's financial transactions
• Conducting day-to-day business operations

Register for Social Security and Taxes

You must register your company with:

• Social Security Institution (SGK): This ensures compliance with Turkish labor laws and provides social security coverage for your employees.
• Local tax office: After the Commercial Registry Office notifies them of your company registration, you'll need to obtain a tax registration certificate to fulfill your tax obligations.

Obtain Necessary Permits and Licenses

Depending on your business activities, you may need specific permits or licenses from local authorities, such as:

• Health and safety permits
• Environmental permits
• Industry-specific licenses

Research the requirements specific to your business sector to ensure compliance with Turkish regulations.

Certify Company Books

As a final step, Turkish commercial law requires certification of key business books, including:

• Ledger
• Journal
• Meeting minutes books

These must be certified by the trade registry directorate to ensure proper record-keeping and legal compliance.

Online Company Registration in Turkey

Turkey has embraced digitalization in its company registration process through the MERSIS system, the official online platform for company registration. This system allows foreign investors to:

• Submit documents electronically
• Track application status in real-time
• Access various corporate details online

Explanation: Initial user registration on the MERSIS website
This digital approach has significantly reduced bureaucracy and simplified the registration process.

Work Permits for Foreign Investors in Turkey

Foreign investors who wish to actively manage their businesses in Turkey need to obtain appropriate work permits:

Independent Work Permit

• For foreigners establishing and working independently in their Turkish business
• Requires a residence permit valid for at least six months

Work Permit for Foreign Directors

• Requirements include:
  
  • Increased minimum paid-in capital of 100,000 TRY
  • Employment of at least five Turkish citizens
  • Obtaining a local work visa

Understanding these specific requirements is crucial before applying for the appropriate work permit. Learn more through the Turkish government investment office.

Resources and Assistance for Foreign Investors

Several resources are available to help foreign investors navigate the company registration process:

Investment Office of the Presidency of Turkey

The Investment Office provides comprehensive support to foreign investors, including:

• Guidance on company registration procedures
• Information on business costs in Turkey
• Details about infrastructure advantages in organized industrial zones, technology development zones, and free zones
• Explanation of government incentives for various investment types

Professional Legal and Consulting Services

Specialized business Turkish law firms and consulting companies offer valuable expertise in:

• Company registration
• Legal compliance
• Obtaining necessary permits
• Navigating the Turkish regulatory landscape

These professionals can significantly streamline the process for foreign investors unfamiliar with Turkish business practices.

Online Resources and Information Sources

Several online platforms provide information for company registration:

• MERSIS: The official company information platform containing documentation from all Trade Registries in Turkey
• Advert Portal of Turkey: For tracking official company announcements
• Union of Chambers and Commodity Exchanges of Turkey (TOBB): A prominent business organization offering valuable resources and support

Explanation: An overview of the TOBB website

Turkish Trade Registry Gazette

The Turkish Trade Registry Gazette (TTRG) is an official publication that:

• Publishes all amendments for the trade registry
• Documents company formations and structural changes
• Serves as a reliable source of information about registered companies

Companies must publish certain announcements in the TTRG to ensure transparency and legal compliance.

Turkey Citizenship by Investment Program

For foreign investors seeking Turkish citizenship, the Turkey Citizenship by Investment program offers an expedited path for those making significant investments in the Turkish economy, including starting qualifying businesses. This can be particularly attractive for investors planning a long-term presence in Turkey.

Key Considerations for Foreign Investors

Business Environment Improvements

Turkey has made significant progress in improving its business environment, as evidenced by its improved ranking in the World Bank's Ease of Doing Business Index. Recent reforms have streamlined processes for:

• Business registration
• Obtaining construction permits
• Accessing credit
• Enforcing contracts

The World Bank's Doing Business report ranks business regulations and their enforcement in 190 economies worldwide, and even looks at some cities regionally and subnationally. It uses detailed data to compare how easy it is to do business in different places and how that changes over time. 

Explanation: An overview of what is measured in terms of Doing Business metrics, as outlined here by the World Bank.

This encourages countries to improve their regulations, provides clear goals for reform, and offers a valuable resource for academics, journalists, private sector researchers, and anyone else interested in a country's business environment. In the 2020 report, Turkey made a significant leap, climbing 10 spots to rank 33rd out of 190 countries in the Ease of Doing Business Index.

Cultural and Business Practices

Understanding Turkish business culture and practices can be crucial for success. While the formal registration process is well-defined, building relationships and understanding local customs will help your business thrive in the Turkish market.

Legal Representation

Given the complexity of regulations and potential language barriers, having legal representation from a firm experienced in assisting foreign investors is highly recommended. Professional guidance ensures compliance with all requirements and helps avoid costly mistakes or delays.

Your Path to Turkish Business Success

Registering a company in Turkey as a foreigner follows a well-defined process that has become increasingly streamlined and efficient. The Turkish government's commitment to attracting foreign investment is evident in the reforms implemented to simplify business establishment procedures.
By understanding the key steps, requirements, and available resources outlined in this guide, foreign investors can successfully navigate the registration process and establish their presence in this dynamic market. Turkey's economic potential, strategic location, and improving business environment make it an attractive destination for entrepreneurs and businesses seeking growth opportunities.

For personalized guidance tailored to your specific business needs, connecting with legal experts who specialize in Turkish company law and foreign investment can significantly smooth your entry into the Turkish market. At Lawzana, we can connect you with experienced legal professionals who understand the nuances of establishing businesses in Turkey and can guide you through every step of the process.

Disclaimer: This article provides general information about company registration in Turkey and should not be construed as legal advice. Laws and regulations may change over time. Please consult with a qualified legal professional for advice specific to your situation.