For many years, Turkey has attracted foreign companies thanks to its stable and advantageous investment climate, government support for business, lack of strict restrictions on the residence of citizens, variety of business forms, etc. If you decide to become present in this country, your business arrangement may be formalized in one of these forms.
Major Forms of Legal and Business Presence
Typically, company registration in Turkey is performed in one of these two major forms:
- Limited Liability Company – an entity where the financial liability of its members is restricted to the amounts contributed to this company. Authorized capital should be at least TL 10,000. The minimum composition of a company is one shareholder and one director with no residency requirements. The maximum number of participants is 50, in this case.
- Joint Stock Company – an enterprise where the liability of shareholders is restricted to the amounts contributed to their shares also. Such a company may offer under certain conditions its shares to the public involving this way extra financing. The minimum share capital of TL 50,000 is required for this type of company. The minimum composition is one individual or legal entity. The legislation established the mandatory formation of the board of directors and the conduction of general meetings. The board of directors should have at least one member, the use of nominal service is allowed.
Registration Requirements and Steps
If you want to incorporate a company in Turkey, the formal registration procedure covers these preliminary registration steps:
- Defining your business goals and priorities.
- Choosing and verifying a business name for a future Turkish enterprise.
- Collecting data about the founders, beneficial owners, and managers of the anticipated company.
- Arranging the business address for a future entity.
- Opening an account in a Turkish bank with placing to it an amount equal to ¼ of the value of authorized capital (for a joint-stock company).
- Drafting and formalizing statutory documents for the future Turkish enterprise.
- Collecting and submitting the set of required documents to the registrar.
- Registration for tax and social security purposes.
- Obtaining licenses and special permits (if such are required for conducting certain types of business activities).
Legal and Regulatory Framework
As a result of recent changes in the legislation, there is a significant simplification of the procedure of company registration in Turkey. Loyal legislation provides strong support to foreign entrepreneurs. This has increased the attractiveness of the jurisdiction. There can be created a company backed by 100% foreign capital. The Director of the company may be not only a resident of Turkey.
The major legal acts regulating the operation of companies in Turkey are the Commercial Code and the Capital Markets Law. The major state authorities regulating the activities of local companies are the Turkish Commercial Registry, the Ministry of Industry and Technology, and the Capital Markets Board.
If you are considering an option of company incorporation in Turkey, these preliminary tax highlights may be very helpful while this consideration:
- Corporate income tax (CIT) rate – 23%
- Personal income tax (PIT) rate – 40 %
- Value-added tax rate – 18 %
- Withholding tax (for foreigners) – (i) dividends – 15% (ii) interests – 10% (iii) royalties – 20%.
- Capital gains tax rates – (i) corporate – equals to the basic CIT rate (ii) individual – equals to the basic PIT rate.
The system of taxation is also determined by the status of the enterprise. Stamp duty is levied on contracts, letters of credit, promissory notes, and other documents. The amount of payment is a percentage of the value of particular documents.
Advantages of the Jurisdiction
Turkey attracts foreign capital creating favorable conditions for the development of foreign companies. There are a number of benefits that entrepreneurs get by registering a company here. The most important of them are as follows:
- Trustworthiness of the jurisdiction.
- Simple and accessible registration.
- Developed infrastructure. Turkey’s economic and banking spheres are developed well enough to stimulate investors to invest their capital here.
- Existence of special investment zones: industrial – with preferential crediting, taxation, and the cost of energy resources; technological development zones; free zones – are stimulating export-oriented investment flow.
- A possibility to expand business through access to international markets.
How Prifinance Specialists May Help You
Registration of a company in Turkey is a simple and inexpensive process. Prifinance experts have an excellent knowledge of the nuances of the law, providing support at all stages. Prifinance staff consists of professionals with extensive experience who perform the registration of companies in the shortest possible time following all legal requirements and customer’s wishes. It is important to note that for each client we have prepared a special offer where it is enough to make a 30% down payment only. The remaining amount you pay after receipt of all documents confirming the completion of the registration procedure. Reach us shortly for more precise discussions and suggestions.