STARTING A BUSINESS IN TURKEY AS A FOREIGNER

Introduction

Turkey is an attractive destination for entrepreneurs and investors due to its strategic location, growing economy, and favorable business environment. If you are a foreigner looking to start a business in Turkey, understanding the legal requirements and processes is crucial to a successful venture. At Altun Legal, our English-speaking lawyers in Istanbul are here to guide you through every step of establishing your business in Turkey.

Legal Framework and Business Structures

Turkey offers several types of business entities that foreigners can choose from, each with its own legal implications and requirements:

  1. Limited Liability Company (LLC or "Limited Şirket")
    • The most common business structure.
    • Requires a minimum of one shareholder.
    • Capital requirement: Minimum TRY 10,000.
    • Liability is limited to the capital contribution.
  2. Joint Stock Company (JSC or "Anonim Şirket")
    • Suitable for larger businesses and companies planning to go public.
    • Requires at least one shareholder.
    • Capital requirement: Minimum TRY 50,000.
    • Shares can be traded publicly, and liability is limited to capital.
  3. Branch Office
    • A foreign company can open a branch in Turkey.
    • No separate legal identity from the parent company.
    • Must appoint a representative in Turkey.
  4. Liaison Office
    • Used for non-commercial activities, such as market research.
    • Cannot engage in revenue-generating activities.
    • Requires approval from the Ministry of Industry and Technology.

Steps to Starting a Business in Turkey

1. Company Name and Registration

Choose a unique company name that complies with Turkish naming regulations. The name must not be misleading and should clearly reflect the business activities. Register the company name with the Turkish Trade Registry.

2. Preparation of Articles of Association

Draft the Articles of Association (AoA), which outlines the company’s structure, management, and operational rules. This document must comply with Turkish Commercial Code and be notarized.

3. Opening a Bank Account

Open a corporate bank account in Turkey. Deposit the minimum share capital required for your chosen business structure. For an LLC, this is TRY 10,000, and for a JSC, TRY 50,000. The bank will issue a receipt confirming the capital deposit, which is required for company registration.

4. Company Registration

Submit the notarized AoA, capital deposit receipt, and other required documents to the Turkish Trade Registry. The registration process usually takes a few days, and once completed, your company will receive a tax number.

5. Obtaining Necessary Licenses and Permits

Depending on your business activities, you may need to obtain specific licenses or permits from relevant authorities. For example, businesses in the food, healthcare, or education sectors may require additional approvals.

6. Registration with the Tax Office

Register your business with the local tax office to obtain a tax identification number. You will be required to pay corporate taxes, value-added tax (VAT), and possibly other taxes depending on your business activities.

7. Social Security Registration

Register your company and employees with the Social Security Institution (SGK) to ensure compliance with Turkish labor laws. This step is mandatory for all businesses with employees.

Legal Considerations for Foreign Investors

1. Work and Residence Permits

As a foreign business owner, you will need to obtain a work permit to legally work in Turkey. This can be done by applying to the Ministry of Labor and Social Security. Once granted, you can also apply for a residence permit, allowing you to live in Turkey.

2. Foreign Ownership Restrictions

Turkey generally allows 100% foreign ownership in most sectors. However, there are restrictions in certain industries, such as media, defense, and agriculture, where foreign ownership may be limited or require special approval.

3. Double Taxation Agreements

Turkey has signed double taxation agreements with many countries to prevent double taxation of income earned in Turkey. It is advisable to consult with a tax advisor to understand the implications of these agreements on your business.

4. Protection of Intellectual Property

Ensure that your trademarks, patents, and copyrights are registered and protected under Turkish law. Turkey is a member of several international intellectual property treaties, providing a robust framework for protecting your intellectual property rights.

5. Employment Law

Understand the key aspects of Turkish employment law, including labor contracts, working hours, termination procedures, and employee rights. Compliance with these laws is essential to avoid legal disputes and penalties.

How Altun Legal Can Assist

Starting a business in Turkey as a foreigner involves navigating a complex legal landscape. At Altun Legal, our English-speaking lawyers in Istanbul provide comprehensive legal services to help you establish and operate your business smoothly. Our services include:

  • Legal Consultation: Understanding the best business structure for your needs.
  • Company Formation: Assisting with the preparation and registration of documents.
  • Regulatory Compliance: Ensuring your business meets all legal requirements.
  • Work and Residence Permits: Facilitating the application process for permits.
  • Tax and Financial Advisory: Helping you understand your tax obligations and optimize your business structure.
  • Intellectual Property Protection: Securing and enforcing your intellectual property rights.

Conclusion

Starting a business in Turkey as a foreigner offers significant opportunities but also comes with challenges. By working with experienced legal professionals, you can ensure that your business is set up for success and compliant with all local regulations. At Altun Legal, we are committed to helping you navigate the complexities of Turkish business law with confidence and ease.

 This article is intended for general informational purposes only and not intended as a substitute for the advice and counsel of an attorney. If you want to contact an English-speaking lawyer in Istanbul for more information, you can contact our office.