Turkey’s robust and strategically positioned economy makes it an ideal destination for setting up a holding company. With the right legal guidance from an experienced Turkish Law Firm and the assistance of an English Speaking Turkish Lawyer, foreign investors can capitalize on the multiple legal and tax advantages of establishing a holding structure. This guide explores the steps, benefits, and critical legal considerations for setting up a holding company in Turkey with the help of the Best Lawyer in Turkey.
What Is a Holding Company?
A holding company is an entity that primarily exists to own shares in other companies, control management policies, and oversee corporate strategies. In Turkey, holding companies can own domestic and foreign subsidiaries across a range of industries.
Why Set Up a Holding Company in Turkey?
- Strategic access to European, Middle Eastern, and Asian markets
- Favorable tax regime and international treaties
- Strong corporate infrastructure and investor protections
- Ease of managing multiple subsidiaries from a single jurisdiction
Legal Framework Governing Holding Companies
- Turkish Commercial Code No. 6102 (TCC)
- Capital Markets Law (for listed companies)
- Foreign Direct Investment Law No. 4875
- Corporate Tax Law No. 5520
Steps to Establish a Holding Company in Turkey
1. Choose the Right Legal Entity
The most common structures are the Limited Liability Company (LLC) and the Joint Stock Company (JSC). Learn more about Company Formation in Turkey.
2. Prepare the Articles of Association
The Articles should explicitly state the company's purpose as managing, acquiring, and holding shares in other companies.
3. Capital Requirements
The minimum capital requirement for a JSC is 250,000 TRY; for an LLC, it is 50,000 TRY. A higher capital base enhances credibility.
4. Register with the Trade Registry
All holding companies must register with the local Trade Registry Office in Turkey.
5. Tax Registration and Compliance
Obtaining a tax identification number, registering with the Social Security Institution (if hiring staff), and ensuring VAT compliance.
Tax Advantages of Holding Companies in Turkey
- Participation Exemption: Profits from share transfers of subsidiaries can be exempt from corporate tax if holding conditions are met.
- Dividend Exemption: Dividends received from Turkish subsidiaries can be exempt from corporate tax under certain conditions.
- Double Taxation Treaties: Turkey has treaties with over 80 countries minimizing withholding taxes on cross-border dividends.
- No Capital Duty: No separate duty applies when transferring shares between subsidiaries held by the same holding company.
Common Legal Considerations for Foreign Investors
- Residency requirements for directors are not mandatory.
- Foreign shareholders can fully own Turkish holding companies.
- Proper governance structures are essential to manage liability risks.
Why Work with ER&GUN&ER Turkish Law Firm?
- Customized legal structuring solutions for foreign investors
- Expert guidance on tax optimization strategies
- Full corporate, tax, and regulatory compliance support
- Experienced English Speaking Turkish Lawyers dedicated to your success
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Frequently Asked Questions (FAQs)
- Can foreigners fully own a Turkish holding company? Yes, full foreign ownership is permitted.
- What sectors can a holding company invest in? Any sector, subject to sector-specific regulations.
- Are there residency requirements for shareholders or directors? No residency requirements for foreign investors.
- What taxes apply to holding companies? Standard corporate income tax, but exemptions on participation and dividends may apply.
- Is it easy to transfer shares held by a holding company? Yes, Turkish law facilitates share transfers within group structures.
- Can a holding company manage multiple subsidiaries? Yes, it is the primary function of a holding company.
- Does Turkey offer any free zones for holding companies? Free zones typically focus on operational companies, but tax advantages can be combined.
- How long does it take to establish a holding company? 2–4 weeks depending on documentation and approvals.
- Can holding companies benefit from VAT exemptions? Not generally, unless specific conditions are met for asset transfers.
- Why is it important to work with the Best Lawyer in Turkey? Proper structuring ensures legal protection, tax optimization, and regulatory compliance. Our Turkish Law Firm ensures all your needs are addressed.
Conclusion: Set Up Your Holding Company with Confidence
Building a strategic presence in Turkey through a holding company offers unparalleled opportunities for foreign investors. Partnering with the Best Lawyer in Turkey from a trusted Turkish Law Firm staffed by English Speaking Turkish Lawyers ensures that you achieve your business goals seamlessly. Contact us today to start your holding company setup journey in Turkey.