Starting a business in Turkey requires careful legal planning and knowledge of local procedures. Turkey's regulatory landscape has evolved significantly, with new reforms that align with EU standards and simplify business procedures, offering foreign investors equal treatment and a one-stop-shop company registration that can be completed in as little as a day. This guide covers every aspect of establishing a company in Turkey, from choosing the right business structure to post-incorporation obligations. All figures and regulatory requirements in this guide reflect the law as understood at the time of writing — practice may vary by authority and year. Verify current requirements with qualified Turkish counsel before acting on any specific point.

It is highly advisable to consult a qualified lawyer in Turkey early in the process. An experienced law firm in Istanbul with international business expertise can ensure you meet all legal requirements and avoid costly errors in paperwork or compliance.

Why set up a business in Turkey?

Turkey offers a robust, fast-growing economy and a strategic location at the crossroads of Europe, the Middle East, and Asia. With a large domestic market and Free Trade Agreements granting access to regional markets, businesses in Turkey can reach a substantial consumer base. The population of approximately 85 million is young and dynamic, providing a skilled workforce and strong consumer demand.

Turkey has a liberal investment climate with no barriers to FDI and strong investor protections enshrined in the Foreign Direct Investment Law (Law No. 4875). Foreign investors are treated the same as local entrepreneurs — you can own 100% of a Turkish company with full control and property rights. All registrations are now handled through the central MERSIS system, with digital filings and fast-track processing. In many cases, you can go from application to an active company within a single business day.

Various investment incentives make Turkey attractive for global entrepreneurs, including VAT and customs duty exemptions for certain investments, R&D supports, and regional development grants. Companies focusing on manufacturing for export can consider Turkey's Free Zones, which offer significant exemptions from corporate tax, VAT, and customs duties on eligible operations. Technology Development Zones (Technoparks) allow profits from software and R&D activities to benefit from corporate tax exemptions. Practice may vary by authority and year — verify current incentive eligibility and applicable thresholds directly with the relevant Ministry or investment agency before structuring any investment around a specific incentive program.

Overview of company types and structures in Turkey

When it comes to company formation in Turkey, foreign investors have several business structures to choose from. The Turkish Commercial Code (TTK, Law No. 6102) defines a range of company types, but the most common forms for both local and foreign entrepreneurs are:

• Limited Liability Company (Ltd. Şti.): Often the preferred vehicle for small and medium-sized businesses. It requires a minimum capital of 50,000 TL (as of the 2024 reforms) and can have 1 to 50 shareholders. An LTD offers limited liability protection and a simple governance structure. Profit distribution is flexible, though share transfers require notary involvement and registration approval.
• Joint Stock Company (A.Ş.): A more complex corporate form suitable for larger enterprises. It requires a minimum capital of 250,000 TL. JSCs allow for public offerings and share certificates. Governance includes a board of directors and general assembly. Ideal for ventures planning a capital raise or public listing.
• Branch Office: An extension of a foreign company. No capital is required, but the parent company bears full liability. Branches must register with the trade registry and can repatriate profits subject to applicable withholding tax. Suitable for market testing or limited-scope activity.
• Liaison (Representative) Office: For non-commercial presence only — research, communication, coordination. Cannot issue invoices or earn income. Must be licensed by the Ministry of Industry and Technology. Offers a Turkish presence without a full company but is limited to support roles only.

Most foreign investors will choose between LLC, JSC, branch, or liaison office depending on their goals. Practice may vary — verify current minimum capital requirements and licensing conditions for each entity type before making your selection, as these thresholds are subject to periodic revision.

Legal requirements for foreign company formation

Establishing a business as a foreigner in Turkey is straightforward — the law imposes no special barriers on foreign investors. You do not need a Turkish citizen partner or director, and 100% foreign ownership is permitted. However, there are important legal requirements and preparatory steps to understand:

• Unique company name and scope: Select a unique company name not already registered in Turkey. The name should include an indicator of the business form (e.g., "Ltd. Şti." or "A.Ş.") and hint at the business activity. An initial name availability check is done through the MERSIS online system. Prepare a brief description of your business scope, as this will be stated in the Articles of Association.
• Registered office address: Every company in Turkey must have a local registered address — the official domicile for legal notices and tax purposes. Before registration, secure a rental contract for an office (even a virtual office or co-working space address) in the intended registration city. The tenancy contract may need to be submitted during incorporation, and after formation a tax officer will physically verify the address.
• Founders, directors, and shareholders: Determine who will be the shareholder(s). It can be one or multiple individuals or legal entities. For an LLC, up to 50 shareholders are allowed; for a JSC, there is no maximum. If you plan to have a corporate shareholder, that foreign company will need to provide its corporate documents (Certificate of Incorporation, board resolution to invest) with apostille. Directors or managers can be foreign nationals — there is no local residency requirement by law. However, if all directors reside abroad, some processes (such as bank account opening) can be more cumbersome.
• Notarization and translation of documents: Official documents from abroad that will be used in the registration must be notarized and apostilled in their country of origin, then translated into Turkish by a sworn translator and notarized in Turkey. This typically includes passport copies of foreign shareholders and directors, the foreign company's Certificate of Activity and board resolutions (if a corporate shareholder), and any powers of attorney. Ensure that names and details match exactly across all documents — even a minor discrepancy can cause delays.
• Tax ID numbers for foreigners: Before the company can be registered, any foreign individual shareholder or director will need to obtain a Turkish tax identification number. This is submitted to the local tax office along with a copy of the passport, and a tax number is typically issued on the same day. If you work with an English speaking lawyer in Turkey, they will usually handle the tax number applications on your behalf via power of attorney. Corporate shareholders (foreign companies) will also be assigned a tax number for their Turkish operations.
• Minimum capital investment: As of 2024 reforms, the minimum capital is 50,000 TL for an LLC and 250,000 TL for a JSC. For LLCs, you are not required to pay in capital before incorporation — you have 24 months after establishment to fully pay the subscribed capital. For JSCs, at least 25% of the share capital must be paid in prior to registration (the remainder within 24 months). A fee of 0.04% of the capital is paid to the Turkish Competition Authority at registration. Practice may vary by authority and year — verify current capital thresholds and payment-in requirements before finalizing your capital structure.
• Sectoral permissions: Generally, no special permits are needed to form a company in standard industries. However, certain sectors (banking, finance, insurance, pharmaceuticals, education, broadcasting, etc.) require additional licenses or higher minimum capital. For a detailed analysis of the specific registration and licensing requirements for your intended business activity, see our overview of types of companies in Turkey and consult a qualified Turkish corporate advisor before proceeding.

Step-by-step guide to establishing a company in Turkey

Setting up a company in Turkey involves a sequence of official steps. Here is a practical roadmap for foreign investors:

1. Prepare a Power of Attorney (if applicable): If you cannot be physically present in Turkey for the incorporation, authorize a representative (usually your lawyer) via a notarized and apostilled power of attorney from your home country.
2. Obtain potential tax numbers: Secure a Turkish tax ID for each foreign shareholder and director before the registration appointment.
3. Draft the Articles of Association: The Articles of Association is the foundational charter of the company — covering name, scope, capital, shareholders, management structure, and decision-making rules. This must be prepared in Turkish and reviewed by qualified counsel.
4. Arrange notary certifications: Certain documents require notarization in Turkey before the official registration meeting — including signature declarations and, in some cases, the Articles themselves.
5. Deposit capital (if required pre-registration): For an LLC, this can be done after registration within 24 months. For a JSC, 25% must be deposited prior to registration.
6. Register at the Trade Registry Office: The formal application to the Trade Registry Directorate through the MERSIS system. In Istanbul and major cities, the Trade Registry is located within the Chamber of Commerce. For a detailed overview of the complete process, see our guide on opening a company in Turkey.
7. Obtain company documents: After registration, collect the Turkish Commercial Registry Gazette publication confirming the company's establishment.
8. Create the signature circular: Persons authorized to sign on behalf of the company must issue a notarized signature circular (imza sirküleri), which is required for banking, contract execution, and registry filings.
9. Tax and social security registrations: Follow up to ensure your tax registration is activated with the local tax office and your company is registered with SGK for social security purposes.
10. Open a bank account: With the company officially established, open a business bank account in the company's name. Most banks require in-person presence of the authorized signatory.
11. Post-incorporation notifications and licenses: Handle any sector-specific licensing, municipal registration, and mandatory electronic system enrollments (e-Fatura, e-Tebligat).

Throughout this process, having local assistance is invaluable. Our team provides end-to-end incorporation services — from MERSIS filing through accompanying you to the notary and tax office, ensuring nothing falls through the cracks.

Choosing the right legal entity: Ltd. Şti. vs. A.Ş.

One of the most important decisions is whether to set up as a Limited Liability Company (Ltd. Şti.) or a Joint Stock Company (A.Ş.). Both are available to foreigners and offer limited liability, but they differ in structure and flexibility:

• Minimum capital and financials: An LTD requires 50,000 TL minimum capital; an A.Ş. requires 250,000 TL. In an LTD, capital is divided into quotas (shares without physical certificates). An A.Ş. can opt for a registered capital system allowing capital increases up to a ceiling via board decision — useful for investment rounds.
• Shareholders: LTDs have a cap of 50 shareholders; A.Ş. can have an unlimited number. Both can start with a single shareholder. LTD share transfers must be notarized and registered and existing shareholders have a right of first refusal. A.Ş. share transfers are generally free unless restricted by the articles — no notary required for registered shares.
• Management and governance: An LTD is managed by one or more managers with no requirement for a formal board or regular board meetings — simpler to run administratively. An A.Ş. must have a Board of Directors (which can be a single person) and requires an annual General Assembly of shareholders.
• Liability considerations: Both structures protect shareholders' personal assets. However, in Turkey, company managers or directors can be held personally liable for unpaid taxes or social security premiums if the company cannot fulfill those obligations — this risk applies equally in both entity types.
• Audit and reporting: Small and medium enterprises are generally exempt from mandatory independent audit below defined size thresholds. Practice may vary by authority and year — verify current audit threshold levels before assuming an exemption applies to your company's profile.

An LTD is typically best for small-to-medium operations and closely held businesses that prioritize simplicity. An A.Ş. is suited for larger-scale projects, companies seeking external investment, or ventures that may eventually go public. For a detailed comparison aligned to your specific shareholder and governance profile, see our analysis of LLC versus joint stock company in Turkey.

Required documents for foreign investors and directors

As a foreign investor, gather the following documents before beginning the company formation process. Missing or incorrect paperwork is the most common cause of registration delays:

• For individual shareholders and directors (foreign persons): Notarized and sworn Turkish translation of passport; passport-sized photographs (typically 2) of each director; Turkish tax ID number document; power of attorney if signing remotely.
• For corporate shareholders (foreign company): Certificate of Activity or Good Standing, apostilled; Board Resolution authorizing the Turkish investment, apostilled and translated; Appointment of Representative for the Turkish company; Articles of Association of the foreign company if requested — all apostilled and with sworn Turkish translation.
• Company formation documents: Articles of Association in Turkish; MERSIS-generated Incorporation Notification Form; Founders' Declaration; Chamber Registration Statement; Competition Authority fee receipt; Bank letter for capital deposit (JSC only); Notarized signature declarations of authorized representatives.

Notarization, apostille, and translation considerations

Proper legalization of documents is a critical part of foreign company setup. Key points to note:

• Apostille: Turkey is a party to the Apostille Convention. Foreign-issued documents must be apostilled in their country of origin before use in Turkey. The apostille must be current and separate for each document.
• Translation: All foreign documents must be translated into Turkish by a sworn translator in Turkey. The translation must match all names, numbers, and content exactly across documents — even minor discrepancies cause delays.
• Notarization in Turkey: Translated documents require notarization in Turkey. Notary fees are charged per page or per signature.
• Timing: Obtaining an apostille in your home country can take two to three weeks in some jurisdictions. Plan these steps in advance — do not leave document legalization until the week before your intended registration date.

Practice may vary by authority and year — verify current Turkish notary and Trade Registry documentary requirements directly with the competent chamber before your registration appointment, as accepted formats can be updated.

Tax registration, MERSIS, and the trade registry process

• MERSIS (Central Registry System): Turkey's Ministry of Trade operates MERSIS as the online platform where all company registrations and changes are recorded electronically. The Articles of Association are prepared through MERSIS, and the system generates the forms required for the trade registry filing. The company's trade registry number (sicil numarası) and tax number are issued through this system.
• Trade Registry Office: In Istanbul and most major cities, the Trade Registry is located within the Chamber of Commerce. The registration appointment is the formal step at which the Articles are filed and the company comes into legal existence.
• Tax Office Registration: Once the company is registered, it is automatically assigned a corporate tax number. Follow up with the local tax office to ensure activation, collect the tax registration certificate (vergi levhası), and enroll in mandatory electronic systems (e-Fatura, e-Tebligat, e-Defter where applicable).
• Social Security Registration: A newly established company is automatically registered with the Social Security Institution (SGK). An employer SGK number is required before any employee can be hired. Practice may vary — verify current SGK registration procedures and mandatory notification timelines before hiring the first employee.
• Municipal registration: Depending on your business type and location, a municipal business license (işyeri açma ve çalışma ruhsatı) may be required before commencing operations.

Opening bank accounts and capital deposit

Without a local bank account, your Turkish company cannot effectively conduct business — receive customer payments, pay suppliers, or manage payroll. Key points for foreign founders:

• Document requirements: Banks require the company's trade registry certificate, tax registration, Articles of Association, signature circular, and identity documents of all authorized signatories. Each bank may have additional KYC requirements for foreign-owned entities.
• Process: The authorized signatory must attend in person at the bank branch for account opening. Most major Turkish banks have English-speaking relationship managers at central branches who work with international clients.
• Currency accounts: Turkish banks allow accounts in multiple currencies alongside TRY — useful for companies with significant foreign currency revenues or expenses.
• Capital completion: If you started an LLC and deferred the full capital payment, remember to deposit the remaining capital within 24 months of registration as required by the Articles.
• Practical note: Foreign founders often find bank account opening the most time-consuming step due to enhanced due diligence requirements. Having a complete document package and working with a Turkish advisor familiar with each bank's onboarding process significantly reduces delays.

SGK (social security), VAT, and ongoing tax compliance

After forming your company, compliance with ongoing obligations is critical. Note that all rates and deadlines below reflect the law as understood at the time of writing — practice may vary by authority and year. Verify current rates and filing deadlines with a qualified Turkish accountant before relying on any specific figure.

• Social security (SGK): If you hire employees in Turkey, you must register them with SGK and remit monthly social security premiums (total approximately 37.5% of gross wages, split between employer and employee contributions). Monthly declarations must be submitted and premiums paid within the statutory deadlines. Foreign shareholders who actively work in Turkey need a valid work permit to work legally and be placed on payroll.
• Value Added Tax (VAT / KDV): VAT is levied on taxable supplies at rates set periodically by the Council of Ministers — the standard rate has been adjusted in recent years. Monthly VAT returns must be filed and any net VAT payable must be settled within the statutory deadline. Practice may vary — verify the current standard and reduced VAT rates applicable to your specific business activity before finalizing pricing or invoicing structures.
• Corporate income tax: Companies are subject to corporate income tax on their Turkish-source income at the current applicable rate. Quarterly provisional tax declarations and an annual corporate tax return (filed by the end of April for the preceding fiscal year) are mandatory. Practice may vary by authority and year — verify the current corporate tax rate and any applicable exemptions or reductions before relying on any specific tax planning assumption.
• Withholding taxes: When paying rent, dividends, or professional fees, your company may need to withhold tax and report through the monthly muhtasar declaration.
• Electronic systems: Enroll in the Interactive Tax Office system, obtain an electronic financial seal (Mali Mühür) for official filings, and subscribe to e-Tebligat for official communications from tax authorities.

Residency, work permits, and director appointments

Owning or directing a company in Turkey does not automatically grant residency or the right to work in Turkey — these require separate applications.

• Residence permit for company owners: If you want to live in Turkey to run your business, you must apply for a residence permit. While there is no specific investor permit for standard company formation, you can apply under the short-term residence permit category supported by company documentation. The permit permits residence, but does not automatically entitle you to work as an employee in Turkey.
• Work permit for foreign directors and partners: Foreigners actively managing a Turkish company should hold a work permit. If you hold significant shares (typically 20% or more), you can apply as a company executive. Work permit eligibility criteria include minimum capital, turnover, and employment thresholds. Practice may vary by authority and year — verify current work permit eligibility criteria for company shareholders and directors with the Ministry of Labor before relying on any specific threshold.
• Director appointments: You can appoint foreign directors in your Articles or by subsequent resolution. Active directors working physically in Turkey should have a valid work permit. Using a local Turkish partner or attorney as initial manager is a common approach for founders who are not yet based in Turkey.
• Personal liabilities of directors: Directors must comply with Turkish tax law, accounting obligations, and SGK requirements. Serious breaches — including unpaid tax or social security premiums — can lead to personal liability and, in some cases, travel restrictions.
• Citizenship by investment: Turkey has a citizenship by investment program for substantial investors. The current investment thresholds and qualifying investment categories should be verified directly with the relevant government authority, as eligibility conditions are subject to change. Our team can advise on qualification if your planned investment may meet the applicable criteria.

For a detailed analysis of residence and work permit procedures specific to foreign company owners, see our resource on types of residence permits in Turkey.

Common mistakes when establishing a company in Turkey

• Insufficient research and planning: Some investors begin incorporation without fully understanding local regulations or their specific sector's licensing requirements. Consulting a Turkish Law Firm or qualified corporate advisor before starting avoids costly structural changes later.
• Attempting the process without local help: Trying to handle the process without local professional assistance leads to errors in document preparation, registry filings, and deadline management. An English speaking lawyer in Turkey familiar with the process significantly reduces setup time and the risk of rejection.
• Underestimating working capital needs: Official minimum capital requirements are low. Working capital for real operations — office rent, initial payroll, supplier deposits, and licensing fees — is typically substantially higher. Plan your finances realistically.
• Ignoring ongoing compliance obligations: Forming the company is step one. Failure to update registry records for address or management changes, or to file required tax and SGK declarations on time, generates penalties. Registry changes must generally be made within 30 days of the relevant corporate decision.
• Delaying accountant appointment: Failing to hire a qualified Turkish accountant (SMMM or YMM) before the company becomes active results in missed filings and incorrect initial bookkeeping. An accountant should be appointed before or immediately after incorporation.
• No shareholders' agreement: Where there are multiple founders, a private shareholders' agreement covering roles, rights, and exit mechanisms supplements the Articles of Association and prevents deadlocks and disputes. This document should be prepared alongside the formation documents, not after a dispute arises.
• Overlooking work permit requirements: Operating as a director in Turkey without a valid work permit — even for a company you own — can lead to administrative fines. Address work permit needs for any actively working founder from the outset.

Annual obligations, reporting, and corporate governance

After your company is operating, maintaining proper compliance is an ongoing process. Practice may vary by authority and year — verify all current deadlines, thresholds, and requirements with your accountant or legal advisor before each reporting period.

• Annual General Meeting (AGM): For JSCs (A.Ş.), you are legally required to hold an AGM within three months after fiscal year-end (typically by end of March). AGM minutes must be notarized and filed with the Trade Registry. For LLCs, annual written resolutions documenting shareholder decisions satisfy the governance requirement.
• Annual maintenance of statutory books: Update your share ledger and decision book (karar defteri). Notarize the closing of the journal and ledger at year-end so new pages open for the following year — this ensures compliance with statutory bookkeeping requirements under the Turkish Commercial Code.
• Tax filings: Monthly VAT and withholding tax declarations; monthly SGK declarations; quarterly provisional corporate tax returns; annual corporate tax return and financial statements filed with authorities.
• Independent audit (if required): Companies exceeding defined size thresholds must appoint an independent auditor at the AGM and file the audit report with authorities. Verify current thresholds annually, as they are adjusted periodically.
• E-TUYS reporting: Companies with foreign ownership must submit annual foreign investment data (capital amounts, shareholder changes) via the E-TUYS system to the Ministry of Treasury — this is a mandatory ongoing obligation for foreign-owned entities.
• Corporate governance: Keep personal and business finances strictly separate; document major decisions in dated board or shareholder resolutions; declare dividends formally; renew licenses; and update all registry entries within the statutory timeframe for any change in management, address, or capital.

How Istanbul Law Firm supports international clients

Istanbul Law Firm — operating as ER&GUN&ER — guides foreign investors through company formation in Turkey from structure selection through post-incorporation compliance. Our approach is client-centric: we aim to be a long-term partner in Turkey rather than a one-time service provider.

Our English speaking lawyer in Turkey team communicates fluently with international clients, prepares bilingual legal documents, and ensures that every filing complies with Turkish civil procedure and commercial law. We offer remote incorporation services through power of attorney for clients who cannot be physically present in Turkey, and we manage all notary appointments, trade registry filings, and tax registration steps. For clients who have already incorporated and need a compliance health check, we offer a structured review of corporate books, registry records, and ongoing filing status. Contact us to discuss how we can support your Turkish business setup.

Frequently Asked Questions

• Can foreigners fully own a company in Turkey? Yes. 100% foreign ownership is allowed in Turkish companies under the Foreign Direct Investment Law. You do not need a Turkish partner.
• How long does it take to establish a company? With all documents ready, incorporation can typically be completed in 1–3 business days through the MERSIS system, particularly with a power of attorney arrangement.
• What is the minimum capital requirement? For an LLC: 50,000 TL. For a Joint Stock Company: 250,000 TL (25% must be paid before registration). Practice may vary — verify current minimums before proceeding.
• Can I open a Turkish company remotely? Yes. With a notarized and apostilled Power of Attorney, your lawyer can handle the entire process in Turkey on your behalf.
• Is a residence permit automatically granted when I start a company? No. You must separately apply for a residence permit, supported by company documents and other required materials.
• Do I need a work permit to be a company director? If you are actively working in Turkey, yes. Passive board members who remain abroad may be exempt. Verify the current work permit requirements with the Ministry of Labor.
• What taxes will my company pay? Corporate income tax at the current applicable rate, VAT at applicable rates, withholding taxes on dividends, rent, and certain payments, and employer SGK social security contributions. All rates are subject to change — verify current figures with a qualified Turkish accountant.
• What are the annual maintenance obligations? Monthly tax and SGK filings; quarterly provisional corporate tax returns; annual corporate tax return; AGM (for JSCs); statutory book maintenance; Trade Registry updates for any changes; E-TUYS reporting for foreign-owned entities.
• Can I hire employees right away? Yes. Register employees with SGK before they begin work, and issue written Turkish-language employment contracts. Payroll, tax withholding, and labor law protections apply from the first hire.
• Should I choose an LLC or JSC? LLCs are simpler and well-suited for closely-held businesses. JSCs offer easier share transfer, better fit for external investment rounds, and the option of public listing. The choice depends on your governance, investor, and exit profile. See our comparative guide on LLC vs. joint stock company in Turkey.
• Is a Turkish company eligible for citizenship by investment? Only if the investment meets the applicable threshold and qualifying conditions. Requirements are subject to change — verify current eligibility criteria with the relevant government authority.

Author: Mirkan Topcu is an attorney registered with the Istanbul Bar Association (Istanbul 1st Bar), Bar Registration No: 67874. His practice focuses on cross-border and high-stakes matters where evidence discipline, procedural accuracy, and risk control are decisive.

He advises individuals and companies across Commercial and Corporate Law, Citizenship and Immigration, Real Estate Law, and foreign investment matters where procedural accuracy and international coordination are decisive.

Education: Istanbul University Faculty of Law (2018); Galatasaray University, LL.M. (2022). LinkedIn: Profile. Istanbul Bar Association: Official website.