Establishing a Business in Turkey
- written by Dayslegal
- Apr 10, 2018
- 2 min read
Turkey’s FDI Law is based on the principle of equal treatment, allowing international investors to have the same rights and liabilities as local investors.
The conditions for setting up a business and share transfer are the same as those applied to local investors. International investors may establish any form of company set out in the Turkish Commercial Code (TCC), which offers a corporate governance approach that meets international standards, fosters private equity and public offering activities, creates transparency in managing operations and aligns the Turkish business environment with EU legislation as well as with the EU accession process.
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Turkey has introduced reforms with a view to making it easier to do business in order to enhance the investment environment, eliminating red tape in setting up a business and minimizing costs and procedures. To this end, establishing a company is now only carried out at Trade Registry Offices located in Chambers of Commerce and designed to be a ‘one-stop shop’. The process is completed within the same day.
Company Types under TCC and Alternative Forms
There are corporate and non-corporate forms for companies under the TCC, which states that companies may be established under the following types:
a. Corporate forms
Joint Stock Company (JSC),Limited Liability Company (LLC),Cooperative Company
Although some financial thresholds (i.e., minimum capital) and organs differ from each other, the procedures to be followed for establishing a JSC or an LLC are the same.
b. Non-corporate forms
Collective Company, Commandite Company
Although companies may be established according to these five different types, JSC and LLC are the most common types chosen both in the global economy and Turkey.
Establishing a Company
When establishing a company in Turkey, one needs to adhere to the following rules and regulations:
*Submit the memorandum and articles of association online at MERSIS
Pursuant to the Trade Registry Regulation, trade registration transactions must be fulfilled through MERSIS (Central Registry Record System).
*Execute and notarize company documents
The Company documents are required for registry application at the relevant Trade Registry Office.
*Obtain potential tax identity number
The company must obtain potential tax identity numbers for non-Turkish shareholders, and non-Turkish board members of the company from the relevant tax office.
*Deposit a percentage of capital to the account of the Competition Authority
0.04 percent of the company’s capital must be paid to the account of the Competition Authority via Trade Registry Office pay office.
*Deposit at least 25 percent of the startup capital in a bank and obtain proof thereof
25 percent of the subscribed share capital must be paid prior to the new company registration. The remaining 75 percent must be paid within two years. Alternatively, the capital may be fully paid prior to registration.
*Apply for registration at the Trade Registry Office
The founders may apply for registration after gathering the necessary Company documents.
*Certify the legal books
The Trade Registry Office authorized personnel will certify the following books during the establishment process.
*Follow up with the tax office on the Trade Registry Office’s company establishment notification
The Trade Registry Office notifies the tax office and the Social Security Institution of the company’s incorporation.
*Issuance of signature circular
On the day the company is registered at the Trade Registry Office, the signatories of the company must issue a signature circular before the Trade Registry Office authorized personnel.
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