Turkey always welcomes foreign investments and the government supports all the investors as long as they are reliable and ready to meet the requirements. There are many business opportunities in Turkey since it is still a fast developing country and the Turkish economy is in the first twenty economies in the world. In many different fields, there is not enough production due to lack of capital to catch up with the new technological trends in the world. That’s why the government encourages foreign investors to come to Turkey to set up a business here especially manufacturing steps because of low costs. Since 2016, the government looks set to offer people who have or buy property in Turkey the right to work in the country.
Do I Have To Get Help or Can I Do It Myself?
In order to get proper information and to follow every step to set up a business according to the procedure, referring to a consultant and a legal advisor is a must. Consulting a company like ERAI Turkey which followed many cases would be the right decision if you are new to the process.
Besides that, up to date information can be gathered from the Turkish Embassy as well as the related ministry of the possible business field.
ABOUT TRADING NAMES
Please note that the trading name of a company cannot be accepted if it was registered before by someone else and it cannot mislead third parties. “Turkiye, Turk, Cumhuriyet” and “Milli” cannot be used in a company name without special approval of the Turkish Council of Ministers. Foreign names or words can be used if they are not contradicting any government or cultural laws or policies.
Create a Company In Turkey As a Foreigner
According to Article 7 of Law No. 4817; Foreigners who work independently may be allowed to work independently by the Ministry of Labor and Social Security if they have lived in Turkey for at least five years without legal interruption. This permit will allow the person to open a private company as a self-employed person. Otherwise, it is not possible to establish a private company without a working permit. Only the residence permit is not enough. For this reason, after the residence with the residence permit for 5 years, if the work permit is applied, the private company can be established.
The foreigner who is eligible to be granted an Independent Work Permit is given an “Independent Work Permit Application Document”. This document shall be valid for a period of “three months” from the date of issuance.
After establishing the workplace, the foreigner is granted an independent foreign work permit if he/she submits the trade registry to the Ministry of Labor and Social Security.
What Types of Companies Exist in Turkey?
Choose Your Company Type :
There are five different types of companies under the Turkish Commercial Code (TCC) some of which are corporate while the others are non-corporate.
- Corporate forms
- Join Stock Company (JSC)
- Limited Liability Company (LLC)
- Cooperative Company
- Non-corporate forms
- Collective Company
- Commandite Company
Despite some differences in terms of minimum capital and organs, the process of establishment is similar to each other in JSC and LLCs. They are the most comment types of companies both in the global economy and Turkey.
There is also an option of opening a branch office or liaison office, however, they are not considered to be legal entities.
8 Steps To Establish Your Company in Turkey
- Submit the memorandum and articles of association online at MERSIS
MERSIS is a central information system for carrying out commercial registry processes and storing commercial registry data electronically on a regular basis. A unique number is given to legal entities that are actively involved in the business.
- Execute and notarize company documents
- Notarized articles of association (four copies, one original)
- In case the foreign partner is a real person, the required documents are:
– For each real person shareholder, two copies of their passports
- In case the foreign partner is a legal entity, the required documents are:
– The Certificate of Activity of the legal entity designated as the shareholder issued by the relevant authority in the investor’s country. The certificate must bear information regarding the current status and signatories of the company.
– Resolution(s) of a competent corporate organ of legal entity shareholder(s) authorizing the establishment; if there will be any specific condition for the prospective company to be incorporated (name of the company, field of activity, etc.) it must be stated in the resolution for the sake of clarity.
– In case a legal entity is going to be appointed as a member in the board of directors of the prospective company to be incorporated, the name of the real person who will act in the name of the legal entity and the legal entity board member’s appointment must be stated within the same or with a separate resolution for the sake of clarity.
– If the process is going to be followed by proxy, a notarized copy of a power of attorney authorizing the attorneys who will follow up the application before the competent Trade Registry Office and other official authorities in order to proceed with the application (where applicable).
- Notarized signature declarations (two copies)
- Notarized identity cards of the company managers (one copy)
- Obtain potential tax identity number
A potential tax identity number for the company, non-Turkish shareholders, and non-Turkish board members of the company must be obtained from the relevant tax office. This potential tax identity number is necessary for opening a bank account in order to deposit the capital of the company to be incorporated.
- Deposit a percentage of capital to the account of the Competition Authority
Original of bank receipt (from Halk Bank, Ankara corporate branch) indicating that the 0.04 percent of the capital has been deposited to the account of the Competition Authority at the Central Bank of the Republic of Turkey (CBRT) or a public bank, or the EFT receipt signed and stamped “collected”.
- Deposit at least 25 percent of the startup capital in a bank and obtain proof thereof
25 percent of the share capital must be paid in prior to the new company registration. The remaining 75 percent of the subscribed share capital must be paid within two years. Alternatively, the capital may be fully paid prior to registration.
- Apply for registration at the Trade Registry Office
Following the completion of the registration phase before the Trade Registry Office, the Trade Registry Office notifies the relevant tax office and the Social Security Institution ex-officio regarding the incorporation of the company. The Trade Registry Office arranges for an announcement in the Commercial Registry Gazette within approximately 10 days of the company registration. A tax registration certificate must be obtained from the local tax office soon after the Trade Registry Office notifies the local tax office. A social security number for the company must be obtained from the relevant Social Security Institution. For the employees, a separate application has to be made following the registration of the company with the Social Security Institution.
- Certify the legal books by a notary public
The founders must certify legal books the day they register the company with the Trade Registry Office. The notary public must notify the tax office about the commercial book certification.
- 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. A tax officer comes to the company headquarters to prepare a determination report. There must be at least one authorized signature in the determination report. Trade Registry Officers send the company establishment form, which includes the tax number notification, to the tax office.
How To Open a Branch or Liaison Office?
First of all, it should be noted that they are not legal entities, as a result, they do not require capital. A branch office is allowed to repatriate. The profit of branch transferred to the headquarters is subject to dividend withholding tax at a rate of %15 which may be reduced by Double Taxation Prevention Treaties. An application with the necessary documents must be submitted to the relevant Trade Registry Office.
A liaison office’s main activity is to conduct market research and feasibility studies to see the possibilities of a probable investment in the Turkish market on behalf of the parent company. It is not allowed to carry out any kind of commercial activities and they must obtain a permit from the Ministry of Economy, General Directorate of Incentive Implementation and Foreign Investment. The initial permit is issued for three years and can be extended depending on the activities in the past three years and the future plans of the parent company.
It should be noted that all the necessary documents issued and executed outside Turkey must be notarized and apostilled or alternatively ratified by the Turkish consulate where they are issued. The original executed, notarized and apostilled documents must be officially translated and notarized by a Turkish notary.
For any kind of questions do not hesitate to contact us. We are ready to assist you in every step you take to set up a business or any other need of your company!
For further information check the links below.
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