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Company Formation

Company Formation with Foreign Shareholders

Documents from abroad, company formation, E-TUYS notifications, and capital and profit transfers when foreign individuals or legal entities set up a company in Türkiye or become shareholders in an existing Turkish company.

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Overview

Under the Foreign Direct Investment Law (Doğrudan Yabancı Yatırımlar Kanunu), foreign investors are individuals who are citizens of a foreign country, Turkish citizens residing abroad, legal entities established under the laws of foreign countries, and international organisations. Setting up a new company, opening a branch, or becoming a shareholder in an existing company by acquiring shares outside the securities exchanges counts as foreign direct investment. For acquisitions made on securities exchanges, a shareholding of at least 10% or voting rights at the same ratio is required. (Foreign Direct Investment Law No. 4875, Art. 2/b)

Unless international agreements or special laws provide otherwise, foreign investors may invest freely in Türkiye and are subject to equal treatment with domestic investors. Amounts such as net profit, dividends, and sale and liquidation proceeds can be transferred abroad freely through banks or special finance institutions. (Law No. 4875, Art. 3)

At KEYBIZ CPAs & Advisors, we provide advisory services on the formation of companies with foreign shareholders, the preparation of documents issued abroad, E-TUYS notifications (E-TUYS is the Ministry of Industry and Technology’s electronic incentive and foreign capital information system), and accounting and tax arrangements after formation. For the general steps of company formation, see our Limited Liability and Joint Stock Company Formation in Türkiye page.

E-TUYS Notifications

NotificationDeadline
Initial RegistrationAfter the user is authorised, the “Investor”, “Shareholder List” and, if any, “Affiliates” fields are completedNo later than 1 month from authorisation
Activity InformationActivity Information Form for Foreign Direct Investments (Annex 1, EK-1)Every year, by the end of May at the latest
Capital ChangeThe “Shareholders List” is updated when capital is increased or decreasedNo later than 1 month
Capital PaymentsCapital Information Form (Annex 2, EK-2) for payments related to a capital increase or share transferWithin 1 month following the payment
Share TransferThe “Shareholders List” is updated for share transfers between shareholders or to third parties in a company covered by the LawNo later than 1 month from the share transfer
Foreign Shareholder Entry into a Domestic Company by Share TransferA company that comes under the Law because a foreign investor becomes a shareholder by taking over shares completes the initial registration informationNo later than 1 month from the share transfer
Foreign Shareholder Entry into a Domestic Company by Capital IncreaseA company that comes under the Law because a foreign investor from outside the company participates in a capital increase completes the initial registration informationThe Regulation also sets a 1-month period for this case; it describes the start of the period as “the completion of the share transfer” and does not separately state which transaction date applies in a capital increase (Implementing Regulation of the Foreign Direct Investment Law, Art. 5)
Limited Liability and Joint Stock Company Formation

Formation Process for a Company with Foreign Shareholders

  1. Determining the Investment Structure

    It is decided whether a new company will be set up, whether the foreign company will open a branch in Türkiye, or whether the investor will become a shareholder in an existing company. The company type, shareholding ratios and management structure are settled at this stage. For the branch option, see our Opening a Branch of a Foreign Company in Türkiye page.

  2. Preparing Documents Specific to Foreign Shareholders

    The lists below show the documents additionally requested from foreign shareholders when a new limited liability company (Limited Şirket) or joint stock company (Anonim Şirket) is registered at formation in Istanbul. The petition, chamber registration declaration, articles of association and capital-related documents required in every formation are prepared in addition to these; where there is a foreign shareholder, a formation notification form is also completed. (Istanbul Chamber of Commerce (İTO), joint stock and limited company formation registration)

    Foreign individual shareholder:

    • Notarised Turkish translation of the passport
    • A document obtained from the tax office showing the tax identification number (vergi kimlik numarası) or the identification number for foreigners (yabancılara mahsus kimlik numarası); this number appears in the articles of association
    • Notarised residence permit document, if the shareholder resides in Türkiye
    • If the process is handled through a proxy, the original or a notarised copy of the power of attorney that includes authority for the formation
    • If the shareholder will also be a manager, board member or person authorised to represent the company, a signature declaration; for managers who are not shareholders, a declaration of acceptance of office

    Foreign corporate shareholder: A document showing the legal entity’s current registry record. If the persons authorised to represent it do not appear in this document, a supplementary document showing the authority of representation is added.

    Tax number: The tax identification number obtained in Türkiye by the foreign legal entity is stated in the articles of association.

    Representative: The identity details of the representative who will sign the articles of association and a document showing the authority of representation are prepared; if the process is handled through a proxy, a power of attorney that includes authority for the formation is added.

    If it will be appointed as a manager: If the legal entity will also be appointed as manager (müdür) of a limited liability company or as a board member of a joint stock company, a notarised copy of the resolution of its authorised body is submitted, identifying the individual who will act on its behalf by name, address, nationality and identity or tax number.

    Certification and translation: The form of certification for documents issued abroad depends on the type of document, the country where it was issued and any applicable international agreement. If the country is a party to the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (Apostille Convention), the document is certified with an apostille; if not, it is certified by the consulate of the Republic of Türkiye in that country. If there is a separate agreement between Türkiye and that country that abolishes or simplifies document certification, the procedure follows that agreement. Notarised Turkish translations of documents in foreign languages are added. (İTO, joint stock and limited company formation registration)

  3. Tax Number and Company Formation

    The formation application is prepared through the Central Registry System (MERSİS) and a request number is obtained.

    Registration is carried out by the competent Trade Registry Directorate (ticaret sicili müdürlüğü) where the company’s head office is located.

    The foreign shareholder’s identity or tax number belongs to the shareholder and is shown in the articles of association. The tax registration of the company being formed is separate: the application petition states the tax office to which the company will be attached, and the trade registry directorate forwards the company’s notice of commencement of business to the tax office. (İTO, joint stock and limited company formation registration; Tax Procedure Law No. 213, Art. 153)

    The trade registry directorate sends a copy of the Company and Branch Formation Notification Form completed at formation to the Ministry of Industry and Technology. (Implementing Regulation of the Foreign Direct Investment Law, Art. 4)

  4. E-TUYS Authorisation and Notifications

    The company authorises a user holding a qualified electronic certificate in the Ministry’s Electronic Incentive Application and Foreign Capital Information System (E-TUYS). The notifications in the table are made on time through this user. (Implementing Regulation of the Foreign Direct Investment Law, Art. 5)

  5. Capital, Profit Transfer and Foreign Staff

    • Assets such as cash capital in convertible currency brought from abroad, machinery and equipment, and industrial and intellectual property rights can be brought in as capital. (Law No. 4875, Art. 2)
    • Dividends and other amounts can be transferred abroad freely. (Law No. 4875, Art. 3)
    • If foreign managers or staff will be employed, work permit procedures are assessed under International Labour Force Law No. 6735 (Uluslararası İşgücü Kanunu).

    For details, see our Payroll Services page.

Frequently Asked Questions

Can Foreigners Wholly Own a Company in Türkiye?

Yes. Unless international agreements or special laws provide otherwise, foreign investors may invest freely in Türkiye and are subject to equal treatment with domestic investors. (Law No. 4875, Art. 3/a) Limited liability and joint stock companies can also be set up with a single shareholder.

Are Turkish Citizens Living Abroad Considered Foreign Investors?

Yes. The Law also includes Turkish citizens residing abroad in the definition of foreign investor. (Law No. 4875, Art. 2/a)

In What Forms Can Capital Be Brought In?

Assets such as cash capital in convertible currency brought from abroad, company securities (excluding government bonds), machinery and equipment, and industrial and intellectual property rights, as well as profits and receivables obtained in Türkiye and used for reinvestment, can be used as capital. (Law No. 4875, Art. 2/b)

Can Dividends Be Transferred Abroad?

Yes. Net profit, dividends, proceeds from sale, liquidation and compensation, and payments under licence and management agreements can be transferred abroad freely through banks or special finance institutions. (Law No. 4875, Art. 3/c)

What Are the E-TUYS Notifications?

Initial registration is made within 1 month after user authorisation; the Activity Information Form is completed every year by the end of May; capital changes, capital payments and share transfers are notified within 1 month. (Implementing Regulation of the Foreign Direct Investment Law, Art. 5)

What Happens If a Foreign Shareholder Joins a Domestic Company?

The two cases are treated separately. If the foreign investor becomes a shareholder by taking over shares, the company completes the initial registration information in E-TUYS no later than 1 month from the share transfer. If the foreign investor becomes a shareholder by participating in a capital increase, the Regulation also sets a 1-month period for this case; however, it describes the start of the period as “the completion of the share transfer” and does not separately state which transaction date applies in a capital increase. (Implementing Regulation of the Foreign Direct Investment Law, Art. 5/c)

How Are Documents Issued Abroad Certified?

The form of certification for documents issued abroad depends on the type of document, the country where it was issued and any applicable international agreement. If the country is a party to the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (Apostille Convention), the document is certified with an apostille; if not, it is certified by the consulate of the Republic of Türkiye in that country. If there is a separate agreement between Türkiye and that country that abolishes or simplifies document certification, the procedure follows that agreement. Notarised Turkish translations of documents in foreign languages are added. For this reason, the form of certification is checked separately for each document. (İTO, joint stock and limited company formation registration)

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