Doing Business in Turkey
Turkey has become an attractive hub for foreign investors due to its strategic location, strong economy, and investment-friendly policies. Positioned at the intersection of Europe, Asia, and the Middle East, Turkey offers significant opportunities for those looking to invest, thanks to its young and dynamic workforce, government incentives, and advanced infrastructure. Doing business in Turkey is facilitated by a free-market economy and a legal framework that encourages foreign direct investment.
Can a Foreigner Set Up a Company in Turkey?
One of the most common questions asked by international entrepreneurs is: “Can a foreigner set up a company in Turkey?” The answer is yes. Under the Foreign Direct Investment Law (Law No. 4875), foreign investors are granted the same rights and obligations as local entrepreneurs. Company formation in Turkey allows foreigners to establish businesses independently or with Turkish partners, and they are not required to have a residence or work permit for the incorporation process.
Company Types in Turkey
When considering how to open a business in Turkey, investors must determine the most suitable legal structure for their operations. Company types in Turkey include:
A Limited Liability Company (LLC) can be established with a minimum of one and a maximum of fifty shareholders, with a required minimum capital of 50,000 TRY. Shareholders are liable only to the extent of their capital contribution. At least one of the shareholders must act as a company director. If the appointed director is a foreign national, a Turkish business visa and work permit are required.
A Joint Stock Company (JSC) requires a minimum of one shareholder and has no upper limit. The minimum capital requirement is 250,000 TRY. Shareholders are responsible only for the amount of their capital investment. A board of directors governs the company, and shareholders are not required to be members of the board. If a foreign national serves on the board and does not reside in Turkey, a work permit must be obtained.
A Branch Office can be established as an extension of a foreign legal entity without independent legal personality. No capital investment is required, and the parent company bears full liability. The branch is managed by a local or foreign-appointed director who must obtain a work permit if they are not a Turkish citizen. However, given the complexity and costs of establishing a branch, foreign investors often prefer to open a company in Turkey through a locally registered LLC or JSC.
A Liaison Office allows foreign legal entities to operate in Turkey for non-commercial purposes such as market research, promotional activities, and regional coordination. While no capital investment is required, the office cannot engage in direct trade.
Company Formation Process in Turkey
The company formation process in Turkey involves several legal steps. Before proceeding with company registration in Turkey, the following aspects must be clarified: the company’s business scope, shareholder structure, and whether the managing director(s) will reside in Turkey.
Incorporation begins with document preparation, which differs depending on whether the shareholders are individuals or corporate entities. Foreign investors are advised to consult with legal experts prior to traveling to Turkey to ensure that necessary documents, such as notarized and apostilled copies of passports and company incorporation certificates, are prepared in advance.
For a company registration in Turkey involving foreign natural persons, documents such as notarized passport copies, proof of residence, and, if applicable, a Turkish business visa are required. If the company is registered without the investor being physically present in Turkey, a notarized and apostilled power of attorney is mandatory.
For a company formation in Turkey involving foreign corporate shareholders, an apostilled certificate of incorporation, articles of association, and shareholder structure document must be submitted. Consulting legal professionals in advance can expedite the process and prevent compliance issues.
The next step involves drafting the Articles of Association, specifying the company type, ownership structure, and business activities. If a Joint Stock Company (JSC) is formed, one-quarter of the capital must be deposited into a bank account before registration. However, for Limited Liability Companies (LLCs), such a requirement does not exist.
Once all documents are in order, the company is registered with the Turkish Trade Registry Office through the MERSIS system. Upon successful registration, the company receives a Trade Registry Gazette confirming its legal status.
Following incorporation, an official company seal must be issued at a notary, and the company director(s) must sign a specimen signature for future legal and tax transactions. The company must also be registered with the Turkish Tax Authorities to obtain a tax identification number.
How Much Does It Cost to Open a Company in Turkey?
How much does it cost to open a company in Turkey? The financial requirements depend on the company type, industry, and location. The mandatory minimum capital for Limited Liability Companies (LLCs) is 50,000 TRY, while for Joint Stock Companies (JSCs), it is 250,000 TRY. Branch offices and liaison offices do not have capital requirements.
In addition to capital investment, foreign investors should account for notary fees, translation costs, trade registry fees, tax registration expenses, and financial consultancy fees.
For investors seeking a Turkish business visa, work permit requirements mandate a minimum paid-in capital of 500,000 TRY. Companies with over 100,000 USD in paid-in capital generally have a smoother process when applying for work permits for their executives.
Taxation in Turkey
Taxation in Turkey varies depending on the nature of the business. The corporate income tax rate is 25% as of 2025, though specific industries and investment projects may benefit from tax incentives.
Value-Added Tax (VAT) rates in Turkey range from 1% to 20%, depending on the goods and services involved. Companies must comply with tax reporting obligations, including monthly VAT declarations, corporate tax returns, and employee payroll taxes.
Investment Incentives in Turkey
To attract foreign direct investment, the Turkish government provides investment incentives in Turkey, including:
- Corporate tax reductions for certain industries and strategic investments
- VAT and customs duty exemptions for imported machinery and equipment
- Land allocation for large-scale investments
- State grants and subsidies for research and development (R&D) projects
- Social security premium support for companies hiring Turkish employees
Turkey has also signed over 90 double taxation agreements to prevent investors from being taxed twice on the same income.
Conclusion
How to open a business in Turkey? The process involves several legal and financial considerations, but with expert guidance, foreign investors can establish a company efficiently. Whether setting up an LLC, JSC, branch, or liaison office, understanding the company formation process and complying with taxation in Turkey regulations is essential for long-term success.
For international entrepreneurs asking “How can I start my own business in Turkey?”, the key is to ensure compliance with local regulations, choose the right company types in Turkey, and leverage investment incentives in Turkey. Seeking professional consultancy can simplify company registration in Turkey, reduce costs, and accelerate business operations.