With the contribution of the existing legal regulations and incentives granted time to time, Turkey is amongst the markets where foreign real and legal persons would find it beneficial to operate in by establishing companies. The basis for foreign natural and legal persons to establish a company in Turkey is set by the Foreign Direct Investment Law No. 4875. According to the provisions of article 3/a-1,2 of the Law, foreign investors are free to make foreign direct investments in Turkey, and in this context, foreign investors are subject to equal treatment with domestic investors.
Foreigners can establish any type of company that locals can establish in Turkey. In other words, foreigners can establish any type of company stated in the Turkish Commercial Code or ordinary company types stated in the Turkish Code of Obligations.
Types of Companies That Can Be Establishedin Turkey are as follows:
In this regard, it is important to determine the most suitable company structure in accordance with the scope and objectives of foreign investment and its aims before applying for the establishment of a company, there are documents to be collected and a preliminary preparation stage to accomplish.
Although pre-approval is not required for most company establishments, it is stipulated that companies that will operate in certain fields such as factoring, financial leasing and independent auditing companies must obtain pre-approval from the ministry before their establishment.
Articles of Association
The company's articles of association, is like the spine of the company, and as required by law, is a document prepared and signed in written form by all the shareholders of the company or their proxies, including the names of the company's founders, the company's trade name, subject, purpose, headquarters, representation, the distribution of the profit to be obtained, and the methods to be followed by the company's general assembly. This article of association is generally known as a contract that frames the partners, their capital shares, relations with third parties outside the company, and protects the rights and obligations of the partners at the same time. It is very important that the articles of association is prepared by an expert lawyer in order to prevent possible loss of rights in the future. In this context, our law firm assists its clients in drawing the most appropriate framework in line with their needs.
Establishment of a Company by Foreign Real Persons in Turkey
Foreign tax number (potential tax ID) is the first requirement for a foreign natural person to establish a company in Turkey. For foreigners, it is generally possible to obtain a foreign tax number in a very short time by submitting their personal information through the Interactive Tax Office. In rare cases, it may be necessary to go to the Tax Office in person by proxy. In this regard, our office will be able to assist in providing the necessary support.
When obtaining a tax number from the Interactive Tax Office, the residence information is requested from the foreign natural person. If an address is shown in Turkey, the condition of having a work or residence permit has been introduced. In order to avoid this prerequisite, the residence address of the applicant must be shown outside of Turkey. After obtaining the potential tax number, the foreign natural person can be appointed as the sole partner or manager of the company to be established or existing.
Another document that is deemed to be necessary is the notarized and -if sent from one of the countries with apostille equivalence- apostilled passport copy.
With the tax number received and the passport registration made, a request is created through the Central Registry System (“MERSİS”) and the articles of association is registered with the other necessary documentation. At the end of this process, the registration process begins.
Establishment of a Company by Foreign Legal Persons in Turkey
Establishment of a company in Turkey by foreign legal persons, requires further detailed documents compared to foreign real persons. Here, in order to ensure the validity of notarized documents sent from outside of Turkey, there is also an obligation to include an apostille annotation if they are sent from countries with apostille equivalence.
A foreign legal entity is required to provide a notarized and apostilled copy of the tax record in the country in which it is located, and 2 copies of notarized and apostilled the activity certificate, the apostille annotated documents and signature declarations that authorize the establishment of a company and representation, and who will represent the legal entity in Turkey in the country in which it is located.
For foreign legal entities, it is necessary to physically go to the tax office and obtain a potential tax identification number. Subsequently, the company establishment procedures are initiated from the chamber of commerce and the company establishment procedures continue in their normal course.
In order to encourage investors, some procedures have been simplified for foreigners who want to establish a company in Turkey and some privileges have been granted to these people. Foreigners who work with a work permit for five years gain citizenship at the end of five years, they also have the right to work for themselves and residence permits for their family members. The foreigners in question can benefit from low tax rates and incentive practices and transfer their business income abroad, provided that their taxes are paid.
Again, for both foreign real and legal persons; a bank account must be opened a in order to deposit the capital and receive the blockage letter
In all these company establishment processes, attention should be paid to PDPL compliance, VERBIS registration and commercial electronic message regulation compliance.In the process of establishing a company by foreigners, attention should be paid to even the smallest detail and companies should be established in accordance with the law, their mandatory books should be provided in full and their interim approvals should be made in the following processes.
In order to carry out the process properly and to obtain the required documents completely and without errors, legal assistance should be obtained from experienced lawyers who are experts in this field. Since a deficiency or mistake will affect the already long process even more negatively.
As a result, in Turkey, where foreign and domestic shareholders are treated equally; Gür Law will be able to assist in the fastest and most practical way to complete the company establishment process, following the planning and preparation of documents in line with the needs.
For more detailed information, please do not hesitate to contact us.