A Comprehensive Guide to Company Formation in Turkey
Koca & Ersöz Law Partnership is a dedicated legal consulting firm with over 10 years of experience in facilitating foreign investments in Turkey. Our offices in Istanbul, Berlin, and Cologne serve both local and international companies throughout Turkey in areas including company formation, acquisitions, monthly legal consultancy for companies, contract law, real estate law, investment law, and labor law.
Understanding the challenges that foreign investors might face, we have meticulously created a step-by-step guide for company establishment in Turkey. This guide aims to provide comprehensive support to our international clients, ensuring a seamless experience in navigating the legalities of business setup.
Step by Step Company Registration process in Turkey
- Translation of Passports: The passports of your partners must be translated into Turkish. This should be done by a certified translation agency in Turkey.
- Selection of an Authorized Accountant in Turkey: When setting up your company, you will need an accountant to ensure compliance with fiscal and tax laws in Turkey.
- Preparation of the Articles of Association: The articles of association of the company must be prepared in Turkish. This agreement establishes the general operation of the company, and the rights and responsibilities of the partners.
- Obtaining the Tax Number: A tax number for the company’s shareholders must be obtained from the Turkey Tax Administration.
- Completion of the Company Registration Form: A special form must be filled out to complete the registration of the company. This form is usually available from the Turkey Trade Registry.
- Application to the Turkish Chamber of Commerce: You must apply to the Turkish Chamber of Commerce for your company to be officially recognized and registered. During the application, you will need to complete the relevant forms.
- Preparation of the Commitment Form: A commitment form to be submitted to the Turkish Chamber of Commerce must be prepared. This form contains a declaration regarding the company’s commercial activities.
- Registration of the CEO’s Signature: The signature of your company’s CEO must be officially registered and notarized at the Civil Registry Office.
- Approval of the Articles of Association: The articles of association of the company must be approved by the Civil Registry Office.
- Initial Capital Investment: You must open a bank account to deposit the opening capital of your company. Do not deposit money into another account.
- Having a Quarter of the Company’s Capital in the Account: At least a quarter of the company’s capital must be in the opened account.
- Publication of the Official Gazette: Publish your company’s official gazette. This announces the establishment of your company to the public.
- Preparation of the Lease Agreement and Notification to the Tax Office: Prepare your company’s lease agreement and notify this to the tax office. The tax office sends an inspector to audit your company.
- Obtaining the Tax Plate: You must obtain the company’s tax number, “Tax Plate”, from the relevant office.
- Obtaining a Company Registration Card or Business Card: You must obtain a company registration card or business card for your company to be officially recognized.
- Registration in the Central Registry System (MERSIS): Your company’s documents must be registered in the Central Registry System (MERSIS), and some of the documents must be sent to the Business Registry Office.
“Most Common Types of Corporations in Turkey: Joint Stock Company and Limited Liability Company
In Turkey, the majority of the companies established are joint stock companies and limited liability companies. These two structures, while subject to different rules, share similarities in terms of partnership structure, capital requirements, liability regulations, and management structures.
Joint Stock Company (JSC) in Turkey
A joint stock company can be established by at least one shareholder according to the Turkish Commercial Code, and there is no limitation on the number of shareholders. The basic capital unit of a JSC is called a “share,” and the company’s capital is divided into shares and provided by the shareholders. The minimum capital amount is determined by the Ministry of Trade, and this amount may change over time. Shareholders become partners in the company according to the number of shares they own and have the right to receive dividends, vote, and be candidates for management bodies in proportion to their shares.
The capital and liability regulations of a joint stock company are noteworthy. Shareholders are only liable for the company’s debts up to the amount of the shares they own. This means that shareholders’ personal assets cannot be used as collateral for company debts. The liability of the shareholders is limited to the amount of capital they have invested, and their personal assets are protected from company debts.
In joint stock companies, the general assembly is the highest decision-making body. Shareholders make important decisions about the company’s future, the election of management bodies, and the distribution of profits at the general assembly. General assembly meetings must be held regularly, and shareholders must be informed.
The board of directors operates as a mandatory body in joint stock companies. The board of directors is elected by the shareholders at the general assembly and manages the company’s daily affairs. The chairman and members of the board of directors are determined by the general assembly resolution. The board of directors makes strategic decisions for the company, establishes management policies, and supervises the company’s activities.
Limited Liability Company (LLC) in Turkey
A limited liability company can be established by at least one partner and can have up to 50 partners. In LLCs, capital is provided by the partners, and the minimum capital amount is determined by the Ministry of Trade. The capital of a limited liability company is determined according to the capital shares of the partners, and partners become shareholders in proportion to their contributions to the capital.
The partners of a limited liability company are only liable for the company’s debts up to the amount of capital they have contributed. Personal assets cannot be used as collateral for company debts. This regulation limits the risks of the partners and protects their personal assets from company debts.
In limited liability companies, it is not mandatory to hold general assembly meetings, but a general assembly can be organized by agreement between the partners. Partners can organize meetings to participate in company management and influence decisions. In LLCs, decisions are usually made by the unanimous vote of the partners.
The board of directors is not a mandatory body in limited liability companies. Partners can manage the company’s affairs directly, or a manager can be appointed. The manager manages the daily affairs of the company and acts on behalf of the partners. The manager is appointed by the partners and has the authority to represent the company.
In conclusion, in Turkey, there are two basic types of corporations, namely joint stock companies and limited liability companies. Joint stock companies are generally preferred for large-scale businesses, while limited liability companies are common for smaller businesses with a limited number of partners. Capital and liability regulations, the role of the general assembly, and management structures are important in both types of companies and must comply with relevant legal regulations.
Who We Are, What we do?
“At Koca & Ersöz Law Partnership, we comprehend that establishing a company entails more than just procedural formalities. The groundwork required for a successful business incorporation encompasses an extensive array of legal considerations such as determining the company’s address, drafting and executing lease agreements, employing personnel and preparing employment contracts, ensuring compliance with the Personal Data Protection Law (KVKK), procuring necessary goods or equipment, and developing company contracts, among others. Moreover, a business entity might necessitate specialized legal assistance in areas such as regulatory compliance, intellectual property protection, corporate governance, taxation, and navigating complex legal frameworks.
We understand you.
As foreign entities venture into the Turkish market, it is imperative to recognize that their legal obligations and requirements might vastly differ from their home country. Our proficiency in international law, combined with our in-depth knowledge of Turkish legal systems, places us in a unique position to adeptly guide foreign businesses through the intricate legal landscape in Turkey. Koca & Ersöz Avukatlık Ortaklığı is not only eager but eminently equipped to assist in addressing all the legal challenges that a company might face during its investment and operational phase in Turkey.
As part of our ongoing commitment to providing exemplary legal services, we have meticulously prepared a step-by-step guide for company establishment in Turkey. This guide serves as a preliminary roadmap for foreign entities keen on investing in Turkey.
We invite you to explore our website for further insights and avail yourselves of our expertise for an efficient, compliant, and successful business establishment and operation in Turkey. At Koca & Ersöz Law Partnership, your legal success is our paramount concern.
We offer our legal consulting services at a flat fee or hourly rate. We offer various consultation models! You can inform us about the subject by email or by filling out the form below and request a cost estimate, or call us at +90 212 660 49 00 (Istanbul) or +49 30 677 901 90 (Berlin), or send us a message through our WhatsApp hotline at +90 543 449 49 00 to arrange a consultation appointment.