STARTING A BUSINESS IN TÜRKİYE: WHAT YOU NEED TO KNOW
Legal Base
Local and foreign investors share the same rights and liabilities in Türkiye.
The rights of foreign investors are regulated by the Foreign Direct Investment Law No. 4875, which aims to encourage and protect international investors. As per the relevant law, unless otherwise stipulated by international agreements and special law provisions;
Foreign investors are free to make direct foreign investments in Türkiye.
Foreign investors shall be subject to equal treatment with domestic investors.
Expropriation and Nationalization
As per the legislation in force, foreign direct investments shall not be expropriated or nationalized unless deemed necessary for the public interest and the investments are compensated.
Transfers
Net profit, dividends, proceeds from the sale or liquidation of all or any part of an investment, compensation payments, amounts arising from the license, management, and similar agreements all of which arise from foreign investors’ activities and operations in Turkey, and reimbursements and interest payments arising from foreign loans, can be transferred abroad freely through banks or private financial institutions.
WHY TÜRKİYE?
The rapidly developing economy of Türkiye, its geostrategic importance, and unique opportunities have made it an attractive investment destination for investors from across the globe. For those who want to invest from scratch or commission projects to expand their investments, Türkiye offers extremely comprehensive investment incentive programs that are low-cost and offer advantages in terms of taxes.
The country offers competitive R&D incentives to hundreds of leading global companies in the automotive, energy, and retail industries. Nevertheless, companies located in many regions of Türkiye can benefit from tax exemptions in many Free Zones.
COMPANY TYPES AND COMPANY FORMATION PROCESSES
Starting a Business in Türkiye
According to the Turkish Commercial Code Act, Code No. 6102, the company types are divided into two as capital stock companies and commercial companies. We can add liaison offices that are founded with special permission under the Foreign Direct Investment Law to the said division. Joint-stock companies, limited liability companies, and partnerships limited by shares are called capital stock companies. The shareholders of a capital stock company have the liability only to the extent of the capital amount they committed. On the other hand, ordinary limited partnerships and collective companies make up sole proprietorships. In a sole proprietorship, the principle of second-degree unlimited liability regarding company debts applies to the partners.
The formation of these company types, their basic qualities, and operation principles are regulated in the Turkish Commercial Code No. 6102, while the operation principles of cooperatives are governed by the Cooperative Law No. 1163.
International investors have the same rights and liabilities as Turks, and as a foreigner, you can establish any company set out in the Turkish Commercial Code (TCC).
Types of Companies
Corporate
- Joint Stock Company (A.Ş.)
- Limited Liability Company (Ltd. Şti.)
- Cooperative Company
Non-corporate
- Collective company
- Commandite company
- Sole Trader
Start-up and registration costs include; drafting and notarizing the company documents, such as articles of association, signature declarations, founders’ declaration, power of attorney and their translations; stamp tax, the tax registration certificate and getting legal books certified at a notary public; capitals to be deposited to the Competition Authority and in the company bank account; and the incorporation fee for the Trade Register.
TURKISH TAX SYSTEM
Main taxes in Türkiye
In Türkiye multi-tax system is applied. The Turkish tax regime can be classified under three main headings
I) Income Taxes
Corporate Income
Taxes Individual Income Taxes
II) Taxes on Expenditure
Value Added Tax
Special Consumption Tax
Banking and Insurance Transaction Taxes Stamp Duty Tax
Special Communication Tax
Tax on Wagering
Tax on Customs
III) Taxes on Wealth
Inheritance and Gift Taxes
Property Tax
Motor Vehicle Tax
