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Company Setup in Turkey

Company Setup in Turkey: Legal Steps, Types & Requirements - 2025

Turkey, strategically located between Europe and Asia, offers a dynamic and growing market with a favorable business environment for both local and foreign investors. The Turkish government has simplified company formation procedures and encourages foreign investment through various incentives. This guide outlines the key aspects of how company setting up in Turkey, including legal structures, steps, requirements, and compliance matters.

Table of Contents

Company Setup in Turkey
Company Setup in Turkey

Why Choose Turkey for Business?

Turkey is a rapidly growing economy with a unique geopolitical position, making it an attractive destination for business and investment. Whether you’re a startup, SME, or multinational corporation, Turkey offers numerous advantages that make it a competitive choice for entrepreneurs and investors.

1. Strategic Geographic Location

Turkey serves as a bridge between Europe, Asia, and the Middle East, offering:

  • Access to 1.5 billion consumers across Europe, MENA, and Central Asia.

  • Major trade routes (Istanbul Strait, land corridors for logistics).

  • Free Trade Agreements (FTAs) with 38+ countries, including the EU Customs Union.

2. Strong and Growing Economy

  • GDP: Over $1.1 trillion (2024, PPP-adjusted).

  • Fast-growing sectors: Manufacturing, technology, tourism, finance, and energy.

  • Stable economic policies and government incentives for investors.

3. Business-Friendly Environment

  • Ease of Doing Business: Simplified company registration (can be done in 3 days).

  • Low setup costs (e.g., LLC requires only ~$1,300 in capital).

  • Foreign ownership allowed in most sectors (100% foreign-owned companies permitted).

4. Large and Skilled Workforce

  • Population of 85+ million (young and dynamic workforce).

  • Highly educated talent pool (engineering, IT, finance, multilingual professionals).

  • Competitive labor costs compared to Europe.

5. Government Incentives & Tax Benefits

  • Corporate tax rate: 25% (lower in Free Trade Zones, TechnoParks & R&D sectors).

  • VAT exemptions for exporters & some sectors.

  • Investment incentives (tax breaks, social security support, customs duty exemptions).

  • Grants for R&D and technology investments.

6. Advanced Infrastructure & Logistics

  • Modern transportation (Istanbul Airport, high-speed rail, extensive highways).

  • Thriving industrial zones & tech parks.

  • Well-developed banking & fintech sector.

7. Booming Consumer Market

  • Rising middle class with increasing purchasing power.

  • High demand for imported goods (electronics, automotive, luxury brands).

  • E-commerce growth (over $35 billion market in 2024).

8. Tourism & Real Estate Opportunities

  • 50+ million tourists annually (hospitality, retail, and F&B opportunities).

  • Citizenship by investment (real estate purchases over $400,000 qualify).

  • Citizenship by Setup a company (hire 50 emloyee’)

  • Citizenship by investment on a deposite account or invest to state bonds (amount of $500K)

9. Gateway to Global Markets

  • EU Customs Union (duty-free access to Europe).

  • Trade deals with Middle East, Africa, and Asia.

  • Ideal for export-oriented manufacturing.

10. Quality of Life & Expat-Friendly

  • Affordable living costs (compared to Western Europe/US).

  • Vibrant cities (Istanbul, Ankara, Izmir) with international schools, healthcare, and expat communities.

  • Rich culture, history, and business networking opportunities.

Types of Companies in Turkey

Turkey offers several business structures, each with different legal and financial implications:

A. Limited Liability Company (LLC – Limited Şirket)

  • Minimum Capital Requirement: 50,000 TRY (approx. $1,300).

  • Shareholders: 1 to 50 (individuals or legal entities).

  • Liability: Limited to the company’s assets.

  • Management: Managed by one or more directors (local or foreign).Minimum one of partners shall be director.

  • Suitable for: Small to medium-sized businesses.

B. Joint Stock Company (JSC – Anonim Şirket)

  • Minimum Capital Requirement: 250,000 TRY (approx. $6,500 ).

  • Shareholders: Minimum of 1 (no upper limit).

  • Liability: Limited to the company’s assets for shareholders(Unlimited liability for board members)

  • Management: Board of directors (at least one resident director required for publicly traded companies).

  • Suitable for: Large businesses, publicly traded companies.

C. Branch Office

  • Legal Status: Establishes as an extension of a foreign company or as a separate legal entity.

  • Liability: Parent company is fully liable.

  • Registration: Must be registered with the Turkish Trade Registry.

  • Suitable for: Foreign companies expanding operations in Turkey.

D. Liaison Office / Representative Office

  • Purpose: Market research and promotion (cannot engage in commercial activities).

  • Duration: Limited to a few years (renewable).

  • Suitable for: Foreign companies exploring the Turkish market.

E. Sole Proprietorship

  • Ownership: Single individual.

  • Liability: Unlimited personal liability.

  • Registration: Simple but offers no legal separation between owner and business.

  • Suitable for: Freelancers and small-scale businesses.

Steps to Set Up a Company in Turkey

Step 1: Choose the Type of Entity

Select the appropriate company structure based on business scope and capital requirements.

Step 2: Prepare Articles of Association 

The Articles of Association (AoA) must comply with Turkish Commercial Code

Step 3: Obtain a Tax Identification Number

All shareholders (foreign individuals or entities) and the company to be established must obtain a tax identification number from the local tax office and the company.

Step 4: Deposit Capital

  • At least 25% of the capital must be deposited in a bank account before registration.(For JSC)

  • The rest must be paid within 24 months.

Step 5: Register with the Trade Registry Office

Submit documents to the local Trade Registry. Once approved:

  • The company is officially formed.

  • It receives a registration number.

Step 6: Register with Tax Office and Social Security

  • Apply for tax registration and get a company tax number.

  • Register employees with the Social Security Institution (SGK).

Step 7: Open a Corporate Bank Account

Required for capital deposit and financial operations.

Step 8: Obtain Required Licenses and Permits

Depending on the business field, specific licenses may be required (e.g., tourism, health, construction).

Documents Required & Foreign Ownership

  • Articles of Association (AoA)

  • Founders’ declaration

  • Notarized signatures of company managers

  • Lease agreement or proof of business address

  • Bank receipt of capital deposit for JSCs

  • Passport copies and tax IDs of shareholders

  • Foreign investors can own 100% of a Turkish company.

  • Work Permit is mandatory for foreign directors

  • No special approval required for most sectors.

  • Certain sectors like energy, aviation, or media may have restrictions or require additional permits.

Taxation for Companies in Turkey
Tax TypeRateExplanation

 

Income Tax

 

From 15% up to 40%

It is levied on the income of sole proprietorships. The tax rate is progressive, varying between 15% and 40% depending on income levels.
Corporate Tax25%flat rate

 

VAT (KDV)

 

20% (standard),

1%-10%- 18% (reduced)

reduced rates  applicable to specific goods and services, such as basic food items and medical products.

 

Withholding Tax

 

20%

Withheld from business lease payments and freelance service payments
Post-Registration Requirements
  • E-Ledger: Mandatory for LLC & JSCs.

  • E-Invoicing: Mandatory for almost all businesses.

  • Work Permits: Foreign employees need a work permit.

  • Annual General Meeting (AGM): JSCs must hold an AGM within three months of the fiscal year-end.

  • Hire a CPA or Turkish Accountant: Hire a licensed Certified Public Accountant or an Accountant for your company’s accounting and taxation. It is mandatory for the legal stability of your company.

  • Get a Signature Circular: It is a notarized document that identifies a company’s official representatives and confirms their authority to act on its behalf in legal and official matters.

    Get a  Seal: It is used to verify and standardize official documents, confirm company identity on items like invoices and receipts, formalize contracts, and support official transactions with signatures.

    Apply for E-Notification: It has been made mandatory to apply for e-notification from the relevant institutions for the legal notifications to be made to your company by the tax office and the Social Security Institution.

    Apply for License & Permit: Depending on your field of activity, it is mandatory to obtain a standard business license from your local municipality.

Contact Us For Company Setup in Turkey

Setting up a company in Turkey is a structured process with clear legal requirements. Foreign investors benefit from Turkey’s strategic location, growing economy, and business-friendly policies. Engaging a local legal or consultancy firm can streamline the process and ensure compliance.

Whether you’re setting up a new venture or expanding an existing one, investing in a qualified an consultant is a strategic move that can pay dividends in the long run.

A&M Consulting Co. is recognized as a reputable Business Consulting Firm, renowned for its long-standing commitment to excellence and professional leadership and registered and accredited on TURMOB and as well as ISMMMO in Istanbul of Turkey,

As A&M Consuting Co., We offer offordable and reliable company setting up services, tax and accounting services for individual enterpernuer and global corporate investors who Invest in Turkey with our team of Chartered Accountants stands poised to adeptly manage all facets of your investments and company’s Accounting and Bookkeeping Services in Istanbul market.

DISCOVER OUR SERVICES:

You can reach out to our experienced consultans via email or by filling out the Contact Form on our website’s contact page

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FAQs About Company Setup in Turkey

Yes, foreign individuals and entities can fully own a company in Turkey without needing a local partner.

 A Limited Liability Company (Ltd. Şti.) is the most preferred due to its flexibility, low capital requirement, and simple structure.

  • Limited Liability Company: 50,000 TRY

  • Joint Stock Company: 250,000 TRY

 Typically, it takes 1–2 day, depending on document preparation and approvals.

 No, it’s possible to set up a company remotely through a legal representative with power of attorney.

  • Articles of Association

  • Passport copies of shareholders

  • Tax ID numbers

  • Lease agreement for office

  • Notarized signatures of directors

 Yes, after company registration, you can open a corporate bank account in Turkey.

 Yes, a registered business address in Turkey is mandatory. Virtual address is also available.

 Business’s must pay income or corporate tax, VAT, WHT and submit monthly, quarterhly and annual tax filings.

 Yes, if you’re a foreigner planning to actively manage or work in the company, you must obtain a work permit.

  • Monthly tax filings (VAT, withholding tax)

  • Monthly Social security filings

  • Annual financial reporting and tax returns

  • Quarterly financial reporting and tax returns

  • General assembly meetings at least annual

Yes.

  • Branch: Can perform commercial activities.

  • Liaison Office: Only non-commercial activities (market research, coordination).

 Few sectors like media, aviation, and energy have restrictions or require specific approvals.

 Yes, especially in TechnoParks, free zones, organized industrial zones (OIZs), and strategic sectors.

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