Foreigners Establishment of a Company in Turkey

Establishment of a Company by Foreigners 2024

Turkey is not only for domestic investors; At the same time, it has a very wide market for foreign investors. The Foreign Direct Investment Law No. 4875 on the subject is based on the principle of equal treatment and allows international investors to have the same rights and obligations as local investors. According to this law, international investors can establish all types of companies specified in the Turkish Commercial Code. However, in the process of establishing a company, there will be some procedures that will vary according to the type of legal entity and company type.

Can You open a company in Turkey as a foreigner?

Who can open a company in Turkey? In accordance with the principle of equality based on Law No. 4875, foreigners can establish any type of company in Turkey that Turkish citizens can establish. Therefore, a foreign citizen can establish any type of company that Turks can establish. However, we should point out that during the old law period, foreigners were only allowed to establish joint stock companies and limited companies. There is no longer any limitation regarding the company point for foreigners. However, each of these companies differs from each other in terms of their establishment processes and characteristics.

Therefore, the types of companies that foreign citizens can establish are:

• Partnership company: -Unlimited liability companies; -Limited partnership; -Ordinary partnership; -Cooperative companies
• Capital companies: - İncorporated company; - Limited liability company (LLC) ; -Limited company divided into capital shares

In addition, a foreign citizen who invests by establishing a company can become a Turkish citizen through investment if he/she meets the necessary conditions. Thus, it will not face any risk of sanctions

Company Establishment Procedure for Foreigners

• It generally takes 2-7 days for foreigners to establish a company in Turkey, depending on factors such as the type of company, the preparation of the articles of association, the status of notary and registration procedures, and the process of obtaining permission from the ministry if necessary. Foreign natural or legal persons are free to make small, medium or large-scale investments without any limitation in terms of company type.
• Foreign investors choosing the most suitable business type especially for their type of activity; It is of great importance to prepare the articles of association of the company, depending on the establishment procedures of each of these types of companies and what the activity will be.
• To establish a company in Turkey, it is sufficient for the foreigner to enter his personal information through the interactive tax office and to obtain a foreign tax number in a few minutes. Foreign real person is requested to write their residence address via interactive tax office. At this point, the requirement for residence to be a work permit or a residence permit has been introduced for the person while the company is in the establishment phase through MERSIS.
• If foreigners want to open a workplace and work on their own name and account, they should apply to our Ministry for a work permit after the establishment procedures of the workplaces in question are completed before the relevant authorities (such as publishing the workplace in the trade registry or chamber of commerce registry gazette and obtaining a tax number). Because, in accordance with the Law No. 6735, it is obligatory for foreign persons to open a workplace to obtain a work permit from our Ministry before starting to work. As a result of the evaluation to be made by our Ministry, it is obligatory for foreigners who are granted a work permit and apply to the relevant municipalities together with these permit documents and request a business license and a work permit.
• Establishing a business and issuing work permits; Our Ministry also grants temporary work permits to foreigners who are business owners or partners, and it is possible for the relevant municipalities to issue a business and working license for these foreigners, taking into account the periods specified in the temporary work permit. Our municipalities do not need to request an Independent Work Permit from foreigners with a temporary work permit.
• In other words, a foreign natural person needs 2 essential requirements for establishing a company in Turkey: notarized passport translation and tax number. If the preliminary preparation stage is carried out, a system registration request will be created through MERSIS with the tax number received and the passport registration made. There is no obstacle to the appointment of the foreign natural person as the sole partner (if it is a joint stock company) or a manager (if it is a limited company).
• After all this, the registration process begins. If the foreign natural person does not know how to speak Turkish, the accompaniment of an interpreter is stipulated at the signing stage. Within the scope of temporary protection, after the establishment of the workplace, provided that they have tax numbers for foreigners working independently under temporary protection, documents showing the activity of the workplace, such as the trade registry newspaper for companies and the relevant chamber registry document for real person merchants, are scanned into the automation system during the application process. must obtain permission.

Conditions for Foreigners to Establish a Company in Turkey

First of all, it should be known that; Foreign real and legal persons establishing a company in Turkey are subject to the same rules as domestic investors. In the establishment, the title of the company, the scope of its field of activity, its headquarters, who will be the manager or representative, capital and shares should be determined by the management. Then, an articles of association should be prepared in accordance with the provisions of the legislation on joint stock, limited, collective, commandite and cooperative companies.

The articles of association are signed by the partners or by the partners' notarized power of attorney and the signatures of the partners or their representatives are notarized. For documents issued outside of Turkey, the apostille annotation must be obtained and approved by the consulate or notary public. Upon the application of the founders to the registry office with the relevant documents, the Trade Registry Office completes the registration process. Upon registration in the trade registry, the company will acquire a "legal personality".

Work Permit for Foreigners to Establish a Company

The work permit of foreigners to establish a company has been updated in the new International Labor Law No.

6735. According to the new law; The obligation to obtain a work permit for the members of the board of directors of joint stock companies who do not reside in Turkey and other foreign partners of limited companies who are not authorized by the company has been abolished. Foreign Direct Investment Law No. 4875 is applied for real and legal persons who make foreign direct investments in Turkey to obtain work permits for foreigners who are partners of the company. However, the owners and partners of companies with foreign capital are not covered by the law numbered 4875. International Labor Law No. 6735 and Implementation Regulation No. 4817 apply to these foreigners.

Work permit applications can be made from within the country if the company partner resides in Turkey, in other cases from abroad through the Republic of Turkey Foreign Representative of the country of citizenship or permanent residence. Domestic applications are made to the Ministry of Labor and Social Security, and applications made from abroad are made to Foreign Representatives. In addition, the foreign company partner who will apply from within the country must have a residence permit for at least 6 months in Turkey.

What is LLC in Turkey?

Limited Liability Company (LLC)  is a company established under a title by one or more persons, whether real or legal entity. Limited companies cannot operate only in banking and insurance fields. The basic capital of limited companies is certain. Capital consists of the sum of basic capital shares.

Establishment of a Limited Company by Foreigners

For each type of company establishment, first of all, the title of the company, the scope of its field of activity, its headquarters, who will be the manager or representative, the capital and shares should be determined by the management, especially the capital issue should be determined.

A limited liability company is a capital company whose capital is determined and divided into shares, and which is liable for its debts only with its assets. Limited company with one partner can be established. The number of partners cannot exceed 50. Limited company partners can be natural persons or legal persons. The basic capital of the limited company is at least 10.000 Turkish Liras. Partners are not liable for company debts. They are only obliged to pay the basic capital shares they have committed and to fulfill the ancillary performance obligations stipulated in the articles of association.

All of its partners can be foreign nationals. In addition, there is no requirement for directors to be Turkish citizens or to be resident in Turkey. The International Labor Law No. 6735, which will replace the Law No. 4817, was published in the Official Gazette on 13 August 2016 and entered into force.

The work permit of foreigners who are partners of the company has been updated in this law. According to this; Joint stock companies; Limited companies to board members who do not reside in Turkey; The obligation to obtain a work permit for other foreign partners who are not authorized by the company has been abolished.

Establishment of a Private Company by Foreigners

According to Article 7 of the Law No. 4817 on Work Permits of Foreigners; "For foreigners who will work independently, an independent work permit may be granted by the Ministry, provided that they have resided in Turkey legally and uninterruptedly for at least five years." This permit allows one to open a sole proprietorship.

It is not possible for foreign real persons to establish a sole proprietorship without a work permit. In addition, foreigners must obtain a 5-year residence permit in order to establish a sole proprietorship in Turkey. After 5 years, since most foreigners apply for Turkish citizenship, they establish a sole proprietorship as a Turkish citizen without the need for an independent work permit. It is possible for a foreign natural person to establish a sole proprietorship.

However, it is not very common in practice. Because, at the end of the period when the foreign natural person acquires the competence to establish a sole proprietorship, he can also apply for Turkish citizenship. Therefore, to be taken into account in the evaluation of the independent foreign work permit; Documents proving that the foreigner's activity will contribute to the national economy and that the foreigner has sufficient income for the activity to be performed must be submitted to the Ministry of Labor and Social Security together with other documents.

An "Independent Work Permit Application Document" is given to the foreigner who is approved to be granted an independent foreign work permit. Independent work permit is valid for "three months" from the date of issue. After establishing the workplace, an independent foreign work permit is given to the foreigner if he/she submits the trade registry record to the Ministry of Labor and Social Security.

Documents Required for Foreigners to Establish a Company in Turkey

If the partner of the firm to be established is a real person, only the notarized copy of the passport translation will be sufficient. At this point, the foreign legal person; "It is required to provide an apostille annotated copy of the tax record in the country in which it is located, 2 copies of the activity certificate with apostille from the chamber of commerce / ministry of commerce in the country where it is located, who will represent the legal entity in the country in which it is located, and apostille annotated documents that allow the establishment and representation of companies.

The foreign legal entity needs a potential tax number. At this point, it is necessary to go to the tax office physically and obtain a tax identification number for the foreign legal entity by hand. However, company establishment procedures are initiated from the chamber of commerce and company establishment procedures continue.

Documents you need to request from abroad:

1- Power of attorney to obtain establishment and potential tax number on behalf of a legal entity

2- Power of attorney to be appointed on behalf of the legal entity

3- Legal entity registry summary

4- Legal entity Decision

5- If the legal person will be in the Board of Directors, the signature statement of the representative who will act on behalf of

6- Real person signature statement if there will be a real person in the Board of Directors

7- In both cases, the letter of acceptance of the person who will be authorized from outside the Company

Documents you need to prepare for the Trade Registry;

• Petition (It should be signed by the company's board of directors or the members authorized to represent, if signed by proxy, the original or certified copy of the power of attorney should be attached, the tax office to which the company will be affiliated should be specified, and it should include the accompanying document.)
• If there is a foreign partner, a copy of the Establishment Notification Form
• Translated, notarized passport copies of foreign natural person partners, a document showing the tax number to be obtained from the tax office or the identification numbers for foreigners, and a notarized residence permit if residing in Turkey If the main contract prepared from MERSIS is to be signed by the partners, the partners must be present at the relevant unit at the appointment time. (If the contract is to be signed by proxy, it is sufficient for the person to come to the power of attorney.)
• If there is an authorized person other than the partners, the authorized person must be present at the relevant unit at the appointment time. The signature statement will be issued in the presence of the company title.
• Bank letter showing the name, surname / title of the partners of the company who deposited money to the bank account opened showing that the minimum amount specified in the law or the articles of association, as well as the amounts deposited by each partner and the total deposited amount (in case of a cash commitment in whole or part of the company's capital) At least ¼ of the nominal value of the shares must be paid before the registration and the remainder within twenty-four months following the registration of the company.)A stand-alone receipt is not accepted.
• Chamber registration statement (It should be signed by the authorities and there should be photos of the partners.)
• The original or certified copies of the expert's report of the court and the expert's appointment letter of the court prepared by the court-appointed expert regarding the determination of the value of the businesses and goods to be taken over during the establishment with the capital in kind invested in the company
• The original of the letter to be taken from the relevant registry stating that there is no restriction on the capital in kind.
• The original document showing that the intellectual property rights of the real estate placed as capital in kind have been annotated to the registries where they are registered.
• Contracts with the company being established and the founders and other persons relating to the establishment, including those relating to the takeover of the month and businesses
• For companies whose establishment is subject to the permission or approval of the Ministry or other official institutions, the original copy of this permission or approval letter Regarding that non-shareholder members of the board of directors accept the duty; Notarized document with signatures. (In this document, the place of residence, nationality, identity number if it is a Turkish citizen, tax number if it is a foreign national or identification number for foreigners should be specified.
• If the legal person is elected to the board of directors, together with the legal person and on behalf of the legal person, the name, surname, address, nationality and T.R. Determination of a foreign natural person on behalf of the legal person with a notarized, certified copy of the authorized body decision of the legal person board member, which includes the identification number (tax number for foreign nationals or identification number for foreigners), and that this foreign natural real person resides in Turkey If applicable, residence permit and a notarized copy of passport with Turkish translation
• In case the member of the board of directors is a foreign legal person appointed from outside the partners, the document containing the current registry records of the legal person (This document is issued by the notary publics in the country where the company is located, by the Turkish Consulate in that country or by the Ministry of Foreign Affairs in Turkey, or by the Agreement on Removal of the Requirement of Certification of Foreign Official Documents. It must be approved in accordance with its provisions and their Turkish translations must be notarized.)
• If there is a foreign legal partner / legal authority, the tax number must be stated in the articles of association.
• If the parents of the underage company partner or any of the parents are partners in the company, the decision to appoint a trustee from the court for the underage partner In customs consultancy companies, notarized customs consultancy permit document of the partners and authorized managers in customs procedures appointed from outside must be submitted.
• If there are municipalities and other local administrations and their unions among the founders of the company to be established, a copy of the Council of Ministers Decision allowing the participation of these organizations

How long Does it Take to Open a Company in Turkey?

It generally takes 2-7 days for foreigners to establish a company in Turkey, depending on factors such as the type of company, the preparation of the articles of association, the status of notary and registration procedures, and the process of obtaining permission from the ministry if necessary. However, it may take up to 3 weeks to complete the bank account opening process.

How much Does it Cost to Register a Company in Turkey?

How much does it cost to start a business in Turkey?  Establishing a company in Turkey is not costly, but the company owner must take into account the fees required when establishing a company, notary fees and the service fee of the Turkish consultancy firm carrying out the transaction (if appointed).