How to Establish a Company in Turkey by Foreigners?

Turkey's strategic location, vibrant economy, and pro-business policies make it an attractive destination for foreign investors. Establishing a company in Turkey as a foreigner involves understanding the legal and financial requirements, company structures, and potential benefits, including pathways to citizenship. This guide will provide a comprehensive overview of the process and opportunities.

Conditions for Foreigners to Establish a Company in Turkey

Foreigners can establish companies in Turkey with the same rights as local citizens, thanks to the Foreign Direct Investment Law (FDI). However, there are essential conditions to meet:

1. Minimum Capital Requirements:some text
   • Limited Liability Companies (LLC): 10,000 TL minimum capital.
   • Joint Stock Companies (JSC): 50,000 TL minimum capital.
2. Registered Address: A physical or virtual office address is mandatory to register the company.
3. Tax Identification Number: Foreign investors must obtain a tax ID from the Turkish Revenue Administration.
4. Authorized Representative: If the founder does not reside in Turkey, appointing a local representative can simplify the process.
5. Necessary Permits: Depending on the sector, additional permits may be required.

Work Permit for Foreigners to Establish a Company

Foreign investors establishing a company in Turkey may also need a work permit, which allows them to manage the business. Here’s how to obtain one:

1. Application Process:some text
   • Apply online through the Ministry of Labor and Social Security.
   • Submit documents, including the company’s registration details and your passport.
2. Types of Work Permits:some text
   • Temporary work permit (valid for one year).
   • Independent work permit for entrepreneurs contributing significantly to the Turkish economy.
3. Exemptions: In some cases, company owners may be exempt from a work permit, especially if they employ a minimum number of Turkish citizens.

Establishment of Limited Liability Companies by Foreigners

A Limited Liability Company (LLC) is one of the most popular structures among foreign investors due to its flexibility and straightforward setup.

• Shareholders: An LLC requires 1-50 shareholders.
• Capital Requirements: Minimum 10,000 TL capital.
• Liability: Limited to the amount invested.
• Process:some text
  1. Reserve a trade name with the Trade Registry Office.
  2. Prepare the Articles of Association.
  3. Submit required documents, including shareholder details and notarized signatures.

Establishment of Joint Stock Companies by Foreigners

For larger investments, a Joint Stock Company (JSC) offers advantages such as issuing shares and attracting investors.

• Shareholders: Minimum of one shareholder, no upper limit.
• Capital Requirements: 50,000 TL minimum capital.
• Management: Governed by a Board of Directors.
• Process:some text
  1. Draft Articles of Association.
  2. Deposit at least 25% of the capital in a bank account.
  3. Register the company at the Trade Registry Office.

Establishment of Sole Proprietorship by Foreigners

A sole proprietorship is suitable for individual entrepreneurs looking for a simple structure.

• Owner: Single individual.
• Capital Requirements: None specified.
• Liability: The owner is personally liable for debts.
• Process:some text
  1. Register with the local tax office.
  2. Obtain a business license if required for your sector.

While easy to establish, this structure does not offer the liability protection of LLCs or JSCs.

What Kind of Company Can a Foreigner Establish in Turkey?

Foreign investors can choose from the following structures based on their business goals:

1. Limited Liability Company (LLC)
2. Joint Stock Company (JSC)
3. Sole Proprietorship
4. Branch Office: An extension of a foreign company.
5. Liaison Office: For non-commercial activities like market research.

Citizenship by Investment for Business Owners

Establishing a company in Turkey can also lead to Turkish citizenship under the Citizenship by Investment Program.

• Eligibility: Invest at least $500,000 in fixed capital or create jobs for 50 Turkish citizens.
• Process:some text
  1. Complete the investment and obtain a certificate of eligibility.
  2. Apply for citizenship through the local Population and Citizenship Directorate.

This opportunity makes Turkey an attractive option for entrepreneurs seeking business growth and long-term residency benefits.