Are you considering expanding your business to Turkiye? With its growing economy, strategic geopolitical position, and a skilled workforce, Turkiye offers great opportunities for companies looking to establish their presence in the region. However, setting up a business in a foreign country can be a complex process, especially when it comes to understanding the legal framework, selecting the right business structure, and completing the necessary documentation.
In this comprehensive guide, we will walk you through the steps of setting up a business in Turkiye, with a particular focus on the needs of foreign investors. We will provide you with valuable insights into the legal requirements, business structures available, documentation needed, registration steps, operational considerations, timeframes, costs, and more. By the end of this guide, you will have a clear understanding of what it takes to establish a successful business entity in Turkiye.
Understanding the Legal Framework
Before diving into the intricacies of business setup in Turkiye, it is essential to familiarize yourself with the legal framework that governs business operations in the country. The Turkish Commercial Code (TCC) serves as the primary legislation for companies in Turkiye, outlining the rules and regulations related to their establishment, management, and employment procedures.
To comply with the legal requirements and ensure a smooth business setup process, it is mandatory for companies to register with the Trade Registry. This step establishes the legal recognition of your business entity and ensures compliance with the necessary conditions for operating in Turkiye.
Selecting the Business Structure
Choosing the right business structure is a crucial decision when setting up a business in Turkiye. Different business structures have varying requirements and implications, so it is essential to understand the options available and select the one that best suits your business goals and needs.
The most common business structures in Turkiye include:
- Limited Liability Company (LLC): LLCs are suitable for small to medium-sized businesses. They require a minimum paid-up share capital of €3,300 and offer limited liability protection to shareholders.
- Joint Stock Company (JSC): JSCs are more suitable for larger-scale business operations. They require a minimum authorized capital of 50,000 liras and at least five founders. JSCs offer the advantage of being a publicly traded company.
- Branch and Representative Offices: If you are a foreign company looking to establish a presence in Turkiye without engaging in direct sales, setting up a branch or representative office can be a viable option.
Each business structure has its own advantages and considerations. It is crucial to carefully evaluate your business objectives, financial capabilities, and long-term plans before making a decision.
Documentation for Starting a Business in Turkiye
Starting a business in Turkiye, whether as a foreign investor or a local entrepreneur, requires specific documentation. The required documents vary depending on whether the shareholder is an individual or a legal entity. Let’s take a closer look at the documentation needed for each case.
For Individual Entrepreneurs
If you are an individual entrepreneur looking to establish a business in Turkiye, the following documentation is typically required:
- Power of Attorney: If you are not physically present in Turkiye during the registration process, a power of attorney is necessary to authorize someone to handle the procedures on your behalf.
- Passport Photos: You will need a few recent passport-sized photos for official use.
- Notarized Passport Copies: Copies of your passport, notarized for identity verification purposes during the business setup process.
- Proof of Capital: Bank statements or other financial documents demonstrating that you possess the necessary funds to start and operate the business.
For Legal Entities
If you plan to establish a business in Turkiye through a legal entity, the required documentation may include:
- Board Decisions: Official resolutions from the board of directors or governing body of the legal entity, approving the establishment of the business in Turkiye.
- Passport Copies of Founders: Passport copies of all founders involved in the business setup process.
- Tax Information: Your company’s tax registration details, including the tax identification number.
- Registration Application: A formal application submitted to the relevant authorities to initiate the business setup process.
- Notarized Signatures: Notarized signatures of any local representatives or authorized signatories involved in the establishment process.
- LLC Registration Declaration & Directors’ Photos: A registration declaration specific to LLCs, signed by the founders, along with photographs for identification purposes.
- Proof of Registered Address: Documentation confirming the business’s operational base and registered address.
- Foreign Entity Registration Certificate: If the legal entity is registered abroad, a certificate verifying its legal status is usually required.
- Business License & Articles of Association: Depending on the nature of your business, specific business licenses and articles of association may be necessary.
- Passports of Founders: Copies of passports for all founders involved in the business setup, including any Turkish representatives.
These are just some of the essential documents required for starting a business in Turkiye. It is crucial to consult with legal professionals and follow the specific requirements outlined by the relevant authorities.
Registration Steps
Once you have gathered all the necessary documentation, you can begin the registration process. The following steps will guide you through the registration process:
- Submit Memorandum and Status Online: Utilize the central information system for Turkish business registration, known as Mersis, to submit the necessary information and documents.
- Reserve Company Name: Ensure that the trading name you choose is unique and complies with the regulations set forth by the Turkish authorities.
- Notarize Company Documents: The articles of association and other relevant company documents must be notarized for legal validity.
- Open a Bank Account: Establish a business bank account in Turkiye to manage your finances and facilitate business transactions.
- Deposit Capital: A portion of the capital must be deposited into the Competition Authority’s account, as required by the Turkish legislation. At least 25% of the startup capital must be paid before the registration process.
- Apply for Commercial Register Entry: Once all the necessary steps have been completed, apply for commercial register entry to obtain legal recognition for your business entity.
Operational Considerations
Setting up a business entity in Turkiye involves more than just completing the registration process. There are several operational considerations that you need to keep in mind to ensure the smooth functioning of your business. Here are a few key points to consider:
- Legal Books Certification: On the day of registration, it is essential to obtain legal books certification from the Trade Registry Office. These books will be used to record important company information and transactions.
- Follow-up with Tax Office: It is crucial to follow up with the relevant tax office to confirm your company’s establishment and comply with any tax-related obligations.
Time and Cost
The time and cost involved in setting up a business in Turkiye can vary depending on various factors. Here is a general overview:
Timeframe:
- For Local or Present Partners: If all partners are situated in Turkiye, the business setup process can be relatively quick. You can expect to register your company and access banking services within 1 to 2 days.
- For Foreign or Absent Partners: If you are a foreign investor or establishing a business in Turkiye from abroad, the process may take longer. Be prepared for a potentially longer timeframe and additional costs.
Cost:
- General Cost Estimate: The cost of setting up a business in Turkiye typically ranges between $1,500 and $2,000.
- Specific LLC Costs: If you choose to establish a Limited Liability Company (LLC), which is a common choice for many entrepreneurs, the estimated cost is around $436. This includes notary and translator fees, chamber of commerce charges, accountant and service fees, and tax office registration costs.
It is important to note that these figures are general estimates and can vary depending on the specific circumstances of your business setup.
Opening a Bank Account
Opening a business bank account in Turkiye is a crucial step in managing your business’s financial transactions, payments, and overall financial management. As a foreign investor, you may need to fulfill certain requirements, such as having a work visa, residence permit, or Turkish citizenship. If you do not meet these requirements, you can appoint a Turkish executive director to facilitate the bank account opening process.
Conclusion
Setting up a business in Turkiye can be a rewarding endeavor, but it requires careful planning, adherence to legal requirements, and a thorough understanding of the process. By following the steps outlined in this guide and seeking professional assistance, you can navigate the complexities of business setup in Turkiye successfully.At BND Global, we understand the challenges and intricacies of international business expansion. Our team of experts can provide you with the guidance and support you need to establish your business entity in Turkiye. Contact us today to learn more about our services and how we can help you achieve your business goals.
