Company Formation in Turkey: Step-by-Step Registration Process
Forming a company in Turkey involves a series of legal and administrative steps. While the process is streamlined compared to the past, it’s crucial to follow all requirements diligently. Here is a step-by-step guide to register a company in Turkey:
Prepare the Articles of Association and Submit via MERSİS:
Every company needs a Memorandum and Articles of Association (AoA) that define its name, address, business activities, shareholders, capital, and management structure. Turkey has standardized templates and guidelines for the AoA. As a first step, you will draft the AoA (typically with a lawyer or consultant’s help to ensure compliance with Turkish law). Then, you must submit the AoA online through the MERSİS portal. MERSİS is the Central Registry Record System (accessible at mersis.gtb.gov.tr) run by the Ministry of Trade. You or your representative will need to create a MERSİS account and input all company details (company name, address, founders’ information, capital, etc.) into the system. MERSİS will generate a unique identification number for the new company and allow you to upload the draft Articles of Association for initial approval. Tip: Before submitting, ensure the proposed company name is unique and not already in use; MERSİS will check name availability. The system also guides you through required fields to ensure the AoA meets legal requirements.
Notarize Required Documents
After the AoA is entered in MERSİS, certain documents must be signed and notarized. If the founders can be physically present in Turkey, the Articles of Association can be signed in front of the Trade Registry officials at the time of registration or signed at a Turkish Notary Public. Key documents to prepare and notarize include:
Articles of Association – one original signed copy (and usually several duplicates) for the Trade Registry records.
Signature Declarations of Company Representatives – these are specimen signatures of the directors or managers who will represent the company, notarized to verify their identity.
Founders’ Declaration and Chamber Registration Forms – standard forms provided by the registry regarding the founders and company details.
Identification Documents – If any shareholder or director is a foreign individual, you will need notarized and translated copies of their passport (and Turkish residence permit, if they have one. Foreign corporate shareholders must provide a notarized and apostilled Certificate of Activity or Good Standing from their home country, plus a board resolution authorizing the investment. These foreign documents must be officially translated into Turkish and notarized in Turkey.
Power of Attorney (if applicable) – If you are not in Turkey, you can appoint a lawyer or another representative to handle the incorporation. This requires giving them a notarized Power of Attorney. Foreign-issued powers of attorney must be apostilled or consularized and then translated into Turkish.
Ensure all foreign documents are properly notarized and apostilled in their country of origin, as Turkey requires this legalization for use in the registration process. Once in Turkey, they must be translated by a sworn translator and notarized again to confirm the translation’s accuracy.
Obtain a Potential Tax Identification Number
Before the company can be officially registered, any foreign shareholder or board member needs a Turkish tax ID number (called a “potential tax number” for non-residents). This number is required for various steps such as opening a bank account for capital deposit and for tax registration of the company. To get these tax numbers, you (or your representative) will apply at the local tax office (or online via the Revenue Administration’s system). The documents typically needed are a simple petition form, a copy of the draft Articles of Association, and identification for the foreigners (e.g. passport copy). The tax office will issue a Potential Tax ID on the spot or within a day. This number does not mean you owe any taxes yet; it’s just an identifier for the individuals in the system. Each foreign shareholder and director should obtain one. (If a foreign shareholder is a legal entity, that entity will also get a tax number for the company registration process.)
4. Deposit Capital and Competition Authority Fee: If you are establishing a Joint Stock Company, you must deposit at least 25% of the share capital in a Turkish bank account prior to registration. The bank will issue an official letter or receipt as proof of the paid-in capital, which you will include in your application to the Trade Registry. (For LLCs, this upfront deposit is not required by law – LLC capital can be paid within 24 months after incorporation. Still, some LLC founders voluntarily deposit some capital initially to show good faith and have initial working funds in the account.) Additionally, Turkey imposes a small incorporation charge for the Competition Authority: 0.04% of the company’s capital must be paid to a designated account of the Competition Authority. This amount is very minor (for example, on a capital of 50,000 TL, 0.04% is only 20 TL) and is usually paid at the Chamber of Commerce’s cashier desk during the registration filing. You will receive a receipt for this payment which is also included in the application file.
Apply for Registration at the Trade Registry
With all documents ready (AoA, notarized signatures, tax IDs, bank deposit receipt, Competition Authority payment receipt, etc.), the founders or their agent submit the incorporation file to the Trade Registry Directorate of the city where the company will be based. In Istanbul, for instance, this is done at the Istanbul Chamber of Commerce’s registry office. The application includes a standard registration form and petitions, and attachments of all the notarized documents prepared. The registry officials will verify the documents and, if everything is in order, proceed to register the company in the Turkish Trade Registry Gazette. As noted earlier, this is typically completed the same day or within a couple of working days. Upon registration, the company is legally formed and obtains its registration number and official status.
Obtain Registration Certificates and Notifications
Once the Trade Registry approves the establishment, it will:
Issue a Registration Certificate and Trade Registry Gazette entry. The incorporation is announced in the Trade Registry Gazette (usually published within about 10 days).
Automatically notify the Tax Office and Social Security Institution of the new company’s existence. (This is done ex officio by the registry – you do not have to separately register the company with the tax authority; however, you will later need to follow up with the tax office to obtain the actual tax registration certificate as described below.)
Provide the company’s tax identification number (the company itself gets a tax number separate from the personal ones obtained earlier).
After registration, a tax officer will typically visit the company’s registered address to verify the location and prepare a determination report confirming that the business exists at the stated address. Make sure the address (whether an office, shop, or even a virtual office) is accessible and has the company name signposted, as this visit can happen within days or weeks of incorporation.
Certify the Legal Books
During the incorporation process, certain mandatory company books must be certified by the Trade Registry official. These include:
Journal (Günlük Defter)
General Ledger (Defter-i Kebir)
Inventory Book (Envanter Defteri)
Share Ledger (Pay Defteri, for tracking share ownership)
Board of Managers Meeting Minutes Book (for LLCs) or Board of Directors Meeting Minutes Book (for JSCs)
General Assembly Meeting Minutes Book
The certification involves the registry stamping each book with the company’s details and opening page. These books are then used to record the company’s financial transactions and corporate resolutions as required by law. The initial certification happens at setup, and thereafter some books (like journals and ledgers) must be closed and re-certified or renewed annually. The notary can also certify books, but at the establishment stage the registry typically handles it as part of the one-stop procedure
Issue the Signature Circular
On the day of registration, the persons who are authorized to sign on behalf of the company (e.g. the director of an LLC, or the board members or appointed signatories of a JSC) need to issue a Signature Circular (imza sirküleri). This document, executed at a notary public (often there is a notary desk or nearby notary at the Chamber), officially records the specimen signatures of the company’s authorized representatives under the company’s commercial name. Banks and authorities will request the signature circular to verify signing authority. Essentially, it ties the signature of the company officer to the company’s identity in a certified document.
Final Tax Registration and Social Security Steps
Even though the trade registry notifies the tax office, you may need to visit the local tax office to pick up the tax registration certificate for the company (sometimes called the vergi levhası). This document shows the company’s tax number and tax office. Also, if the company will hire employees, you will separately register with the Social Security Institution (SGK) for social security and unemployment insurance accounts – the trade registry’s notification covers the initial company setup, but you must inform SGK when you actually start hiring employees. If you plan to import or export goods, you might also register with the local Customs and Trade directorate or obtain an exporter/importer registry number via the Ministry of Trade’s systems.
10. (For Foreign Shareholders) Register with E-TUYS: Companies in Turkey that have foreign shareholders are required to inform the Ministry of Industry and Technology about their foreign ownership for statistical and monitoring purposes. Previously this was done by submitting a Foreign Direct Investment (FDI) notification form and periodic updates. Nowadays, this is handled online via the E-TUYS system managed by the GDIIFI. After your company is formed, your local representative or financial advisor can log into the E-TUYS portal and register details such as the foreign shareholders, capital amounts, and any future share transfers. This is generally a formality, but it is a legal obligation to ensure the government keeps track of foreign investments (and it can be important if you ever apply for investment incentives).
By completing these steps, you will have a fully registered Turkish company. The entire process, when planned well, can be done in a matter of days (or even one day for the registry part) – though gathering and legalizing foreign documents can take longer, so plan for that. It’s highly advisable to work with a local accountant or attorney through the process. They can prepare the documentation in Turkish, navigate MERSİS, and coordinate with notaries and the trade office. As a Celikel CPA, I often assist clients with the incorporation and initial tax registrations to ensure everything is compliant from the start.
Company Formation in Turkey: Taxation and Accounting Obligations
Setting up the company is only the first step – you must also understand the tax environment and ongoing compliance requirements for businesses in Turkey. Here we outline the key taxation and accounting obligations that come with company formation in Turkey.
Corporate Tax (Kurumlar Vergisi): Turkish companies are subject to corporate income tax on their profits. The standard corporate tax rate in Turkey is 25% of taxable profits (as of 2024/2025), which is competitive by international standards. Certain financial institutions (banks, insurance companies) pay a higher rate (30%), and there are reduced rates for specific activities (for instance, a 5% reduced rate on profits from exports, effectively making it 20% for export income). Corporate tax is assessed on the net profit reported in the company’s financial statements, adjusted for tax regulations. Tax returns are filed annually, with provisional quarterly tax payments (advance corporate tax) made during the year.
Value Added Tax (VAT or KDV)
If your company will be selling goods or services, be aware of Turkey’s Value Added Tax. The general VAT rate is 20% (recently raised from 18%), and there are reduced rates of 10% and 1% for specific goods/services. For example, many basic food items might be 1%, some tourism services 10%, etc., while most standard commercial transactions are at 20%. VAT is collected from customers and paid to the government, with credit for VAT paid on business purchases. VAT reporting is done with monthly filings. When you form the company and register with the tax office, you will indicate if the company will be VAT-active (most are by default if doing business). Each month, by the 24th, a VAT return must be filed, and any payable VAT is due by the 26th of that month.
Withholding Taxes: Certain payments are subject to withholding tax in Turkey. For example, when your company pays dividends to foreign shareholders, a 15% dividend withholding tax usually applies (which can potentially be reduced if a double taxation treaty exists with the shareholder’s country). Interest, rent, royalties, and professional service fees may also attract withholding tax at various rates. It’s important to structure payments like dividends or cross-border fees with tax efficiency in mind and consult tax professionals or refer to Revenue Administration (GİB) guidelines (see gib.gov.tr for official resources). Turkey has an extensive tax treaty network that prevents double taxation – as of now, treaties with over 80 countries allow foreign investors to avoid being taxed twice on the same income.
Social Security and Payroll Taxes: If your company will hire employees, you must register for social security and withhold contributions from salaries. Employers in Turkey pay social security premiums on behalf of employees (with employee contributions deducted from payroll as well). The combined social security and unemployment insurance burden is roughly 34-40% of gross wages (with the employer paying around 20% of that, and the rest from the employee’s salary). Additionally, employment income is subject to progressive income tax (withholding by the employer) ranging from 15% up to 40% for high earners. When planning a business, factor in these labor-related taxes and consider any incentives (Turkey often has government incentives for hiring, such as temporary social security premium reductions for new young employees, etc.).
Annual Reporting and Audit
Every company must prepare annual financial statements (balance sheet and income statement, at minimum) in line with Turkish Accounting Standards or the Uniform Chart of Accounts as applicable. For most private LLCs and JSCs, Turkish local GAAP (which aligns with IFRS in many respects) is used. These financials must be approved by the shareholders at the Annual General Meeting (AGM) within three months after the fiscal year-end (the fiscal year is typically the calendar year, unless you choose otherwise). Audits: Not all companies are required to have independent audits. Turkey requires independent audit (by certified auditors) only if a company exceeds certain size thresholds in assets, revenue, or number of employees, or if it’s publicly listed or operating in regulated industries. Small and medium enterprises usually do not need an external audit, but they still must keep proper books and records as per the law.
Bookkeeping and Records
Turkish companies are legally obliged to maintain their accounting records in Turkey, in the Turkish language and in Turkish Lira (TRY). The books and ledgers we mentioned (journal, ledger, inventory, etc.) must be kept updated with all transactions. All supporting documents (invoices, receipts, contracts) should be archived. According to the Tax Procedure Law, accounting records and documents must be kept for at least 5 years. The Turkish Commercial Code actually requires commercial books to be retained for 10 years. It’s crucial to comply with these retention rules for potential audits.
Electronic Invoicing and Record-Keeping: Turkey has been moving towards electronic systems. Depending on your company’s size and sector, you may be required to use e-Invoice and e-Ledger systems (for instance, firms over certain annual revenue must issue invoices electronically in government-approved formats). Your CPA or financial consultant can advise if these apply to you.
Engaging a Financial Advisor (SMMM)
In Turkey, Certified Public Accountants (SMMM) and Sworn-in Public Accountants (YMM) are the professionals authorized to handle company bookkeeping, tax filings, and certifications. While it’s not mandatory to have an in-house accountant, practically every company engages an SMMM to fulfill its monthly tax compliance (filing VAT returns, withholding tax returns, social security declarations, etc.). Their fees are modest compared to the cost of missing a declaration or making an error in filings. As a CPA myself, I strongly recommend budgeting for professional accounting services as part of your company’s ongoing expenses – this ensures you remain in good standing with the tax authorities and all deadlines are met.
Tax Incentives and Free Zones
Turkey offers various investment incentives that can reduce the tax burden for new companies, especially in priority sectors or less developed regions. For example, there are Technology Development Zones (Technoparks) where IT companies enjoy income tax exemptions on software/R&D income, Organized Industrial Zones with tax and customs benefits, and Free Zones that offer corporate tax exemptions for manufacturing companies exporting goods. The specifics of these programs are beyond the scope of this article, but the official Investment Office website (invest.gov.tr) and Ministry of Trade provide guides on incentives. If your investment is substantial, you may qualify for support like VAT exemptions on machinery, customs duty exemptions, tax rebates, or social security support. Always check if your planned business could benefit from such programs.
In summary, Turkey’s tax system is well-developed, and compliance requires attention, but it’s straightforward with the help of professionals. Corporate taxes are moderate, and the government’s digitization (e.g. e-filing, online tax office services) makes it easier to manage obligations remotely if needed. When you form a company, be prepared to implement an accounting system from day one and maintain discipline in filings – this will save you from penalties and allow you to benefit from Turkey’s business opportunities without bureaucratic issues.
Company Formation in Turkey: Foreign Ownership and Residency Considerations
One of the biggest concerns for international entrepreneurs is understanding local requirements around ownership, management, and residency. Here we address how foreigners fit into the picture of company formation in Turkey and what immigration or residency factors to consider:
100% Foreign Ownership is Allowed
As mentioned earlier, Turkey imposes no general restrictions on foreign shareholding in companies. You can be the sole shareholder of a Turkish LLC or JSC as a foreign individual or foreign company. Likewise, all members of the board or the sole director can be foreign nationals. The only exceptions are in a few regulated industries (for instance, radio/TV broadcasting has a cap on foreign ownership percentage; civil aviation and maritime transportation require majority Turkish ownership for strategic reasons). Unless your business is in those restricted fields, you are free to own and control your Turkish company fully.
No Mandatory Local Partner or Director
You do not need a Turkish citizen on the board or as a “sponsor.” This is different from some countries where a local partner is required – Turkey has no such requirement in general. That said, having local advisors or staff can be very helpful in practice, especially to navigate language and bureaucracy, but legally it’s not required for most sectors.
Local Address and Registered Office
Every company in Turkey must have a registered office address in Turkey. This will be the official domicile of the company (where official notices can be served, etc.). It can be a commercial office space or even a virtual office service, as long as it’s a legitimate address. If you’re a foreigner not residing in Turkey, you might start with a virtual office or use your law firm’s address temporarily, but you should arrange for a proper local address where you can receive mail and where the tax officer can visit for the initial verification. Note that using a home address is possible if it’s your own property, but local zoning laws might restrict commercial use of residential addresses in some cases.
Residency and Work Permits
Forming a company in Turkey does not automatically grant you residency or a work permit. These are separate processes. If you, as a foreign owner, want to relocate to Turkey and work for your company, you will need to obtain a work permit (and likely a residence permit as a consequence of the work permit). Turkey generally requires that a company employ 5 Turkish citizens for every 1 foreign employee for standard work permit approvals – however, for the company’s first founder/owner, there is usually an exception for the first 6 months to 1 year of operation to give you time to meet the 5 employee rule. The company’s paid-in capital being above a certain threshold (e.g. 100,000 TL or more) can also facilitate the work permit approval for a foreign owner-manager. It’s advisable to consult with an immigration lawyer or the Ministry of Labor’s guidelines when planning to move to Turkey as an investor. Alternatively, some entrepreneurs initially enter on a tourist visa or visa-exempt stay (many nationalities can stay 90 days without a visa), set up the company, and then apply for a work permit once the company is operational.
Management from Abroad: If you do not plan to live in Turkey, you can still own and run the company from abroad. You might appoint a local manager through a power of attorney for day-to-day tasks, or handle many matters remotely. Many compliance requirements (tax filing, banking transactions) can be managed online or via your appointed CPA. But keep in mind, at least one company director or representative will need to be available to sign documents, manage the bank account, and represent the company as needed. This can be done by a trustworthy person on the ground via a power of attorney if you’re absent. All foreign shareholders and directors should obtain a Turkish tax number (as discussed earlier) and will be recorded in the Trade Registry records.
Bank Account Opening
After company registration, one of the first practical steps is to ensure you have a Turkish corporate bank account. Most major banks in Turkey are accustomed to foreign-owned companies. Typically, banks will require the company registration documents (Trade Registry Gazette, tax registration certificate, signature circular, IDs of signatories, etc.). Some banks may ask for the presence of the company director during account opening, while others might allow opening via a representative with a notarized power of attorney. In recent years, due to global anti-money-laundering rules, banks perform thorough due diligence (asking for information on the company’s activities, expected transaction volumes, and the ID documents of ultimate beneficial owners). Be prepared to provide this information. Once the account is open, you can transfer your capital if it wasn’t fully paid-in before, and use the account for operations. Note that having a functioning bank account is also important for things like tax payments and social security payments, which are typically paid through the banking system.
Legal Stay vs. Business Operations: Owning a company doesn’t by itself give you the right to reside in Turkey, but it does give you a legitimate reason to be in the country often for business. If you don’t have a residence permit, you’ll be limited to the duration of your tourist visa or visa-free period for each visit. Overstaying is not advised. If you intend to be hands-on with your business, consider applying for a Turkish residence permit. One common route is a short-term residence permit for business owners or for property owners (if you purchase real estate, for instance). However, the short-term permit doesn’t allow work – it just lets you live in Turkey while managing your investment. To actively work (draw salary, hold a managerial position in legal terms), a work permit tied to your company is the proper route. The Turkish government does encourage foreign investors and has programs to ease investor residency (for example, larger investments can qualify for a Turquoise Card or citizenship by investment if very substantial, but that’s beyond normal company formation scope).
In summary, Turkey makes it straightforward for foreigners to establish and own companies. Ensure you separate the business setup process from the personal immigration process in your planning. Many entrepreneurs successfully run their Turkish companies from abroad, while others relocate and take advantage of Turkey’s vibrant life and economic opportunities. In both cases, Turkey’s policies allow flexibility, as long as you follow the regulations for work/residency when applicable.
