LTD vs. JSC in Turkey: A 2025 Strategic Comparison for Investors
The two primary forms for a subsidiary are the Limited Liability Company (LTD or Limited Şirket) and the Joint-Stock Company (JSC or Anonim Şirket). While both offer the benefit of limited liability, they are designed for different business scales, strategic goals, and governance preferences. Choosing between an LTD and a JSC in Turkey is not merely a procedural step — it’s a strategic decision that will impact your company’s capital structure, governance model, fundraising capability, and exit strategy.
This 2025 guide provides a comprehensive, head-to-head comparison of LTD vs. JSC in Turkey, helping you make an informed decision that aligns with your business objectives and long-term investment strategy in the Turkish market.
At a Glance: LTD vs. JSC Comparison Table (2025)
To understand the core differences quickly, this table outlines the most important characteristics of each company type under the Turkish Commercial Code (TCC) as of 2025.
| Feature | Limited Liability Company (LTD) | Joint-Stock Company (JSC) |
|---|---|---|
| Legal Status | Separate Turkish legal entity | Separate Turkish legal entity |
| Primary Use Case | SMEs, startups, family businesses, most foreign subsidiaries | Large-scale enterprises, holding companies, IPO-planning structures |
| Minimum Capital | TRY 50,000 | TRY 250,000 (or TRY 500,000 for registered capital system) |
| Capital Payment | Can be paid within 24 months after registration | At least 25% paid before registration; remaining within 24 months |
| Shareholder Liability | Limited to subscribed capital; shareholders may be liable for public debts (e.g., taxes) proportionally | Limited to subscribed capital; shareholders not personally liable for public debts |
| Number of Shareholders | Minimum 1, maximum 50 | Minimum 1, no upper limit |
| Share Transfer | Requires notarized share transfer agreement and General Assembly approval; more formal and costly | Freely transferable unless restricted by the Articles of Association; no notary required |
| Management | Managed by one or more Managers (can be shareholders or third parties) | Managed by a Board of Directors (may consist of a single member) |
| Ability to Go Public | No | Yes |
| Bond Issuance | No | Yes |
| Mandatory for Certain Sectors | No | Yes – Banking, insurance, and financial institutions |
Source: Turkish Commercial Code (TCC), updated 2024. Capital thresholds effective January 2025.
Deep Dive: Key Differences Explained
Understanding the nuances behind the features in the table is crucial for making the right strategic choice.
1. Liability: The Corporate Shield
Both the LTD and JSC provide a corporate veil, meaning the shareholders' liability is generally limited to the capital they have committed to the company. This protects the personal assets of shareholders and the assets of a foreign parent company from the debts and obligations of the Turkish subsidiary.
However, there is a critical distinction regarding public debts:
- JSC (A.Ş.): Shareholders have no personal liability for the company's public debts, such as unpaid taxes or social security premiums. This provides the strongest liability protection.
- LTD (Limited): While liability is generally limited, if the company cannot pay its public debts, shareholders can be held personally liable on a pro-rata basis according to their capital contribution. This makes the JSC a safer option for investors prioritizing maximum asset protection.
2. Capital Requirements: Upfront vs. Flexible Funding
The minimum capital requirements and payment terms are one of the most significant practical differences between the two structures.
- LTD (Limited): Requires a minimum capital of TRY 50,000. The entire amount can be paid within 24 months following the company's registration. This flexibility makes the LTD highly attractive for startups and SMEs that prefer to preserve cash flow during the initial setup phase.
- JSC (A.Ş.): Requires a significantly higher minimum capital of TRY 250,000. At least 25% of this amount must be deposited before registration with the Trade Registry. This upfront financial commitment makes the JSC more suitable for well-capitalized, large-scale ventures.
3. Share Transfer: Agility vs. Control
How easily ownership can be transferred is a key strategic consideration, especially for investors planning future exits, partnerships, or employee stock options.
- JSC (A.Ş.): Offers maximum flexibility. Shares can be transferred freely and privately without needing a notary or the approval of the General Assembly (unless restricted by the Articles of Association). This simplicity is ideal for companies anticipating frequent ownership changes or seeking venture capital investment.
- LTD (Limited): The process is more rigid and controlled. A share transfer must be executed through a notarized agreement and approved by the General Assembly. This makes transfers slower and more costly but gives existing shareholders greater control over new entrants.
4. Governance and Management: Simplicity vs. Formality
The management structures reflect the intended scale of each company type.
- LTD (Limited): Governance is simpler. The company is managed by one or more Managers (Müdür), who can be shareholders or external professionals. This model is efficient for small to medium-sized businesses.
- JSC (A.Ş.): Managed by a more formal Board of Directors (Yönetim Kurulu), which can consist of a single member. The structured decision-making process is ideal for larger organizations requiring robust corporate governance.
Strategic Considerations: Which Structure is Right for Your Business?
Your choice between an LTD and a JSC should be guided by your company's scale, financial capacity, and long-term business vision. For a complete overview of incorporation procedures, capital requirements, and registration steps, please refer to our main company formation guide.
Choose a Limited Liability Company (LTD) if:
- You are a small or medium-sized enterprise (SME), startup, or family-owned business.
- You prefer lower initial capital requirements and want the flexibility to pay the capital within 24 months.
- You anticipate having a limited and stable number of shareholders (up to 50).
- You do not plan to go public or issue bonds.
- You prefer a simpler, less formal management structure with fewer compliance obligations.
Choose a Joint-Stock Company (JSC) if:
- You are planning a large-scale investment or corporate structure.
- You need the ability to transfer shares quickly and easily to bring in investors or enable an exit strategy.
- Your long-term goal includes raising capital through an IPO or issuing corporate bonds.
- You require the strongest protection from personal liability regarding public debts and obligations.
- You operate in a sector where a JSC is legally mandatory, such as banking, insurance, or financial services.
Beyond LTD and JSC: Other Structures to Consider
While an LTD or JSC is the most common form for establishing a subsidiary in Turkey, some investors may benefit from alternative setups depending on their market entry strategy or project scope.
For businesses testing the Turkish market or managing a specific project, understanding the pros and cons of opening a branch in Turkey is essential. A branch is not a separate legal entity and directly exposes the parent company to liability.
For non-commercial activities like market research, representation, or coordination, establishing a liaison office in Turkey can be a cost-effective and tax-efficient option, as liaison offices are prohibited from generating revenue.
Frequently Asked Questions (FAQ)
1. Can a foreigner own 100% of an LTD or JSC in Turkey?
Yes. Under the Foreign Direct Investment Law (No. 4875), Turkey follows an “equal treatment” principle. Foreign investors have the same rights as local investors and may establish a company with 100% foreign ownership — no Turkish partner is required. This applies equally to both LTDs and JSCs.
2. What is the minimum number of shareholders required?
Both an LTD and a JSC can be established by a single shareholder, who may be either an individual or a legal entity. This single-shareholder flexibility makes it easier for foreign investors to maintain full ownership and control.
3. Is the JSC more prestigious than the LTD?
In Turkish business practice, the JSC (Anonim Şirket) is often perceived as a more prestigious and established structure. This perception comes from its higher capital threshold, formal governance system, and suitability for large-scale or publicly listed companies. However, the LTD (Limited Şirket) remains the most common and practical choice for both domestic and foreign-owned subsidiaries due to its cost-effectiveness and flexibility.
4. Which company type is faster or cheaper to set up?
The registration process for both company types is relatively quick, typically completed within a few business days once all documentation is ready. However, the LTD is generally more cost-efficient — it requires a minimum capital of 50,000 TRY payable over 24 months, while the JSC requires an upfront payment of at least 62,500 TRY (25% of 250,000 TRY). Note that notary and share transfer fees tend to be higher for LTDs.
5. Can I convert my company from an LTD to a JSC in the future?
Yes. The Turkish Commercial Code allows companies to change their legal structure. A business can start as an LTD for simplicity and later convert to a JSC as it grows — for instance, when preparing for an IPO, attracting institutional investors, or meeting sector-specific requirements.
