Company Formation in Türkiye

Overview

Türkiye allows foreign individuals and legal entities to establish and fully own Turkish companies. Under the Foreign Direct Investment Law No. 4875, foreign investors are subject to the same rules as domestic investors, and no local shareholder, sponsor or minimum Turkish participation is required. Incorporation is handled electronically through the central registry system (MERSIS) and completed before the trade registry directorates operating within the chambers of commerce. Incorporation itself is exempt from registration duties, and once the documents are in order the registration can be completed on the day of the registry appointment.

This guide explains how to choose between the two corporate forms used in practice, the joint stock company (anonim şirket, JSC) and the limited liability company (limited şirket, LLC), and walks through the process and the obligations that follow. Together these two forms account for around 95% of all companies in Türkiye.

Choosing Between a JSC and an LLC

Both company types provide limited liability and can be established by a single shareholder, who may be a foreign individual or a foreign legal entity. Neither shareholders nor board members are required to be Turkish citizens or resident in Türkiye. The differences that matter in practice are set out below.

Two points in this table drive most decisions. First, shares in a JSC can be transferred without a notary or registry filing, which makes the JSC the standard choice for ventures contemplating investment rounds or an eventual sale. Second, LLC shareholders carry a statutory exposure for the company’s unpaid tax and social security debts in proportion to their shares, an exposure JSC shareholders do not have. For these reasons foreign investors frequently prefer the JSC despite its higher minimum capital. You can also try the short interactive comparison at the end of this guide.

The minimum capital amounts shown above apply since 1 January 2024. Companies established before that date must align their capital with these thresholds by 31 December 2026, a deadline we examined in a separate alert on this site.

Companies in regulated sectors, such as banks, financial leasing, factoring and financing companies, insurance companies, asset management companies and holding companies established as JSCs, require a permit from the Ministry of Trade for incorporation and for amendments to their articles of association.

What Foreign Founders Should Prepare

For foreign individual founders, the core items are a passport with a notarized Turkish translation, a Turkish tax identification number, which can be obtained from any tax office without residency and is then recorded in MERSIS through the trade registry, and a power of attorney if the process will be handled by proxy. A power of attorney signed abroad must be notarized and apostilled, or legalized through a Turkish consulate, and sworn-translated into Turkish. A foreign founder who resides in Türkiye additionally provides a notarized copy of the residence permit. Where a foreign shareholder is involved, the registry also requires a formation notification form (kuruluş bildirim formu).

For foreign corporate founders, the standard set consists of an apostilled and sworn-translated current extract from the home trade registry evidencing the company’s existence, a resolution of the competent corporate body approving the incorporation, the shareholding and the persons authorized to sign, and identity documents of those signatories. Where a legal entity will sit on the board or act as manager, the resolution designating the individual who will act on its behalf is also filed. Requirements can vary between trade registry directorates, so the exact list should be confirmed with the registry where the company will be seated before the filing.

Residency in Türkiye is not required to be a shareholder or a board member, and neither shareholding nor board membership by itself requires a residence permit or a work permit. A foreigner who will actually work for the company in Türkiye under an employment relationship needs a work permit. For shareholders and board members, a work permit exemption is available as a faster and simpler alternative where its conditions are met. We will examine these rules in detail in the Employment and Work Permits guide in this section.

Incorporation by Proxy

Foreign founders do not need to travel to Türkiye for the incorporation. The entire process, from the MERSIS application to the signing of the articles of association, can be carried out by a proxy acting under a power of attorney, and in practice this is how most foreign-owned companies are established. Turkish law does not allow a company to be incorporated with an electronic signature. The articles of association must be signed physically before the authorized personnel of the trade registry directorate, either by the founders themselves or, under a power of attorney, by their attorneys in fact on behalf of the shareholders. A power of attorney issued abroad for this purpose must be notarized and apostilled, or legalized through a Turkish consulate, and sworn-translated into Turkish, as described above. The tax number applications, the capital blockage account and the post-registration filings can be handled under the same power of attorney.

Incorporation Step by Step

The process begins on MERSIS, where the company title is cleared and the articles of association are drafted in the system in Turkish. The articles set out the corporate purpose, capital, share structure, management and representation rules, and for an LLC any share transfer restrictions or ancillary obligations. MERSIS also assigns the company’s prospective tax number at this stage.

Once the draft is ready, an appointment is booked with the competent trade registry directorate. In Istanbul this is done online through the chamber’s appointment system, and the application file includes a petition, the chamber registration statement with photographs of the shareholders and, where foreign shareholders are involved, the formation notification form. The founders or their proxies sign the articles before the authorized registry personnel, and the signature declarations of the persons authorized to represent the company are issued at the registry.

For a JSC, at least 25% of the cash capital is deposited into a blocked bank account opened in the company’s name before registration and the bank’s blockage letter is added to the file. For an LLC no capital deposit is required at this stage. In both cases the Competition Authority share of 0.04% of the capital is paid through the registry during the application, with no separate bank visit.

Registration establishes the company as a legal entity. The incorporation is announced in the Turkish Trade Registry Gazette and the statutory commercial books are certified and handed over by the registry at registration. Immediately afterwards the company completes its tax office registration, which typically includes a workplace verification visit, activates its electronic notification address, and opens its operational bank accounts. If the company will hire employees, social security employer registration follows.

In ordinary conditions a company with complete documents is registered on the appointment day and is operational, with bank account and tax registration in place, within one to two weeks.

Ongoing Obligations After Incorporation

A Turkish company keeps statutory commercial books, files corporate income tax and VAT returns electronically, and holds an ordinary general assembly for each financial year, in the case of a JSC within three months following the year end. Capital companies operating in certain regulated fields, and those exceeding at least two of the statutory thresholds on total assets, net sales revenue and number of employees, become subject to independent audit. Changes in share ownership, management or the articles are registered with the trade registry, and companies also make beneficial ownership notifications to the tax administration.

None of these obligations is burdensome in routine practice, but timelines matter, and late registrations or missed general assemblies create avoidable exposure for management.

Branch and Liaison Office Alternatives

A foreign company that does not wish to incorporate a subsidiary may register a branch, which can carry on commercial activity under the parent’s liability and requires the appointment of a fully authorized commercial representative resident in Türkiye. Alternatively, it may open a liaison office with a permit from the Ministry of Industry and Technology, which may not engage in commercial activity and is limited to representation, market research and similar functions. For most operating businesses a subsidiary in JSC or LLC form remains the preferred structure.

How We Can Assist

Semiz Law Firm advises foreign companies and individual investors on entity selection, prepares the articles of association and the incorporation file, completes the MERSIS and trade registry process by proxy, and handles post-incorporation registrations, so that founders can complete the entire process without traveling to Türkiye. For further information you can visit our corporate law page.

This guide provides general information current as of its date of publication and does not constitute legal advice. Specific transactions should be assessed on their own facts.

For further information: [email protected] | www.semizlaw.com