Company Formation Guide for Foreigners in Turkey

Company Formation for Foreigners in Turkey

Foreigners wishing to establish a company in Turkey can form companies under the same conditions as local investors within the framework of the Turkish Commercial Code. This means foreigners can choose structures such as Limited Liability Company (Ltd. Şti.) or Joint-Stock Company (A.Ş.). For Russian-speaking readers who frequently ask about 'ООО', the Turkish equivalent is typically the Limited Liability Company.

Determining Company Type and Business Purpose

Before starting company formation, the business purpose and company type must be clarified. In the Turkish Commercial Code, Joint-Stock Company and Limited Liability Company stand out as corporate structures. While Limited Liability Company generally offers a simpler structure for foreign entrepreneurs, the choice may vary according to partnership structure, investment plan, management model, and future transactions. Our article titled sole proprietorship or LLC in Turkey for foreigners can also be reviewed on this topic.

Official Processes and Institutional Requirements

Company formations in Turkey are carried out at Trade Registry Offices within Chambers of Commerce. This process is conducted through MERSİS (Central Registry System). MERSİS ensures that trade registry transactions are performed electronically and commercial registry data is stored regularly. During company formation, minutes and articles of association must be sent to MERSİS online.

Documents for Foreign Founders

Document preparation varies depending on whether the foreign founder is a natural person or legal entity:

• For Natural Person Foreign Partners: Two copies of each shareholder's passport and notarized translation are required. If residing in Turkey, a notarized residence permit in Turkey document can also be added to the file. Additionally, a tax identification number obtained from the tax office is mandatory.
• For Legal Entity Foreign Partners: A certificate of activity issued by the relevant authority in the investor's country, containing information about the company's current status and authorized signatories, is required. Additionally, authorized corporate body decisions showing that the legal entity shareholder gives approval to company formation must be prepared.

Important Documents

One of the most critical documents in the formation file is the company agreement. In the registry application to the Trade Registry Office, the company agreement must be signed by all founders in the presence of a Trade Registry Office official or Notary. For details on documents and signature authority, the guide documents and signature authority in company formation for foreigners can also be considered.

Registration and Tax Registration

The company formation process becomes official with the registration procedure conducted at the Trade Registry Office. The articles of association and related records prepared through MERSİS form the basic infrastructure for the registry application. At this stage, the signed company agreement and documents related to foreign partners are at the center of the file.

Obtaining a tax identification number is mandatory for foreign natural person partners. This number is critically important for identification in the formation file and subsequent financial transactions. This number should not be confused with the company's tax registration; one relates to the identification of the foreign person, the other to the tax liability of the established company.

Post-Registration Operational Processes

After company registration, operational processes such as bank account opening, accounting arrangement, contracts, and tax monitoring begin. Each company's needs are different; activities such as e-commerce, consultancy, import-export, or real estate investment may create different document and process expectations.

After registration, the company's signature, accounting, and payment system must be established in accordance with the company structure. In companies with foreign partners, document language, notary procedures, translations, and consistency of corporate documents coming from abroad are of great importance. Writing the company title differently in a document or unclear appearance of the authorized signatory may cause additional document requests in subsequent transactions.

Important Points for Foreigners to Consider

Foreign investors have the right to establish companies in Turkey; however, establishing a company alone does not provide residence permit in Turkey or work permit. Company partnership is a matter that should be evaluated separately from residence and work status. For people who will actually work in Turkey, manage the company, or stay for a long time, migration and permit processes should be handled separately from company formation.

The preparation method of foreign documents is critical. In natural person partnerships, passport translation, and in legal entity partnerships, certificate of activity and decision texts directly affect the comprehensibility of the formation file. Clearly stating who the natural person acting on behalf of the legal entity is particularly important in terms of management and representation.

Banking, Accounting, and Costs

After registration, bank account opening and payment traffic arrangement are necessary for the company to start its commercial life. After company formation, financial obligations (tax registration, declarations, book and document arrangement) must be regularly monitored.

Company formation costs may vary according to company type, number of partners, nature of foreign documents, translation and notary procedures, application scope, and services needed afterwards. Generally, company formation costs may range between 25,000 TL and 60,000 TL as of 2024. These costs include notary certifications, trade registry fees, tax office registration fees, and consultancy fees. It should not be forgotten that these costs may change rapidly according to market conditions. Establishing a company should not be seen as a transaction that alone creates citizenship rights. Citizenship, investment, work permit, and company partnership are different legal topics.

ESG Consulting Commentary

The process of company formation for foreigners in Turkey can proceed quite systematically with a properly prepared file. Our experience at ESG Consulting shows that the real issue is not so much choosing the company type, but establishing the chosen structure in harmony with partnership, representation, tax, banking, and migration processes. Limited Liability Company is a frequently preferred model for foreign entrepreneurs; however, not every investment plan fits the same mold. When company structure, foreign documents, and stay/work plans in Turkey are considered together before formation, less correction needs arise in subsequent stages. Taking professional support to accelerate the process and avoid possible mistakes will provide time and cost savings in the long run.

Frequently Asked Questions

Can a foreigner open a Limited Liability Company in Turkey?

Yes. International investors can establish company types included in the Turkish Commercial Code under the same conditions as local investors. The closest Turkish equivalent to the Russian ООО expression is generally considered to be Limited Liability Company, i.e., Ltd. Şti.

Which documents are prominent for foreign natural person partners?

For foreign natural person partners, passport, notarized passport translation, and tax identification number are prominent. In case of residence in Turkey, a notarized residence permit in Turkey document may also be included in the file.

If there is a foreign legal entity partner, which documents should be checked?

For foreign legal entity partners, the certificate of activity and authorized corporate body decision showing approval to company formation should be specifically checked. Clearly stating the natural person who will act on behalf of the legal entity is also important.

Does establishing a company in Turkey provide residence permit or work permit?

No. Establishing a company alone does not mean residence permit in Turkey or work permit. Company partnership is a matter that should be evaluated separately from residence and work status.

What are the company formation costs in Turkey?

While company formation costs vary according to company type, number of partners, translation and notary procedures, an average cost between 25,000 TL and 60,000 TL can be expected as of 2024. This amount covers government fees, notary fees, and consultancy services and may change according to market conditions.

How long does company formation take in Turkey?

Company formations can be completed within the same day at Trade Registry Offices if the necessary documents are prepared completely. However, document preparation and preliminary processes may extend this period.