How to Set Up a Foreign-Owned Company in Türkiye, Step by Step
Establishing a foreign-owned company in Türkiye is generally a more orderly and accessible process than many international investors initially anticipate. The country’s foreign direct investment framework—principally governed by the Turkish Commercial Code (Law No. 6102) and the Foreign Direct Investment Law (Law No. 4875)—rests on the equal treatment of foreign and domestic investors, subject to any sector-specific rules, licensing obligations and regulatory approvals that may apply.
BOZKURT assists inbound investors throughout the establishment process, from selecting the appropriate corporate vehicle and preparing the articles of association and supporting documentation to completing the required MERSIS and Trade Registry filings. Where applicable, the process also involves arranging the required capital contribution, followed by the necessary tax, banking, accounting and social security registrations. In our experience, difficulties tend to arise not from the incorporation regime itself, but from insufficient preparation before the initial filing.
This guide therefore examines each stage in sequence, highlighting the documents, practical considerations and common risks that foreign investors should address when establishing a company in Türkiye.
Which Entity Should a Foreign Investor Choose?
The first decision in any company formation process in Turkey is the legal vehicle. The Turkish Commercial Code recognises several commercial entity types, but foreign investors most commonly choose between two capital companies: the Limited Liability Company, known in Turkish as a Limited Şirket or Ltd. Şti., and the Joint Stock Company, known as an Anonim Şirket or A.Ş.
Branch offices and liaison offices may also be used in specific cases, but they serve narrower purposes and do not create the same type of independent Turkish corporate structure as an LLC or JSC.
Commercial and Legal Differences
A limited liability company (LLC) is frequently selected for small and medium-sized foreign investments. Under the Turkish Commercial Code, it may be established by one or more shareholders, whether individuals or legal entities, and is currently subject to a minimum share capital requirement of TRY 50,000. Its governance structure is generally less complex than that of a joint stock company. However, transfers of LLC shares are subject to comparatively formal procedures, which ordinarily involve a written share transfer agreement with notarised signatures, approval by the general assembly of shareholders and the relevant Trade Registry filings.
A joint stock company (JSC) is often more appropriate for larger enterprises, investment-led ventures and regulated businesses. A standard JSC may likewise be incorporated by one or more individuals or legal entities and currently requires a minimum share capital of TRY 250,000. Non-public JSCs permitted to operate under the registered capital system are subject to a higher initial capital requirement, currently TRY 500,000. These thresholds should nevertheless be checked against the legislation in force at the time of incorporation. JSCs generally offer greater flexibility in relation to share transfers, external investment and future capital raising. This form is also required, or is typically more suitable, for certain regulated activities, including banking, insurance, financial services and capital-markets business.
A branch is not legally distinct from its foreign parent company. It operates in Türkiye as an extension of that company and may conduct commercial activities within the scope of its registration; consequently, the parent remains directly responsible for the branch’s liabilities and obligations.
A liaison office, sometimes referred to as a representative office, serves a different purpose. Its establishment requires prior permission from the competent authority, and its activities must remain non-commercial. It may undertake functions such as representation, coordination, market research and communication, but it cannot carry on revenue-generating commercial activities in Türkiye.
Under Provisional Article 15 of the Turkish Commercial Code, companies whose share capital remains below the statutory minimum must increase their capital by 31 December 2026. Failing to do so may result in the company being deemed dissolved. For non-public joint stock companies subject to the registered capital system, the same deadline applies to the required capital thresholds. This transitional rule should therefore be treated as a time-sensitive compliance priority for existing companies in Turkey.
Pre-Incorporation Checklist: What to Prepare Before You File
Foreign individuals who will act as shareholders or directors are generally required to provide copies of their passports, duly translated into Turkish and notarised. The precise authentication requirements may vary according to the country in which the documents were issued and the practice of the relevant Trade Registry. Documents issued, certified or notarised outside Türkiye may need to be apostilled or legalised by a Turkish consulate before being translated by a sworn Turkish translator and, where necessary, notarised locally.
Where the shareholder is a foreign legal entity, the supporting documentation will ordinarily include an apostilled or consular-legalised certificate of incorporation or certificate of activity, the entity’s constitutional documents, a duly authorised corporate resolution approving the investment in Türkiye, and evidence of the signatories’ authority. These documents will generally need to be translated into Turkish by a sworn translator and notarised in Türkiye before submission to the Trade Registry.
The proposed trade name should be settled before the articles of association are prepared. It must comply with Turkish company-naming rules and be confirmed as available through the Central Registry Record System (MERSIS). Particular care is required where the proposed name contains expressions associated with a regulated sector or words whose use is restricted or subject to official approval.
A registered office address in Turkey is also required. This is usually documented through a lease agreement or title-related documentation, depending on whether the premises are rented or owned.
If the investor or authorised signatories will not be physically present in Turkey, a power of attorney should be prepared. For foreign investors, the power of attorney must be carefully drafted so that it covers the incorporation process, MERSIS filings, Trade Registry applications, notary procedures, tax registration, bank account opening and related post-incorporation steps.
Banks may also request additional documents for corporate account opening, including beneficial ownership declarations, source-of-funds information, tax identification documents, corporate group charts and compliance questionnaires. These bank compliance checks often run in parallel with the incorporation process but may take longer than the Trade Registry stage.
Pre-Approval for Restricted or Regulated Sectors
Most sectors in Turkey are open to foreign investment. However, certain sectors may be subject to licensing, foreign ownership restrictions, local presence requirements or regulatory approvals. These include, depending on the activity, banking, insurance, payment services, capital markets, broadcasting, civil aviation, maritime activities, mining, education, healthcare and private security.
Investors should confirm sector-specific requirements before finalising the entity type, activity scope and Articles of Association. This is particularly important where the intended business will require an operating licence after incorporation.
Step-by-Step: How to Register a Company in Turkey as a Foreign Investor
The incorporation process for a foreign-owned company in Turkey follows a defined sequence through MERSIS, the Trade Registry, the notary, the tax administration, the bank and, where employees are involved, the Social Security Institution.
Step 1: Choose the Entity Type and Confirm the Activity Scope
Before preparing the Articles of Association, the investor should decide whether the company will be established as an LLC, JSC, branch or liaison office. This decision should be based on the business model, capital needs, number of shareholders, future investment plans, transferability requirements, regulatory obligations and expected governance structure.
The activity scope should be drafted carefully. A scope that is too narrow may create operational restrictions later, while a scope that is too broad or uses regulated wording may trigger Trade Registry questions or licensing issues.
Step 2: Prepare the Articles of Association
The Articles of Association are the constitutional document of the company. For an LLC or JSC, they normally include the company name, registered office address, field of activity, share capital, shareholder structure, management and representation rules, share transfer mechanics and other mandatory provisions.
The Articles of Association are prepared through MERSIS in Turkish. A foreign-language translation may be prepared for the investor’s understanding, but the Turkish version is the legally operative text for registration purposes. Errors in the Articles of Association, particularly in the activity clause, capital structure, shareholder information or representation authority, can lead to delays or rejection. Local legal review before final submission is strongly recommended.
Step 3: Complete MERSIS Registration and Trade Registry Filing
MERSIS, the Central Registry Record System, is the electronic registration system used for company incorporation and commercial registry procedures in Turkey. The incorporation application is prepared through MERSIS and then submitted to the relevant Trade Registry Office where the company’s registered office is located. The Trade Registry filing typically includes the MERSIS application, Articles of Association, shareholder and director documents, signature declarations, registered office documentation, capital payment evidence where required, and other supporting documents depending on the company type and shareholder structure.
In straightforward cases, company registration may be completed relatively quickly once all documents are ready. In practice, timing depends on the relevant Trade Registry, document quality, shareholder structure, foreign documentation, notary availability and whether the activity requires additional review.
Step 4: Arrange Capital Payment Where Required
Capital payment rules differ between LLCs and JSCs. For a Joint Stock Company, at least 25% of the cash capital subscribed must be paid into a bank account opened in the company’s name before registration. The bank issues a letter confirming the blocked capital amount. The remaining capital must be paid within the statutory period, generally within 24 months following registration. For a standard JSC established with the current minimum capital of TRY 250,000, the initial pre-registration payment is therefore at least TRY 62,500.
For a Limited Liability Company, the 25% pre-registration capital payment rule applicable to JSCs does not apply in the same way. Subscribed capital for an LLC may generally be paid within 24 months following establishment, unless a shorter payment period is set in the Articles of Association or required in a specific case. In practice, the capital payment structure should be coordinated with the accountant, bank and Trade Registry before filing.
The capital payment mechanics should be verified against current Turkish commercial law and trade registry practice before filing.
Step 5: Trade Registry Registration and Gazette Publication
Once the Trade Registry approves the application, the company is registered and acquires legal personality. The company receives a trade registry number, and its incorporation is published in the Turkish Trade Registry Gazette. From this point, the company may open bank accounts, issue invoices once tax activation is complete, hire employees after completing social security registration, and commence business operations subject to any applicable sector-specific licences or permits.
Step 6: Tax Registration and Accounting Setup
Following Trade Registry registration, the company’s tax identity number is generated, and tax registration procedures are coordinated with the relevant tax office. The company must also appoint an accountant or certified public accountant to maintain its statutory books, prepare tax declarations and manage ongoing compliance.
A company whose legal or business centre is in Turkey is generally treated as a Turkish tax-resident entity and is subject to Turkish corporate income tax on its worldwide income, subject to applicable exemptions, deductions and treaty considerations. As of 2026, the general corporate income tax rate is 25%. However, certain financial institutions specifically listed in Article 32 of the Corporate Income Tax Law are subject to a higher rate of 30%. Companies should also consider Turkey’s 10% domestic minimum corporate tax regime. However, companies starting operations for the first time are generally excluded from the domestic minimum corporate tax calculation for their first three accounting periods from the commencement of activity, subject to the applicable rules and exceptions. Still, Turkish corporate tax rates and minimum tax rules have been subject to periodic legislative changes. Investors should verify the applicable corporate income tax rate and any minimum tax rules at the time of incorporation and throughout the relevant fiscal year, particularly for financial-sector entities.
The company may also have VAT, withholding tax, stamp tax and other periodic tax obligations depending on its business activity, contracts, employees and transactions.
Step 7: Social Security Registration
If the company will employ staff, it must register as an employer with the Social Security Institution, known as SGK, before the first employee starts work. The company will then be responsible for monthly social security declarations and contributions. If directors, managers or foreign personnel will carry out their duties physically in Turkey, work permit and residence permit issues should also be assessed. Foreign nationals may serve as shareholders, directors or board members; however, the right to physically work or manage operations in Turkey must be assessed separately under immigration and work-permit rules.
Post-Incorporation Compliance and Practical Next Steps
Registering the company is only the beginning. Foreign-owned companies should build ongoing legal, tax and accounting compliance into their operational planning from day one.
Opening a Corporate Bank Account
After incorporation, the company can open a commercial bank account using its Trade Registry certificate, tax identification details, signature circular or signature declarations, Articles of Association and other corporate documents.
Turkish banks typically request beneficial ownership information, passport copies of shareholders and directors, corporate group charts where applicable, source-of-funds information, proof of address and internal compliance forms. For foreign-owned companies, bank onboarding may take longer than the Trade Registry process itself.
Invoicing and E-Document Obligations
Turkey operates an extensive electronic document system, including e-Fatura, e-Arşiv Fatura and e-Defter. Mandatory transition depends on annual gross sales revenue, sector, taxpayer status and specific Revenue Administration rules.
Foreign-owned companies should confirm their e-document obligations with their accountant immediately after tax registration. Even where mandatory thresholds are not yet met, voluntary adoption may be commercially useful, especially for companies working with larger Turkish counterparties.
Tax Obligations: Does a Foreign Investor Pay Tax in Turkey?
Yes. A company incorporated and headquartered in Turkey is generally treated as a Turkish tax-resident company and is taxed in Turkey on its worldwide corporate income. The nationality of the shareholders does not, by itself, remove the company from the Turkish corporate tax system. Ongoing obligations may include corporate income tax returns, provisional tax returns, VAT returns, withholding tax declarations, stamp tax on certain agreements and payroll-related filings. The exact compliance calendar depends on the company’s activity, employee structure, invoice volume and contract profile.
Foreign individual shareholders may also have Turkish personal tax considerations if they reside in Turkey, receive dividends, provide services to the company or become tax resident under Turkish law. Double tax treaties should be reviewed where cross-border dividends, management fees, royalties, interest or service payments are expected.
Annual Corporate Governance and Statutory Books
Turkish companies must maintain statutory books and accounting records in accordance with Turkish law. Ordinary general assembly meetings should be held within the statutory period following the end of the fiscal year to approve annual matters such as financial statements, management release, profit distribution where applicable and appointments. JSCs generally have more formal governance requirements than LLCs, including board resolutions, general assembly procedures and share ledger maintenance. LLCs are administratively simpler, but still require proper corporate records, shareholder resolutions and Trade Registry filings for certain matters.
Directors, Representation and Permits
Turkish law does not generally require the director of an LLC or board member of a JSC to be a Turkish national or Turkish resident. Foreign nationals may serve as directors, managers, or board members. Crucially, however, under Article 623 of the Turkish Commercial Code, an LLC must ensure that at least one partner has management and representation authority. By contrast, a JSC may have a board composed entirely of non-shareholders, subject to the applicable legal requirements for board membership and representation. Practical considerations remain relevant regardless of nationality or residence. Individuals authorised to represent the company may need to obtain a Turkish tax identification number and provide duly notarised signature documentation. Where a foreign national will physically work in Türkiye, the applicable immigration and work-authorisation requirements must also be considered.
Investors should exercise caution before appointing nominee directors or managers solely for administrative convenience. Managers, board members and authorised representatives may incur personal exposure in connection with tax liabilities, social security contributions, public debts and certain regulatory obligations. It is therefore preferable to appoint individuals who will genuinely participate in the company’s governance and to define their management and representation powers clearly from the outset.
Work and Residence Permits for Foreign Directors and Employees
A foreign shareholder or director does not automatically obtain the right to live and work in Turkey merely because a Turkish company has been incorporated. If a foreign national will physically reside and work in Turkey, work permit and residence permit requirements should be assessed separately. In many structures, a foreign shareholder may remain abroad while appointing a local manager, accountant and legal representative to handle operational matters. Where the foreign investor intends to manage the business from Turkey, the immigration position should be planned before operations begin.
Sectoral Rules and Restricted Activities
Turkey’s foreign investment regime is relatively liberal, and many sectors are open to 100% foreign ownership. However, specific legislation may impose licensing, approval, capital, local presence or shareholding rules in regulated sectors. Investors in banking, insurance, payment services, fintech, capital markets, broadcasting, aviation, maritime transport, private security, education, healthcare, energy and mining should obtain sector-specific advice before incorporation. In some cases, the correct legal structure depends not only on company law, but also on the regulator’s licensing expectations.
Turkey also offers investment incentives administered through the relevant public authorities. Depending on the sector, region, investment size and project type, incentives may include VAT exemptions, customs duty exemptions, tax reductions, employer social security contribution support, interest support or land allocation. Eligibility should be analysed at the planning stage rather than after incorporation.
Costs and Estimated Fees for Company Formation in Turkey
The total cost of registering a company in Turkey varies depending on the entity type, city, number and nationality of shareholders, document volume, translation requirements, banking process, and whether the activity is regulated.
The following table provides a practical cost framework rather than a fixed tariff. Official fees, notary fees and exchange rates change periodically and should be confirmed immediately before filing.
Common Mistakes and Practical Risks
In practice, most incorporation delays arise from preventable issues. One common mistake is using outdated minimum capital figures. Since the capital thresholds for LLCs and JSCs have increased, investors should verify current minimum capital before preparing the Articles of Association. One of the most frequent sources of delay is incomplete or improperly legalised documentation originating abroad. Apostilles, notarisation, Turkish consular legalisation and sworn translations must follow the correct sequence. A document may be fully valid in its country of origin yet remain unacceptable to the Turkish Trade Registry if any part of the authentication chain is missing or defective.
Careful drafting of the articles of association is equally important. An unduly restrictive objects clause may impede the company’s future activities, while unclear or unsuitable representation provisions can cause difficulties when determining signing authority before banks, counterparties and public bodies. The opening of the company’s bank accounts may present a further practical delay. Although incorporation can be completed at the Trade Registry, the bank may still be conducting its own compliance and know-your-customer review. Foreign investors should therefore assemble documents concerning their ownership structure, ultimate beneficial owners and source of funds at an early stage.
Late tax, e-document or SGK setup can create penalties and operational difficulties. Companies planning to invoice customers or hire employees immediately after incorporation should coordinate with their accountant before registration is completed.
Finally, investors should be cautious with nominee directors and artificial governance structures. The person shown as authorised representative may carry real responsibility under Turkish law. Governance should reflect the actual decision-making structure of the business.
Conclusion: Setting Up a Foreign-Owned Company in Turkey
Turkey’s incorporation framework is designed to accommodate foreign investment efficiently, and with proper preparation a foreign-owned Turkish company can often be established within a matter of weeks. The legal steps are relatively clear: entity selection, Articles of Association, MERSIS preparation, Trade Registry filing, capital arrangements, tax registration, accounting setup and post-incorporation compliance. In practice, delays usually arise not from the law itself, but from preventable issues: outdated capital assumptions, incomplete apostilles, inconsistent shareholder documents, narrow activity clauses, bank compliance questions or late tax and SGK registrations.
For foreign investors entering the Turkish market, the safest approach is to prepare a jurisdiction-specific incorporation checklist before filing anything with MERSIS or the Trade Registry. Early coordination between legal counsel, accountant, notary, bank and the Trade Registry significantly reduces the risk of re-submission, penalties and operational delay.
Sources
An earlier version of this article was first published by Global Law Experts. You can read the original publication here.