Starting a business in Turkey as a foreign national can be an exciting opportunity, but it requires understanding the legal framework and company structures available. Whether you’re interested in forming a Sole Proprietorship, Limited Liability Company (LLC), or Joint-Stock Company (JSC), this guide will walk you through the process step by step. From meeting residency and capital requirements to securing work and residence permits, we cover everything you need to know to successfully establish your business in Turkey. Whether you’re a small entrepreneur or looking to scale a larger operation, Turkey offers flexible options for foreign business owners.
Sole Proprietorship:
Sole proprietorships can be established by foreigners who have residency permits in Turkey. They are preferred by small entrepreneurs, and it is the simplest company type when it comes to establishment and maintenance. The requirements are as follows:
- Citizenship or residence permit in Turkey.
- Registered Address: You need to have a legal address in Turkey in order to register a sole proprietorship. You have 3 options:
- You can rent and use a physical office address. The requirement is to pay withholding tax, which is 15% of the rent price.
- You can use your apartment as your legal address. 15% withholding tax applies and tax inspections will be carried out by visiting your home. If you are not present during the inspection, it may cause issues, and you will need to make sure you receive and follow up your legal notifications and mails.
- You can use a virtual office like Workon as your legal address. This way, you won’t have to pay withholding tax, and you won’t have to worry about tax inspections or following up with your legal notifications. We will follow up with your mails and inform you promptly.
No minimum capital is required, and the company can be registered entirely online through e-Devlet, Turkey’s official government portal.
Limited Liability Company
A Limited Liability Company (LLC), called “Limited Şirket” in Turkey, is one of the most popular company structures both in Turkey and globally due to its simple setup and low maintenance costs. To establish an LLC in Turkey, you need a minimum of one shareholder, one director, and a capital requirement of TRY 50,000. The LLC allows up to 50 shareholders, and as a foreigner, you can be both the sole shareholder and director without needing a Turkish partner or employee. The liability of shareholders is limited to their capital contribution, and the required capital can be deposited in the company’s bank account within 24 months of establishment. Importantly, this capital is not blocked and can be used for business expenses.
Requirements before company establishment:
- 2 copies of notarized passport translations
- Potential tax numbers of each one of the shareholder(s). These are obtained from the Revenue Administration. Shareholders can either apply for these tax numbers by themselves or authorize a local company, such as Workon, to secure the tax numbers on their behalf through a power of attorney.
- Registered Address. See article 2.[1]
These documents are submitted via MERSİS, Turkey’s central company registration system, where your articles of association are also prepared. Once the articles are finalized, they are submitted through the system, and an appointment with the Chamber of Commerce is scheduled. You can either attend the Chamber of Commerce in the city where your company will be based, or authorize us to sign the articles of association on your behalf through a power of attorney. The registration process typically takes just 1 hour.
Requirements after company establishment:
- Signing a signature circular at a notary public within Turkey, or at a Turkish Consulate in any country: This document must be signed within 15 days after your company is registered, if you do not sign it in time, you receive a penalty from the government. It is a document that proves you have the authority to sign any documents on behalf of your company, and displays your signature.
- Power of attorney for public accounting: This document is necessary for your certified public accountant to handle the formalities on behalf of your company.
In Turkey, having a certified public accountant (CPA) is mandatory for all company owners, regardless of the business type. CPAs handle crucial responsibilities such as tax declarations, bookkeeping, and providing advice on taxation law and financial matters. For Limited Liability Companies (LLC), the minimum legal fee for a public accountant is 3,096 TL per month, plus VAT.
Joint-Stock Company
A Joint-Stock Company (JSC), known as “Anonim Şirket” in Turkey, is ideal for larger-scale operations, particularly those seeking external investment or planning to issue public shares. To establish a JSC, at least one shareholder is required, along with a minimum capital of TRY 250,000, 25% of which must be deposited into a bank during the registration process. The liability of shareholders is limited to their capital contributions, and the JSC can issue both common and preferred shares. There is no maximum limit on the number of shareholders, and shares can be transferred easily without disrupting business operations, offering a smoother process compared to LLCs. Like LLCs, the company’s debts are separate from shareholders’ liabilities. Additionally, investors can avoid capital gains tax if shares are sold after two years. However, JSCs are required to hold board meetings and general assemblies every two years, adding a level of operational complexity.
Requirements before company establishment: The requirements are the same as Limited Liability Companies, with the only difference being the depositing of 25% of the capital during the registration stage:
Requirements before company establishment:
- 2 copies of notarized passport translations
- Potential tax numbers of each one of the shareholder(s). These are obtained from the Revenue Administration, either by the shareholders themselves or by giving a power of attorney to a Turkish company like Workon to obtain it on behalf of the shareholders.
- Registered Address. See article 2.
These documents are submitted via MERSİS, Turkey’s central company registration system, where your articles of association are also prepared. Once the articles are finalized, they are submitted through the system, and an appointment with the Chamber of Commerce is scheduled. You can either attend the Chamber of Commerce in the city where your company will be based, or authorize us to sign the articles of association on your behalf through a power of attorney. After this, 25% of the company capital must be deposited into a bank account and the receipt should be given to the Chamber of Commerce to complete the registration.
Requirements after company establishment:
- Signing a signature circular at a notary public within Turkey, or at a Turkish Consulate in any country: This document must be signed within 15 days after your company is registered, if you do not sign it in time, you receive a penalty from the government. It is a document that proves you have the authority to sign any documents on behalf of your company, and displays your signature.
- Power of attorney for public accounting: This document is necessary for your certified public accountant to handle the formalities on behalf of your company.
The minimum legal fee for public accounting for a JSC starts at 4,314 TL + VAT monthly.
Work & Residence Permit Processes
Residence Permit: As a business shareholder, whether your company is a joint-stock company or an LLC, you have the right to apply for either a residence permit or a work permit. To apply for a residence permit, your company must be operational. The application cannot be processed if your company is inactive. After registering your company, you will need to visit Turkey, as you can only secure your appointment with the Ministry of Immigration while you are physically in the country. The appointment can typically be arranged within approximately two weeks. You must not leave Turkey for longer than 15 days after securing the appointment and you must attend the appointment in person with your documents. Following the appointment, you can expect a response from the ministry within one to three months.
Work Permit: For a work permit, the requirement is to employ five Turkish citizens for each work permit granted to a foreigner. However, if your company is less than six months old and you deposit 500,000 Turkish Liras into your company’s bank account, you can easily obtain a work permit without needing to hire five Turkish employees. Once the deposit is made and your documents are submitted, you can obtain your work permit within 2-3 weeks. The permit will be valid for six months or one year, depending on the ministry’s decision. After this period, you can apply to renew the work permit, but you must hire five Turkish workers and pay their insurance fees during the application process. After securing the renewal, you may then adjust your workforce as needed. If the renewal application is not successful, or if you need an easier option, you may consider turning your work permit into a residence permit.
Business Bank Account
After registering your business, you will need to open a bank account. The banking system is very advanced in Turkey, offering online banking options and the ability to handle your transactions anywhere in the world smoothly. However, opening business accounts can be very challenging for both locals and foreign investors. This is where Workon can assist you with our experience and expertise, even after the bank account is opened, continuing to support you. You can visit a branch of a bank of your choice to open your account or a trusted partner like Workon can open it remotely for you via a power of attorney.
Establishing a company in Turkey as a foreigner can be complex, but with the right guidance, it can be a seamless process. Workon offers expert support to help you navigate the legal requirements, obtain the necessary permits, and set up your business structure—whether it’s a sole proprietorship, LLC, or JSC. From securing your business bank account to ensuring compliance with local regulations, we provide end-to-end assistance tailored to your needs. Contact Workon today and take the first step toward successfully launching your business in Turkey.
