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Company establishment in Turkey |
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| If you are planning to establish a company, please be careful about the source and date of the information you are given. Please note here that the new Turkish Commercial Code has just entered into force in July 2012, which introduces major changes to the older one that was in force since 1957. Therefore, some information provided on the internet may be misleading. | |
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Capital companies are the most common form of business entities in Turkey utilized by both local and foreign investors. Investors may choose to participate in an already existing capital company or establish a new one. The most preferred types of capital companies in Turkey are joint stock and limited companies. In both joint-stock companies and limited liability companies (LLCs), fields of activity, operations and other corporate matters are governed by articles of association (similar to a certificate of incorporation and bylaws in Europe), within the framework set out by Turkish commercial law. From a practical and personal point of view, joint-stock companies are the legal entities most appropriate for large operations, including, in particular, corporate joint ventures. The legal framework on corporate governance of joint-stock companies are better developed and more flexible. On the other hand, LLCs are generally used for projects and investments on a smaller scale. Investors may prefer to establish limited companies for practical reasons; however, this is purely a business decision based on projected capital and targeted investments. Normally, incorporation of either a joint-stock or limited liability company can be handled within a week, once all the documents are ready. However, the implementation of new rules different than the previous ones may cause problems or delays in practice, during the registration process. The most important change is that the new Turkish Commercial Code allows the establishment of companies with only one shareholder. Other specifications in line with the new regulations are as below. For joint-stock companies: – At least one shareholder (real person or legal entity) and a minimum capital of TL 50,000 are required. If the shares are subscribed in cash, at least 25 percent of the share capital must be paid upfront before registration and the remaining share capital must be paid within 24 months following registration. – The board of directors can be comprised of a single person. Board members are not required to be a shareholder. A legal entity can also be a board member, however, in this case, a real person must be designated to represent the legal entity. – An ordinary general meeting of shareholders shall be conducted within three months of the end of the accounting year. An extraordinary general shareholders’ meeting can also be called whenever required. Limited liability companies can be established with a minimum of one shareholder. The shareholder can either be a real person or a legal entity. A minimum capital of TL 10,000 is required. Share capital must fully be paid in to the company. LLCs are managed and represented by all shareholders. A manager or managers can be appointed for the company from the outside to be authorized to represent the company together with the shareholders, provided that one of them is a shareholder of the company. If the company has more than one manager, one of them shall be appointed the chairperson of its board of managers by the general assembly. Please don’t forget that a work permit is required for a foreign manager Please do not hesitate to contact us if you have any questions |
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