COMPANY ESTABLİSHMENT PROCESS İN TURKEY

I-Preliminary Preparation: In this stage, investors must decide on the following issues:
• Company type – A.S. or Ltd. Sti.
• Trade Name – In Turkey, trade names must briefly specify the main area of business the company will operate in together with the name of the company type (e.g. X Nakliyat, Ticaret ve Sanayi Anonim Şirketi (in English, X Transportation, Commerce and Industry Joint Stock Company)
• Official address – where the headquarters of the company will be located.
• Capital amount – The minimum capital required to establish an A.S. is TRY 50,000 (app. USD 14,000 – EUR 13,000); whereas the minimum capital requirement for Ltd. Sti. is TRY 10,000 (app. USD 2,800 – EUR 2,500). %25 of the capital must be paid prior to the registration of the company, and the remaining must be paid within 24 months following the registration.
• Names of shareholder(s) – Companies, as a general rule, can be established with 1 foreign real or legal entity shareholder.
• Purpose and subject of the company – Mainly which commercial activities will be carried out by the company.
• Names of Manager(s)/Board of Directors member(s) – An A.S. is represented and managed by its “Board of Directors” appointed by the General Assembly (assembly of all shareholders). The Board of directors can be composed of 1 real person or legal entity member. Board of Directors members are not required to be shareholders of the company and they are no longer required to be Turkish citizens or residents of Turkey, but the presence of local members is certainly an advantage for the purposes of day-to-day representation and administration of the company. The maximum term of office of the Board of Directors members is 3 years. However, members can be re-elected.
The management of a Ltd. Sti. is carried out by 1 or more real person or legal entity managers, who can be shareholders or third parties. However, at least one shareholder in the company is required to act as a manager to be vested with the authority to represent and bind the company. Managers can be both of foreign or Turkish nationality.
• Authorized Signatory(ies) – Investors must decide who will be the authorized signatories of the company and who will be entitled to represent and bind the company vis-à-vis third parties.
In both A.S. and Ltd. Sti., authorized signatories can be appointed among Board of Directors members/managers or third parties. However, at least one Board of Directors member in an A.S. must be vested with the authority to represent and bind the company, whereas – as mentioned above – one shareholder in Ltd. Sti. must be an authorized signatory. Authorized signatories are not required to be Turkish citizens or residents of Turkey, but again the presence of local members is an advantage as the signatures of such signatories will be required frequently on a daily basis in order to conduct the activities of the company.
If investors decide to incorporate representation mechanisms with different signatory groups each vested with different powers that are subject to certain limits and thresholds, a specific provision must be added in the articles of association and certain corporate documents such as internal directive must be prepared.
II- Preparation of the Articles of Association: The articles of association is a mandatory public contract setting out terms and conditions regarding the management and governance of the company as well as the relationship between the shareholders. – Due to the recent procedures adopted in Turkey, articles of association must be prepared online on MERSIS and then notarized by a public notary in Turkey.

. III- Preparation of Other Required Documents: Below are the other documents that may be required for establishing a company in Turkey. The trade registry may always require additional information and documents.
• Petition
• Notarized articles of association
• Company formation declaration form
• Declaration of founding shareholders
• Notarized signature declarations of manager(s)/director(s) (and apostilled if signed outside of Turkey)
• Chamber registration form
• Notarized birth certificate copies of Turkish shareholder(s) and manager(s)/director(s), if any.
• Notarized passport (and apostilled if signed outside of Turkey) copies of foreign real person shareholder(s) and manager(s)/director(s),
• Notarized and apostilled Excerpts of Incorporation (or Activity Report) of foreign legal entity shareholder(s) (also indicating the signatory powers of the real persons who will sign and act on behalf of such foreign shareholder(s) in Turkey),
• Resolution adopted by the foreign legal entity shareholder(s) regarding that the said shareholder(s) will participate in and contribute to the company as a shareholder,
• Temporary tax numbers obtained in Turkey for foreign real person and legal entity shareholder(s) and manager(s)/director(s),
• A document evidencing that ¼ of the capital of the company is paid into an account opened in a bank in Turkey in the name of the company,
• Title deed or a lease agreement regarding the place where the company will be located,
• Work and/or residence permits for foreign employee(s) of the company (not necessary if there won’t be any foreign employee during the incorporation),
• In case of capital in-rem contribution, valuation report prepared by an expert appointed by the relevant court,
• A letter obtained from the relevant land registry regarding whether there are any encumbrances on the real estate which will contributed to the company as a capital in-rem
In countries where apostillation is not available, the relevant required documents may be certified by the Turkish embassy located in such country.

IV- Finalization of All Required Documents and Application to the Trade Registry: Once all the documents are duly signed, notarized and apostilled (if required), an application must be made to the relevant trade registry.
V- Further Actions:
i) Corporate books: Subsequent to the registration of the company with the relevant trade registry, certain mandatory corporate books such as share ledger, book of inventory must be prepared and notarized by a public notary (this stage can be completed within a single day). We always advise foreign investors to work with a local accountant/accounting firm at this stage.
ii) Tax number: Also, a tax number must be obtained for the company (this stage – as a rule – can be completed within a maximum of 1 week depending on the workload of the tax office).
iii) Signature circular: Last step is to prepare a signature circular (which will govern and indicate how and by whom the company will be represented vis-à-vis the third parties – details of which explained above) and having it notarized.

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Ekran Resmi 2015-12-01 23.01.26
Evren ÖZMEN-Mesleki yayınlar

Financial Accounting Firm Turkey- İstanbul

We are professionals to help companies by maintaining their books and records and interfacing with management to help them meet their financial reporting and tax requirements, thereby enabling them to focus on growing their businesses 

Contact us : info@ozmconsultancy.com

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In line with this trend, SystemsCPA serves its clients in order to meet their outsourcing needs for secondary activities such as accounting, payroll, management reporting and others. Our approach to outsourcing is to build a close cooperation with our clients in a flexible way in order to meet their different needs.

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By providing complete outsourcing of all your accounting functions, we can serve as a member of your organization and assist your business with any accounting related function.

Ekran Resmi 2015-12-22 05.18.53

How to establish a company in Turkey/Cpa Turkey

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How to establish a company in Turkey

 info@ozmconsultancy.com
I admire people establishing companies in other countries and conducting cross-border trade. Without them, we would have missed out on most of the pleasures coming in from other parts of the world. For those who would like to set up a company in Turkey, I would like to provide some brief information.
 

The main company types in Turkey are limited companies and joint stock companies. A simple company is also use for joint ventures and consortiums under Turkish company law practice. Academically speaking, commandite and collective companies also exist but I have never come across any in my 20 years of legal practice. Holding companies are subjected to some special regulations and they are in the form of joint stock companies.

If a foreign investor is unwilling to set up company, then there is the option of establishing a liaison office — also called a representative office under Turkish legal practice — or a branch office in Turkey.

The first and biggest question in Turkish company law is, “Can foreigners or companies establish a 100 percent foreign shareholding Turkish company?” The answer to this question is a big “YES.” A foreigner can incorporate a company and own it as a full 100 percent shareholder.

Regulated sectors such as banks, private financial institutions, insurance, financial leasing, factoring, holdings, foreign currency exchange offices, public warehousing and the founders and operators of free trade zones and companies are subjected to the Capital Markets Law and must register with the ministry of commerce and industry. There are industry specific regulations for some sectors and this must be considered when establishing a company in Turkey.

Setting up a company in Turkey

To sum up in a very simple way: The major steps to establishing a company are to prepare and notarize the articles of association, deposit 0.04 percent of the capital with the central bank and register the company at the Trade Registry Office and the Chamber of Commerce. Thereafter, the articles of association are published in the Trade Registry Gazette. Once established, the company must be registered with a tax office and will receive its tax certificate, which must be clearly displayed at the place of business. A tax inspector will make a visit to verify this and the place of business within a few days of incorporation.

The Registry Office also notifies the Ministry of Labor and Social Security of the incorporation and both the company and its employees must be registered with that administration. The company’s registered address is stated in the articles of association and any changes must be registered. The legal books of the company — the journal, ledger, case book and inventory — must be certified by a notary on the day the company is registered.

Do not forget to prepare a rental agreement as well as a contract with a local accountant in Turkey for bookkeeping and payroll services. Drafting the articles of association is key to a company’s incorporation and the scope of the company is the heart of the articles of association, which is the constitution of the company.

Please also pay attention to preparing the signing powers for company directors. Please note that a company in Turkey can be managed by foreign directors. There is no requirement to have a Turkish director, but having a local director at least during the establishment process will help you accelerate the process.