How to establish a company in Turkey
|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.