The Legal Structure Behind Company Formation
Turkey’s business ecosystem is largely shaped by the Turkish Commercial Code (Law No. 6102), which governs the formation and operation of companies. Supplemented by the Turkish Code of Obligations and the Turkish Civil Code, this regulatory environment ensures that company formation in Turkey is a straightforward and reliable process. Once a company is registered with the Trade Registry, it gains independent legal status, safeguarding investors from many forms of personal liability.
Welcoming Foreign Investors
Turkey’s welcoming approach to foreign investors is exemplified by the Foreign Direct Investment Law (No. 4875). Since its enactment, foreigners have been able to establish businesses with the same legal rights and obligations as local investors. Recent reforms, such as the Turkish copyright Law (No. 7518), have added to Turkey’s attractiveness, particularly for those venturing into the digital economy.
This evolving framework makes company establishment in Turkey not only feasible but highly advantageous for those looking to enter a fast-growing market.
Exploring the Different Types of Companies
Entrepreneurs have a choice between several corporate structures:
- Joint-Stock Companies,
- Limited Liability Companies,
- Cooperatives,
- Collective Companies,
- Commandite Companies.
Thanks to the MERSİS electronic registration system, entrepreneurs can complete company registration swiftly. Notably, both Limited Liability Companies (LLC) and Joint-Stock Companies (JSC) can now be established with a single shareholder, providing more flexibility for solo entrepreneurs.
Navigating the Incorporation Process
Establishing a company requires completing the following essential steps:
- Preparing a notarized company contract,
- Submitting the necessary documents to the Trade Registry,
- Depositing initial capital,
- Obtaining a tax identification number,
- Opening a corporate bank account.
With these steps completed, businesses are ready to start operations and take advantage of Turkey’s vibrant market.
Understanding Taxes and Corporate Governance
The Turkish tax system offers competitive rates for businesses, with a corporate income tax generally set at 20%. Finance-sector companies, like banks, are subject to a slightly higher rate of 25%. Turkey’s 2024 tax reforms have introduced changes that companies should monitor closely to optimize their financial planning.
Effective governance is equally vital. Turkey mandates structured corporate governance frameworks that ensure transparency, efficiency, and compliance with national standards, enhancing the long-term viability of businesses.
Alternative Investment Methods
Aside from direct company incorporation in Turkey, investors can explore alternative methods like:
- Acquiring shares in an existing Turkish company,
- Opening liaison offices for representation without commercial activity,
- Entering the Turkish market via franchising.
Franchising has flourished in Turkey, offering foreign brands a lucrative avenue for growth despite the lack of a specific franchising law.
Conclusion: A Bright Future for Investors
In summary, company formation in Turkey presents an exceptional opportunity for those looking to expand their business footprint. The country’s strategic positioning, robust legal protections, and newly introduced digital economy regulations make it one of the top destinations for investors globally. Whether through setting up a new company or exploring franchising options, Turkey remains a land full of opportunities.
For a comprehensive guide on starting your company in Turkey, explore the full article here.