If you plan to start a business in Asia, Turkey is an excellent choice for registering your company. The Manimama team has conducted in-depth research, analyzed the main subtleties of incorporating in Turkey, and is ready to share its results and help you choose the right jurisdiction.
What are the main advantages of incorporating a company (business) in Turkey?
- Promising Location Between Europe and Asia
Turkey is uniquely positioned at the crossroads of two continents, making it a natural bridge between East and West. This offers companies access not only to a domestic market of over 80 million consumers but also to the European Union, the Middle East, the Caucasus, and North Africa. Its location makes it ideal for logistics, distribution, and international trade.
- Dynamic Economy
Turkey boasts one of the largest and most dynamic economies in the region, with steady growth even during times of global uncertainty. Its young, educated, and entrepreneurial population creates a favorable environment for business development across various sectors, including technology, manufacturing, agribusiness, and services.
- Favorable Conditions for Foreign Investors
The Turkish government actively encourages foreign investment by offering competitive tax incentives. These include reduced corporate tax rates, tax holidays for confident investors, and benefits for companies operating in free economic zones. In addition, foreign nationals are allowed 100% ownership of their businesses without needing a local partner.
- Modern Infrastructure and Logistics Capabilities
Turkey offers well-developed infrastructure, including airports, seaports, high-speed highways, and railways. The country serves as a key transit hub for goods moving between Europe, Asia, and the Middle East, opening up vast opportunities for companies involved in logistics and import-export. Digital infrastructure is also expanding rapidly, supporting the needs of modern businesses.
- Access to International Markets and Technological Orientation
Turkey’s participation in the EU Customs Union and various international trade agreements provides businesses preferential access to numerous global markets. Moreover, the government increasingly focuses on innovation, research, and technology development through grants, technology parks, and national support programs.
How to register a company in Turkey and what are the main requirements for such registration?
Step 1. Initial setup
- Initiating a preliminary project assessment, assessing risks, choosing the type of company, preparing the necessary documents and obtaining the necessary permits, determining the time frame, budget, and resources required to complete the process.
- Preparation and filing of the package of documents.
Step 2. Company registration
- Choosing a company name, which must approved by the Trade Registry Office;
- Facilitating the notarial process for the company’s official registration;
- Submitting application and all required documents to the Trade Registry Office;
- Obtaining a Tax Identification Number and registering for VAT;
- Opening of a bank account;
- Registering with Social Security and other authorities;
- Obtaining the licenses or permits, if applicable.
Requirements for registering a company in Turkey on the example of a Limited Liability Company (LLC) / Limited Şirket:
- Shareholders: the company must have a minimum 1 and a maximum of 50 shareholders. Both natural and legal persons can be members of an LLC. They do not necessarily have to reside in Turkey; non-residents can also be shareholders of a Turkish LLC. 100% ownership is available for foreigners.
- Director: the LLC must have at least 1 director. There are no restrictions on the nationality or residency of directors as well as a requirement to obtain a work/residence permit to become a director. A legal entity can also be the director.
- Company secretary: there is no requirement.
- Minimum share capital: the minimum share capital requirement is TRY 50,000 (~ €1,316), which must be paid by shareholders to the bank account of the company within 24 months after the registration or at the time of registration.
- Legal address: the company must have a registered office in Turkey.
- Liability: the liability of the shareholders is confined to the capital invested in the company.
- Accounting: the company is required to prepare annual financial statements in accordance with Turkish accounting standards.
What do you have to know about taxes when registering a company in Turkey?
Corporate income tax (CIT):
- The standard CIT is 25%.
- This rate applies to the worldwide income of Turkish companies, including LLCs.
Personal income tax (PIT):
The following PIT rates apply to employment income:
- up to TRY 110,000 (~ €2,896) – 15%
- over TRY 110,000 (~ €2,896) up to 230,000 (~ €6,056) – 20%
- over TRY 230,000 (~ €6,056) up to 870,000 (~ €22,910) – 27%
- over TRY 870,000 (~ €22,910) up to 3,000,000 (~ €79,002) – 35%
- over TRY 3,000,000 (~ €79,002) – 40%
The PIT rates for non-employment income are as follows:
- up to TRY 110,000 (~ €2,896) – 15%
- over TRY 110,000 (~ €2,896) up to 230,000 (~ €6,056) – 20%
- over TRY 230,000 (~ €6,056) up to 580,000 (~ €15,273) – 27%
- over TRY 580,000 (~ €15,273) up to 3,000,000 (~ €79,002) – 35%
- over TRY 3,000,000 (~ €79,002) – 40%
There are no local taxes on personal income in Turkey.
Value-added tax (VAT):
- The standard rate is 20%.
- The reduced VAT rates are as follows: 10% (certain foods such as meat, milk, dairy products, and produce; textiles; educational services provided by universities and private schools; tickets for cinema, opera, and ballet; medicines and medical products and services, including imports designated by the Ministry of Health; food catering in certain cafes, restaurants, and similar venues, excluding alcoholic beverages; bridge tolls on bridges built, etc.) and 1% (specific unprocessed agricultural products, such as select dried and fresh fruits, nuts, seeds, and grains; wheat flour and bread products; various types of second hand vehicles; funeral services; leasing of transportation vehicles; various financial leases and supplies of goods to leasing companies, etc.).
- Exemptions from VAT: certain transactions are VAT-exempt, including financial and insurance services, educational services provided by recognized institutions, certain medical services, and transactions within free trade zones.
For readers
Manimama provides assistance in choosing the right jurisdiction for company incorporation and in registering a business specifically in Turkey. We have a good understanding of the tax and legal peculiarities of specific jurisdictions, which helps our clients make an informed choice based on their unique needs and development strategies. In our work, we take into account factors affecting the business environment, such as the level of competition, access to financial and human resources, as well as opportunities for further growth and development in different jurisdictions.
By choosing our company formation service in Turkey, you are working with a law firm that values integrity, competence, and client satisfaction. Let us help you set up a company in Turkey and pave the way for your business success!
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The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.
