- November 1, 2021
- Posted by: admin
- Category: Company Formation
Turkey is a rising trend for many entrepreneurs around the world. Since, Turkey has many advantages for setting up a business. Such as, Turkey is a bridge between Europe and Asia. Additionally, Turkey’s natural resources and other geographical features are quite attractive. Besides, the young and talented population of Turkey is ready to integrate global world. Finally, Turkish growing economy is a good choice for investors. These are only some benefits of Turkey for investors. The rest will be observed when such business idea is realised in Turkey. However, the main obstacle of the entrepreneurs before entering market is procedures of company formation in Turkey. Therefore, in this article we will address the essential points of this process.
The process and procedures of company formation in Turkey is not very complex. However, on the other hand it is not very easy compared to some countries where online company registration is possible. Besides, some entrepreneurs reference earlier company formation process in other countries. Nevertheless, each country has own law, regulation and procedures. Thus, to minimize the risk and maximize the successful we advise you to review this article. However, since each case have different features, it is always better to have professional service.
Required Decisions Before Company Formation in Turkey
An idea itself to form a company in another country is already an important decision. However, before realizing such idea some further decisions required to be taken. In this heading we will point out those requirements based on our earlier experiences.
First of all, your business objective is quite essential. Since, the environment or culture of Turkey may not be best fit for your idea. For example, opening a restaurant in Turkey can be a good idea. However, on the other hand the taste of Turkish people and tourists is important factor for the success of this idea. Therefore, before taking the action it is better to investigate the success chance of this idea in Turkey.
Secondly, the applicable taxes in Turkey for relevant business. The tax rates are one of the most important factors affecting the profitability of the business idea. Additionally, based on the type of the product or service the tax rate may vary. Also, your business may require the important of some goods. The customs for the relevant goods are crucial for the profitability of your business as well. Consequently, the taxes and customs are important factors to be learnt before realizing the business in Turkey.
Thirdly, type of the company you wish to establish in Turkey. You can find our post in connection with this classification, types of companies in Turkey. There are some nuances between the types of the companies in Turkey. However, we can say that the main two options are limited liability companies and joint stock companies.
Fourthly, requirement of foreigner employment in Turkey. The process of company formation in Turkey is simple and smooth. Also, there are no restrictions for foreigners who wish to establish a company in Turkey. However, foreigner employment is an important point that effects the process. The work of the foreigner in Turkey is subject to work permit. Therefore, if your business requires foreigner employment you should search the conditions. Since such conditions may highly affect the feasibility of your business.
Fifthly, the licences you may need for your business in Turkey. The company you have in Turkey may generally be sufficient for your plans in Turkey. However, some type of products or services may require further licences. Such as medical related businesses are generally subject to further licenses. The further licenses may make your plans more complex. Even such complexity may change your idea to settle down your business in Turkey. Therefore, before going further it is better to research the licenses you may require for your products and services in Turkey.
Sixthly, the shareholding structure of the company you are planning to establish in Turkey. A real person or a legal entity can be the shareholder of the company in Turkey. You can read our article Can My Company Be A Shareholder To A Company in Turkey for the details of legal entity shareholding. Additionally, a real person can be a shareholder for a company in Turkey. In terms of document you require those two options are different than each other at the following headings we will address which documents you need to establish a company in Turkey.
Finally, which commercial name you are planning to use for your company in Turkey. Actually, such decision does not have significant impact on your business. Since, this will not be your brand, this choice will be for the commercial name of a company in Turkey. You can always decide different trade marks for your products and services. For this purposes please visit our service trademark registration in Turkey. However, commercial name is a mandatory element for company registration in Turkey. There is a procedure to select a commercial name in Turkey. Consequently, you have flexibility but you are not completely free to decide the commercial name of the company. Furthermore, the name in your mind might be already used by another company in Turkey. Therefore, you need to make some preparations for the commercial name for your company in Turkey.
The above seven item are important before you form a company in Turkey. Such elements are not listed in law or regulations. However, these are the important elements you need to consider before opening a company in Turkey.
Steps of Company Formation in Turkey
We can say that, you require below steps to have a fully operational company in Turkey.
Firstly, trade registration in Turkey. In Turkey, the relevant chamber of commerce does the trade registry activity. Each city has its own chamber of commerce in Turkey. Therefore, the selection of the city is also important before the trade registry. When you register your company in one city of Turkey, it does not restrict you to do business in other cities. Majority of the entrepreneurs choose İstanbul as the HQ of their company.
Before trade registration some information and documents shall be provided to relevant chamber of commerce. Also, an appointment shall be obtained for the trade registration of the company in Turkey. To let your lawyer or accountant to act on your behalf you have to grant power of attorney them. Later, your consultant can attend the appointment on your behalf and can make the necessary preparations.
Secondly, you need to do tax opening for your company in Turkey. Turkey, is not off-shore company, you need to pay tax for your revenues. Furthermore, you need to do tax refunds of your company.
Finally, commercial bank account opening of the company. This is not mandatory for your company in Turkey. However, banking system is considered as “must” in this age. In order to open a commercial bank account, the banks require some corporate documents of the company. Besides, the banks may need to physically see the company director at the time of bank account opening. You can get benefit for the internet and mobile banking features of Turkish banks for your company.
Moreover, if you have export plans you need to work with customs broker to prepare your company in Turkey for exporting.
Documents for Company Formation in Turkey
Though Turkish market is freely open to foreign investors still online company registration in Turkey is still not possible. Therefore, the prospective shareholder will need some paperwork for opening a company in Turkey. Since the documents are the most crucial element of the process we advise you to obtain professional service from experts. The documents you need may vary based on the shareholding structure of the company. As we explained earlier, a real person or a legal entity can be a shareholder for the company in Turkey. In terms of documents, there are differences between those two alternatives. If the investor wishes to form a company as a real person and if he is in Turkey just his passport will be sufficient. If he visits a consultant with a passport with the co-operation of the consultant, he may obtain potential tax number and grant power of attorney. The account or the lawyer may follow the rest of the process through power of attorney. Such power of attorney and the passport of the shareholder shall be attested by Turkish Notaries.
However, if the investor wishes to open a company in Turkey with a legal entity such documents are a bit more complex. Please find below the documents for legal entity shareholding company formation in Turkey;
Power of Attorney: such power of attorney should be granted from the shareholder company to a lawyer or accountant in Turkey. The consultant should provide or review the content of the power of attorney for the sufficiency.
Certificate of Activity: A document which shows that the shareholder company is active in the country of origin. It shall also give some information about the company.
Board of Resolution: Such board of resolution shall be from the shareholder company. Additionally, it shall include some information about the company to be established in Turkey. Therefore, the review of the board of resolution by a Turkish consultant is crucial.
Such above documents shall be attested by Turkish Consulates or apostilled by the relevant authorities.
Do I Need an Address for My Company in Turkey?
Generally, foreigner entrepreneurs do not have an address in Turkey. However, for company registration in Turkey an address is required. Such address will be registered to the trade registry. Moreover, this address will be used for the official correspondence with regard to company.
Some investors do not need operational business places. Such as factory, shop, restaurants etc. Even though some companies do not need an office. Since, after the covid 19 pandemic home office working style became very common around the world. However, this situation does not provide an option not to have an address for the company. Address in Turkey even at the district of relevant chamber of commerce still a mandatory element for company registration in Turkey. On the other hand, the rental fees of the offices are quite expensive. Therefore, majority of the company shareholders do not wish to allocate such budget only to fulfil this requirement. As a result of this situation an option name “virtual office” arose. Virtual office providers in Turkey offer variety of options to their clients. Such as only a legal address or ready office furthermore meeting rooms and other office facilities. Based on the type of the service the rental fee for the virtual office differs. You may find more information about the virtual offices and other alternatives in Turkey at our blog post.
The other alternative for the legal address can be the “home” of the shareholder. Some of the investors plan to relocate their life to Turkey. Therefore, renting a home and using the home address for the company address can be a good alternative.
On the other hand, some business may require operational business places other than offices. Such as factories and restaurants. In this scenario the legal address for the company in Turkey can be those places. However, such working places may require further permits from the relevant authorities, such as municipalities. Therefore, please consider the requirements for the working places before setting up business in Turkey.
Overall, for company registration in Turkey you will definitely need a legal address. However, the type of the legal address can be determined based on your or your business requirement. Therefore, please consider the type, licenses, cost of the legal address before the registration of a company in Turley.
Company Bank Account Opening in Turkey
Having a bank account is not the mandatory process of LLC company formation in Turkey. However, in this age a company without a bank account can be considered useless. Therefore, it is considered as the part of company registration process in Turkey. There are lots of reputable banks in Turkey. You can review the list of active banks through the link of Banking Regulation and Supervision Agency. There are also numerous participation banks in Turkey for the Muslim investors. The reputation and services of Turkish banks are quite well. Additionally, all banks in Turkey have successful mobile and internet banking options.
Turkish banks are friendly to foreigner investors. However, some nationalities have some restrictions due to the internal policies of the banks. Therefore, if having a company bank account in Turkey is essential for you please do a well research before taking action about your plans.
The company bank account opening in Turkey is quite solid process. There are document lists of each bank based on their internal policies. Some documents are related with the company in Turkey. On the other hand, some other documents are about the shareholder. In order to have successful process it is better to consider the bank account as the part of company formation in Turkey package of your consultant.