Why It Is Very Easy to Register a Company in Turkey

 

Turkey has become an increasingly attractive destination for investors and entrepreneurs due to its strategic location, growing economy, and business-friendly regulations. One of the primary factors that draw investors is the ease with which they can register a company. Over the years, the Turkish government has streamlined the company formation process, making it easier, faster, and more accessible for both local and foreign entrepreneurs.

In this article, we will explore why company registration in Turkey is considered easy, delving into the legal framework, bureaucratic processes, and the advantages offered by the Turkish system. By the end, you’ll have a clear understanding of the steps involved and why many see Turkey as a prime destination for starting a business.

1. Business-Friendly Legislation

One of the main reasons behind the ease of company registration in Turkey is its modern and simplified legal framework. The Turkish Commercial Code (TCC) has undergone several reforms, most notably in 2012, aimed at creating a more business-friendly environment.

Under the TCC:
– Both local and foreign investors have the same rights and obligations, meaning there is no discrimination between domestic and international entrepreneurs.
– The minimum capital requirement for establishing a limited liability company (LLC) is just 10,000 Turkish Lira (approximately $350 USD as of 2024).
– The shareholder requirement for an LLC is also minimal, needing just one shareholder and one director. This greatly simplifies the structure of new businesses, making it accessible to small startups and individual entrepreneurs.

2. Ease of Company Structures

In Turkey, the most common types of companies are:
– Limited Liability Company (LLC): This is the most popular structure due to its simplicity and limited liability for shareholders.
– Joint-Stock Company (JSC): More suited for larger businesses, it allows for shares to be traded and has stricter regulatory requirements.
– Branch Offices: Foreign companies can set up branch offices with relative ease, benefiting from the parent company’s resources without needing to establish a separate legal entity.

Each of these structures comes with its own benefits, but regardless of the structure, the registration process remains straightforward.

3. Streamlined Registration Process

The process of registering a company in Turkey has been greatly simplified, largely due to the digitization of many administrative services. Here’s an overview of the process:

a) Choosing the Company Type
The first step is selecting the type of company that fits your needs. Whether it’s an LLC, JSC, or a branch office, the required documentation varies slightly, but overall, the process remains simple.

b) Online Registration via MERSIS

The MERSIS system is an online platform that has transformed the company registration process in Turkey. It allows entrepreneurs to:
– Reserve their company name
– Complete registration forms
– Upload necessary documents

By digitizing the registration process, MERSIS has eliminated much of the paperwork and long waiting times associated with starting a business in many other countries.

c) Notary and Legal Requirements
While the MERSIS system handles most of the digital work, certain legal requirements such as notarizing documents (e.g., Articles of Association) must still be handled in person. However, Turkey has streamlined this process, with many notary services available across the country, ensuring that entrepreneurs can get their paperwork done quickly.

d) Tax Office and Social Security Registration

Once the company is established, it needs to be registered with the Tax Office. This step is also relatively simple, and the documentation is minimal. Furthermore, employees must be registered with the Social Security Institution (SGK), which is a straightforward process conducted via the online system.

e) Company Bank Account

Opening a corporate bank account is another crucial step in the company formation process. Most Turkish banks offer services in multiple languages and provide special assistance to foreign investors, making it easy to open an account.

4. No Need for Physical Presence

One major advantage of setting up a business in Turkey is that foreign investors are not required to be physically present to register their company. This means that the entire registration process can be handled by a local representative or law firm, which is especially beneficial for international entrepreneurs.

The flexibility of not needing to be in the country for every step of the process saves time and resources, allowing investors to focus on their business strategies.

5. Tax Advantages and Incentives

Turkey offers a range of tax incentives for both local and foreign investors. The Turkish government has implemented several measures to encourage investment, particularly in sectors like manufacturing, technology, and renewable energy. Some key incentives include:
– Corporate Tax Rate: Turkey has a competitive corporate tax rate of 20%, which is lower than in many European countries.
– Tax Exemptions and Reductions: Depending on the region and sector, there are various tax reductions and exemptions. For example, businesses in Technology Development Zones can benefit from tax advantages such as exemption from VAT, corporate tax, and income tax.
– Incentive Zones: Turkey is divided into several development regions, with each region offering different levels of incentives, such as customs duty exemptions, land allocation, and interest rate support.

These incentives make Turkey an appealing option for entrepreneurs looking to maximize their profits and reduce their tax liabilities.

6. Strategic Location and Access to Markets

Turkey’s unique geographical location, straddling both Europe and Asia, provides businesses with access to over 1.5 billion consumers in Europe, the Middle East, and Central Asia. Furthermore, as a member of the Customs Union with the European Union, Turkey offers seamless access to European markets.

This strategic advantage makes setting up a company in Turkey even more appealing, as businesses can easily export goods to multiple regions without the need for complicated trade agreements.

7. Availability of Skilled Labor

Turkey has a young and dynamic population, with a large pool of educated, skilled workers. The country is home to several prestigious universities that produce graduates in fields like engineering, technology, finance, and business. Furthermore, labor costs in Turkey are relatively low compared to Western Europe, making it an attractive destination for companies looking to balance cost and quality in their workforce.

8. Government Support and Assistance

In recent years, the Turkish government has been highly supportive of entrepreneurship and foreign investment. Several state-backed agencies, such as the Investment Office of the Presidency of Turkey, offer assistance to entrepreneurs looking to set up a business. These agencies provide guidance on legal requirements, incentives, and market opportunities, helping to make the process as smooth as possible.

Conclusion

In conclusion, Turkey’s business-friendly environment, streamlined registration processes, and strategic advantages make it one of the easiest countries in which to start a business. Whether you’re a local entrepreneur or a foreign investor, the simplified legal framework, online registration systems, and available incentives create an ideal environment for establishing and growing a company.

From choosing the right company structure to benefiting from tax incentives and government support, Turkey offers a robust platform for businesses looking to thrive in a dynamic market. The ease of registration is just one of many reasons why Turkey has become a top destination for entrepreneurs worldwide.