Establishing a Business in Turkey: A Comprehensive Guide
Turkey, with its strategic location bridging Europe, Asia, and the Middle East, has long been an attractive destination for foreign investment. The country holds global significance, making it a preferred choice for international companies and organizations looking to establish their presence in and around Turkey’s major cities. This article aims to guide you through the process of Establishing a Business in Turkey.
Choosing the Right Business Structure
Foreigners looking to set up a business in Turkey have several options, including cooperative companies, commandite companies, joint-stock companies, liaison offices, or opening a branch of an existing foreign company. However, for simplicity, we will focus on the setup of a private limited company, which is a relatively straightforward and popular choice.
Can Foreigners Run a Private Limited Company in Turkey?
Absolutely. A private limited company in Turkey can be established by both Turkish and non-Turkish nationals. This makes it an accessible option for international entrepreneurs looking to operate a business in Turkey.
Seeking Expert Advice
One of the initial steps in establishing a business in Turkey is to consult with a legal advisor who is well-versed in company law. Additionally, you can also seek guidance and information from various reputable sources:
- British Chamber of Commerce Turkey (BCCT)
- The Turkish Embassy
- The Turkish-British Chamber of Commerce and Industry (TBCCI)
Consider Using a Company Formation Agent
In Turkey, as in Europe and other countries, there is an emerging market for company formation agents. These agents can provide valuable assistance, saving you time and potential hassle. When considering a company formation agent, research their track record and the expat companies they have helped establish. The quality of services provided by these agents can vary, so choose wisely.
Selecting the Right Business
Most expatriates in Turkey opt to establish businesses associated with tourism or catering to the needs of fellow expats. Common choices include restaurants, bars, hotels, shops, real estate agencies, maintenance companies, and holiday rental companies. These businesses are relatively easy for foreigners to manage and organize.
However, it’s essential to be aware that certain business types require prior approval from the Ministry of Industry and Commerce, such as banks, factoring, private financial institutions, foreign currency exchange offices, companies subject to Capital Markets Law, operators of free-trade zones, and public warehousing.
Understanding the Costs
The costs associated with setting up a Turkish limited liability company can vary from the UK and other countries. Establishing a private limited company typically requires an initial capital of 5,000 Turkish Liras (TL). Of this, 25% must be paid within three months from the date of establishment, with the remaining amount to be paid within three years. Once your company is set up, you must register it with the local trade registry and tax office.
Setting Up a Turkish Limited Liability Company
Surprisingly, it can take as little as 24 hours to establish a limited company in Turkey if all the necessary paperwork is promptly completed and meets the approval of the Trade Registry. However, the timeline may be extended if you encounter delays or are unprepared.
The Setup Process
For foreigners, the Articles of Association must be drawn up in accordance with Article 279 of the Turkish Commercial Code. The document should be signed and drafted by the founding members of the company, and it must include the term “limited” in the company’s name.
Organizers must provide their full names, nationalities, addresses, surnames, and trading addresses, which should be officially translated and notarized when required. Additionally, it’s essential to choose an original trading name that hasn’t been used or registered by any other individual or company to avoid confusion.
Registering Your Turkish Company
Trade registry offices can be found in most major cities and towns throughout Turkey. After drafting your Articles of Association and having them notarized, contact the Trade Registry within 15 days to complete the official trade registry for your company. Ensure that you have the following requirements ready:
- Filled company registration form
- Written application or request
- Proof of being a pioneer member
- A letter of commitment to abide by Article 29 of The Trade Registry Regulations
- Payment receipt (usually 1/1000 of the company’s capital) to be deposited in the Customers Fund Account
While it may seem like a daunting process, with proper preparation and legal knowledge, setting up your business in Turkey can be a smooth and efficient procedure. If you’re not fluent in Turkish, it’s advisable to have a native speaker accompany you during the process to avoid any potential misunderstandings or delays.
Any private company operating in Turkey is required to pay full taxes on all its profits. Additionally, you’ll need to engage the services of an accountant, as accountants in Turkey operate differently from those in Europe, often charging a monthly fee that can vary in cost.
Doing Your Homework
Before diving into the process of establishing a business in Turkey, conducting thorough research is crucial. Seek advice from fellow expatriates who have experience in the industry, and consult with a lawyer and an accountant to assess the feasibility of your project. Understanding the risks and challenges involved will prepare you for potential obstacles.
Outlining Your Business Plan
Clearly define your goals and identify your focus areas before launching your venture. Research your expenses, including marketing, accountant fees, staffing, taxes, and more. While a formal business plan may not be required, it will help monitor your progress and plan for future projections.
In conclusion, setting up a business in Turkey is an achievable endeavor with the right approach and preparation. Ensure that you have the necessary documents and expert advice, and adhere to legal requirements. With the proper planning, you can embark on a successful business venture in Turkey.
At Ideal Estates, we are well-versed in Establishing a business for foreign investors and can assist you through every step.