Company Formation in Türkiye: Legal Framework for Foreign Investors

Türkiye has become an increasingly attractive destination for international investors and entrepreneurs seeking to establish a presence in a dynamic, strategically located economy. With a growing consumer base, a skilled workforce, and proximity to Europe, Asia, and the Middle East, Türkiye offers a compelling business environment. However, understanding the legal framework for company formation is essential for a successful market entry.

1. Who Can Establish a Company in Türkiye?

Under Turkish Commercial Code and Foreign Direct Investment Law (No. 4875), foreign nationals enjoy the same rights as Turkish citizens when it comes to establishing a business. Individuals or legal entities can directly establish a company or become shareholders in an existing one. Türkiye does not require local partners for most types of businesses, allowing full foreign ownership in nearly all sectors.

2. Types of Companies Available

The most common legal entity for foreign investors is the Limited Liability Company (LTD). It requires:

• A minimum of one shareholder (individual or legal entity)

• 10,000 TRY in capital (as of 2025 regulations)

• A registered address in Türkiye

Alternatively, Joint Stock Companies (A.Ş.) are preferred for larger investments, especially those seeking to operate under a more corporate structure or eventually go public.

3. Steps for Company Formation in Türkiye

The general procedure to establish a company in Türkiye involves:

• Choosing a legal entity (LTD or A.Ş.)

• Preparing and notarizing Articles of Association

• Appointing directors or managers

• Registering with the Trade Registry Office

• Obtaining a tax identification number from the Turkish Tax Office

• Opening a corporate bank account

• Notifying the Social Security Institution (SGK), if hiring employees

All documents in a foreign language must be notarized and translated into Turkish.

4. Legal and Tax Considerations

Foreign companies and individuals are subject to the same tax regulations as Turkish entities. Corporate income tax is currently 20%, and VAT ranges between 1% and 20%, depending on the nature of the goods or services.

Additionally, depending on the sector, certain permits or licenses may be required (e.g., for finance, education, or healthcare businesses). Legal due diligence is essential to ensure compliance with Turkish commercial and investment laws.

5. Post-Registration Support

Once established, businesses must maintain proper accounting records and submit periodic tax declarations. It is also advisable to consult a legal advisor for:

• Employment contracts

• Intellectual property protection

• Commercial contracts

• Dispute resolution mechanisms

  
  

At Bosphorus Law Firm, we provide ongoing legal advisory services for foreign investors, ensuring your company remains compliant with Turkish regulations and best practices.

✅ Why Choose Türkiye?

Türkiye’s position as a regional trade hub, along with its investment-friendly legal framework, makes it ideal for international companies. Its double taxation treaties, incentive programs, and access to neighboring markets further strengthen its appeal.