Company Formation in Turkey: Step-by-Step Legal Guide for Foreigners
Company Formation in Turkey: Step-by-Step Legal Guide for Foreigners
24.11.2025
Turkey has become a strategic base for foreign entrepreneurs who want access to both European and Asian markets. Under Turkish business law, foreign nationals are generally entitled to establish companies on the same terms as Turkish citizens, subject to a clear set of legal and administrative steps.
If you plan to open a company in Turkey, understanding how company types, registration procedures, tax rules, and residence options fit together will help you structure your investment correctly from day one.
In this guide, we explain the company formation process in Turkey step by step for investors, international entrepreneurs, and expats who wish to operate a business in cities such as Istanbul, Antalya, Muğla, and Fethiye.
1. Legal Framework for Foreign Investors in Turkey
1.1 Equal treatment under Turkish business law
The main legislation that protects foreign investors is the Foreign Direct Investment Law No. 4875. Under this law, foreign investors are generally free to make investments and are subject to equal treatment with domestic investors, unless a specific sectoral or security-related rule applies.
In practice, this means that as a foreign investor in Turkey, you may:
Establish any company type that a Turkish citizen can establish.
Own 100% of the shares in a Turkish company.
Become a director or authorised signatory.
Acquire movable and immovable assets for commercial use.
Transfer profits abroad, subject to tax and banking rules.
1.2 Turkish Commercial Code and secondary regulations
Company structures, management rules and shareholder rights are regulated mainly by the Turkish Commercial Code (TCC) No. 6102. Additional rules arise from:
Tax legislation.
Social Security (SGK) legislation.
Labour law.
Sector-specific licensing regulations.
For most foreign entrepreneurs, the key point is that the legal framework is standardised nationally, although practical implementation can differ slightly between local Trade Registry offices.
1.3 Scale of foreign investment in Turkey
According to the Presidency of the Republic of Türkiye Investment Office, the number of companies with international capital reached 86,418 by the end of 2024, up from 5,600 in 2002.
This confirms that foreign-owned companies are now a stable and significant part of the Turkish economy.
2. Choosing the Right Company Type in Turkey
The two most common vehicles for foreign investors are the Limited Liability Company (LTD ŞTİ) and the Joint Stock Company (AŞ). Both are capital companies with separate legal personality and limited liability.
2.1 Limited Liability Company (LTD ŞTİ)
For many foreign investors in Turkey, especially small and medium-sized ventures, the limited company is the usual starting point.
Key features:
Minimum one shareholder (individual or legal entity).
Shareholders’ liability is limited to their capital commitment.
Management by one or more directors.
Flexible internal structure.
Minimum capital requirement (current position):
Following amendments that took effect on 1 January 2024, the minimum capital for a limited liability company was increased from TRY 10,000 to TRY 50,000 for new incorporations.
This higher threshold is intended to strengthen corporate capitalisation and creditor protection.
An LTD is typically suitable for:
Consulting and professional service businesses.
Trading and import–export activities.
Tourism and hospitality services in Antalya, Muğla, and Fethiye.
Technology and small manufacturing operations.
2.2 Joint Stock Company (AŞ)
A joint stock company is usually preferred for larger investments, projects that may seek external financing, or sectors subject to heavier regulation.
Key features:
Capital divided into shares.
Shareholders’ liability limited to their subscribed capital.
Board of directors required.
Shares can be transferred more easily than LTD shares.
Minimum capital requirement (current position):
For AŞ companies, the minimum capital was increased to TRY 250,000 under recent amendments, and to TRY 500,000 for non-public companies using the registered capital system.
AŞ companies are often used in:
Finance and insurance (where permitted to foreign investors).
Larger industrial and infrastructure projects.
Companies intending to attract significant outside investors.
2.3 Factors to consider when choosing
When deciding between LTD and AŞ, you should evaluate:
Planned scale and capital of the business.
Number and profile of investors.
Sector-specific licensing and regulatory conditions.
Exit strategy and share transfer plans.
Long-term financing and potential listing plans.
Foreign investors often review company types with a legal professional to ensure their structure complies with Turkish commercial and tax regulations.
3. Pre-Incorporation Requirements and Planning
Before you formally start the incorporation procedure, you should prepare a number of key elements.
3.1 Shareholder and director details
You will typically need:
Passport copies for all foreign shareholders and directors.
Turkish tax identification numbers for each shareholder and, if applicable, each director.
A registered office address in Turkey for the company (a lease or serviced office address).
Information on shareholding percentages and capital distribution to be included in the Articles of Association.
Although under Turkish law a director does not need to be resident in Turkey or a Turkish national, it can be prudent for a foreign investor to have at least one director or authorised signatory who is reachable in Turkey and familiar with local procedures.
3.2 Registered office address
Every Turkish company must have a registered office address recorded at the Trade Registry and Tax Office.
In practice, foreign investors often use:
A leased office or shop.
A serviced or virtual office address (commonly accepted where properly documented).
Some investors use a serviced or virtual office arrangement, provided that the address meets the legal requirements for registration and official correspondence. The address must be suitable for official notifications.
3.3 Articles of Association (AoA)
The Articles of Association must include:
the company name and registered office address,
the scope of activity defined with appropriate NACE codes,
the share capital and the distribution of shares,
the rights and obligations of shareholders,
the management and representation structure,
the rules governing shareholder meetings and decision-making procedures,
any other provisions required under the Turkish Commercial Code.
The Articles of Association must comply with Turkish law and are registered with the Trade Registry Directorate.
3.4 NACE (activity) codes
Every company is registered with one or more NACE codes that describe its business activities. This classification affects:
Statistical reporting.
Eligibility for incentives.
Whether additional licences or permits are required.
In sectors such as tourism, logistics, private security or education, additional approvals may apply. It is prudent to confirm licensing requirements before fixing your activity codes.
4. Step-by-Step: How to Open a Company in Turkey
The steps below describe a typical process for company formation in Turkey. Exact documentation and sequencing can vary slightly between provinces and Trade Registry offices.
4.1 Obtain tax numbers
Each foreign real person shareholder should obtain an individual tax number from the Turkish Tax Office (vergi dairesi) or through the online system. Foreign legal entities that will become shareholders also require a corporate tax number.
This step is usually straightforward and can be handled with a representative holding a Power of Attorney (POA).
4.2 Issue a Power of Attorney
If you are outside Turkey, you can issue a POA:
At a Turkish consulate abroad, or
Before a local notary in your home country, followed by apostille/legalisation.
This POA typically authorises your lawyer to:
Obtain tax numbers.
Prepare and sign incorporation documents.
Apply to the Trade Registry and Tax Office.
Represent you before notaries and other authorities.
Using a POA allows you to open a company in Turkey without travelling for each signature. You can find more details in our guide on the Power of Attorney.
4.3 Draft the Articles of Association and prepare incorporation documents
Your lawyer or consultant will prepare:
Draft the Articles of Association in compliance with the Turkish Commercial Code
Signature declarations for directors.
Shareholder resolutions (if required).
Application forms for the Trade Registry.
In Turkey, the incorporation documents are prepared through the MERSİS online system before the appointment at the Trade Registry Directorate, where the final signatures and registration are completed.
4.4 Determine capital and bank procedures
For a newly formed limited liability company (LTD), it is standard practice to commit the share capital during incorporation and to pay it within the period permitted under the Turkish Commercial Code (TCC) and the company’s Articles of Association. For joint stock companies (AŞ), at least part of the capital must be deposited before registration, with the remainder to be paid within the statutory deadlines.
Banks generally request passports and tax identification numbers for authorised signatories, the draft or approved Articles of Association, and supporting documentation from the Trade Registry process. Bank compliance procedures may take longer where there are multiple foreign shareholders or complex cross-border ownership structures.
4.5 Trade Registry registration
Once the documents are finalised, an application is made to the relevant Trade Registry Office in the province where the company will be located (for example, Istanbul, Antalya or Muğla).
The Registry reviews:
AoA.
Proof of capital commitment or payment where required.
Signature declarations of directors.
Proof of address (lease agreement or title deed).
Identification of shareholders and directors.
If the application is accepted, the company is registered and acquires legal personality from the date of registration. The registration is then published in the Turkish Trade Registry Gazette.
4.6 Signature circular and MERSİS registration
After incorporation, the authorised signatories attend a notary to issue a signature circular. This document shows who can bind the company before banks, authorities and third parties.
At the same time, company details are maintained in the central MERSİS system, which holds standardised information for all companies.
4.7 Tax office and social security registrations
After registration, the company’s tax record is activated at the local Tax Office. This process may include address verification and the submission of documents confirming the company’s registered office.
If employees are hired, the company must also register with the Social Security Institution (SGK) to open a workplace file. Most companies work with a certified accountant (SMMM) to manage monthly tax filings, statutory books, and SGK declarations in accordance with Turkish law.
5. Corporate Tax and Ongoing Obligations
5.1 Corporate income tax rate
As of 2025, the standard corporate income tax rate in Turkey is 25% for most companies, and 30% for financial institutions. In addition, exporters may benefit from a five-point reduction on income derived exclusively from export activities.
These rates are set by law and may be changed by future legislation, so it is sensible to confirm the current rate when planning your investment.
5.2 Value Added Tax (VAT)
Most goods and services in Turkey are subject to VAT, with standard and reduced rates depending on the type of supply. The company must:
Charge VAT where applicable.
File periodic VAT returns.
Offset input and output VAT in accordance with tax regulations.
5.3 Social security and payroll obligations
If your company employs staff:
Employees must be registered with SGK.
Employee and employer contributions are calculated and paid monthly.
Payroll records and employment contracts should comply with Turkish labour law.
5.4 Accounting and annual compliance
Typical ongoing obligations for a Turkish company include:
Monthly VAT, withholding and other tax filings (where applicable).
Annual corporate tax return.
Maintenance and, where required, notarisation of statutory books.
Preparation of annual financial statements and, for larger companies, audits.
In most cases, these obligations are handled by the company’s contracted accountant under the supervision of management.
6. Residence and Work Permits for Company Owners
6.1 Does company ownership grant residence in Turkey?
Merely owning shares in a Turkish company does not automatically grant the right to reside in Turkey. Company owners who wish to live in Turkey typically apply for a short-term residence permit based on:
Commercial connections and business activities, or
Other grounds such as property ownership.
Applications are made to the Provincial Directorate of Migration Management in the city of residence.
6.2 Work permits for directors or managers
If a foreign shareholder or director will actively work in the company in Turkey, a work permit is usually required, unless they are covered by a specific exemption.
Work permits are granted by the Ministry of Labour and Social Security, and are subject to criteria related to:
The company’s capital and turnover.
Employment of Turkish staff.
Nature of the role and sector.
These thresholds and criteria are set by secondary legislation and policy, and they change from time to time.
Specific conditions for work permit applications may vary under current regulations and should be reviewed at the time of filing.
7. Practical Issues for Foreign Investors in Turkey
7.1 Role of lawyers and notaries
Under Turkish law, a lawyer is not strictly required to incorporate a company, but for foreign investors, it is often highly advisable.
A lawyer can:
Draft or review bespoke Articles of Association.
Coordinate POA, notary, and Trade Registry processes.
Clarify sectoral restrictions or licensing requirements.
Help structure shareholder agreements and corporate governance.
Notaries, on the other hand, mainly authenticate documents and declarations. In regions such as Fethiye, Antalya, and Istanbul, notaries and registries are generally familiar with foreign investors, but there can still be differences in practice.
7.2 Regional and sectoral considerations
Although the commercial framework is national, each region offers different business opportunities:
Istanbul – financial and commercial centre, suitable for trading, technology and service businesses.
Antalya and Muğla (including Fethiye) – strong tourism, real estate, hospitality and marine sectors.
Industrial regions – suited to manufacturing and logistics with access to free zones and organised industrial zones.
Choosing the right region can be as important as choosing the right company type.
7.3 Licensing and approvals
Certain activities require additional permits from sector regulators or local authorities, for example:
Travel agencies (Ministry of Culture and Tourism).
Private education institutions (Ministry of National Education).
Healthcare providers (Ministry of Health).
Certain manufacturing or environmental activities (relevant ministries and municipalities).
Before finalising your NACE codes and Articles of Association, it is prudent to check whether your intended activities fall within these regulated categories.
8. Typical Timeline for Company Formation in Turkey
Exact timing depends on how quickly documents are prepared and on the workload of the Trade Registry and banks. In many straightforward cases:
1–3 days – Obtain tax numbers and prepare POA (if needed).
3–7 days – Draft AoA and gather incorporation documents.
1–5 days – Complete Trade Registry registration once the file is ready.
A few additional days – Activate tax and social security registrations and open a bank account.
In practice, many foreign investors find that their company can be fully operational within approximately two to three weeks, provided documentation is complete and there are no sector-specific approvals required.
This is an indicative timeframe rather than a guaranteed deadline.
9. Frequently Asked Questions
1. Can foreigners own 100% of a company in Turkey?
Yes. Under the Foreign Direct Investment Law and the Turkish Commercial Code, foreign individuals and companies may typically own 100% of the shares in Turkish capital companies, unless a specific restriction applies in a regulated sector.
2. Do I need to be in Turkey to open a company?
Not necessarily. Many foreign investors incorporate through a Power of Attorney granted to a lawyer or representative. You may, however, need to visit Turkey later for banking, residence or sector-specific procedures.
3. Can any foreigner open a company in Turkey?
In most cases, yes. Different nationalities can establish companies in Turkey subject to general legal and security rules. Certain sectors and activities may require prior approvals or may be restricted for reasons of public order or national security.
4. Does opening a company automatically grant a residence permit?
No. Company ownership alone does not automatically provide residence rights. You must apply for a suitable residence permit and, if you will work in Turkey, for a work permit, each with its own legal requirements.
10. Summary
Turkey offers a clear and generally investor-friendly framework for foreign entrepreneurs who wish to open a company in Turkey. Foreign investors can choose between limited and joint stock companies with limited liability and equal treatment under Turkish business law.
Successful company formation in Turkey involves:
Selecting the appropriate company type and capital structure.
Preparing accurate Articles of Association and NACE activity codes.
Completing Trade Registry, tax and social security registrations.
Planning for corporate tax, VAT and employment obligations.
Considering residence and work permit options where relevant.
With proper legal guidance, foreign investors in Turkey can navigate these steps efficiently and build a compliant, durable corporate structure.
Based in Fethiye and serving clients across Antalya, Muğla, Istanbul, and throughout Turkey, we assist foreign investors with every stage of the company formation process.
If you are planning to open a company in Turkey or require advice on Turkish business law as a foreign investor, contact Gokalp Legal for professional legal assistance with your incorporation and ongoing compliance.
This article provides general information and does not constitute legal advice.
