Company Types in Turkey: Legal Overview of LTD, JSC, and Branch Structures

Company Types in Turkey: Legal Overview of LTD, JSC, and Branch Structures

Understanding the main types of companies in Turkey is an essential first step for any foreign investor preparing to start a business. Under Turkish Commercial Code No. 6102, the three structures most commonly used by international entrepreneurs are the limited company (LTD), the joint stock company (JSC), and the branch of a foreign entity.

If you are planning to operate in Turkey, knowing how these structures work in law and in practice will help you choose a vehicle that suits your operational needs, risk profile, and long-term strategy. This guide provides an overview of LTD, JSC, and branch structures, with practical context relevant to regions such as Fethiye, Antalya, Muğla, and Istanbul.

Overview of company structures in Turkey

Foreign investors in Turkey typically select from the two capital companies most used in practice:

• Limited liability company (Limited Şirket – LTD)
  
  
  

• Joint stock company (Anonim Şirket – JSC)
  
  
  

A foreign company may also register a branch (şube), which is not a separate legal entity under Turkish law.

Statistics frequently cited by Turkish chambers of commerce and professional sources indicate that approximately 82% of companies in Turkey are limited liability companies and about 13% are joint stock companies, with the remainder mainly cooperatives and other forms. This aligns with market experience: most domestic and foreign investors favour an LTD for operational simplicity, while larger or more regulated projects often use a JSC.

Limited company (LTD) in Turkey

A limited company in Turkey is the most commonly established structure among foreign investors. It is suitable for small and medium-sized businesses operating in sectors such as tourism, marine services, consultancy, retail, real estate management, import–export, and IT services.

Legal structure and capital

Under Turkish law, an LTD may be formed by one or more shareholders, who may be individuals or legal entities. Shareholders’ liability is generally limited to the capital they undertake to contribute.

For companies established on or after 1 January 2024, the minimum capital for an LTD is 50,000 TL, following Presidential Decree No. 7887, which amended the capital requirements in the Turkish Commercial Code. For companies incorporated before 1 January 2024, there is no obligation under current legislation to increase their capital to the new minimum threshold. In practice, some companies choose to raise their capital voluntarily for reasons such as corporate governance standards, banking requirements or commercial partnerships, but this is not a legal requirement.

Incorporation and management

Most LTD establishments are completed through the Central Registration System (MERSIS), with articles of association prepared in electronic format and then registered at the relevant Trade Registry. The process typically includes tax office registration and opening a bank account.

Key points in practice include:

• At least one director (manager) is required.
  
  
  

• There is no nationality requirement for directors.
  
  
  

• The company must have a registered address in Turkey for official correspondence.
  
  
  

Foreign shareholders often establish an LTD via a notarised and apostilled power of attorney, enabling a Turkish lawyer to sign and submit documents. This approach is widely used in Fethiye, Antalya and other regions where investors may not be present in person.

Share transfers

In an LTD, share transfers are more regulated than in a JSC. Typically:

• Shares are transferred through a notarial share transfer agreement.
  
  
  

• The transfer requires approval by the general assembly, unless the articles of association provide otherwise.
  
  
  

• The transfer becomes effective against third parties only after registration with the Trade Registry.
  
  
  

This framework provides stability and control for closely held structures.

When an LTD is suitable

An LTD in Turkey is generally appropriate when you:

• Operate a small or medium-sized business in sectors such as tourism, marine services, consultancy, retail, import–export, IT, or real estate management.
  
  
  

• Prefer a straightforward corporate structure with defined governance rules.
  
  
  
  

• Expect a stable shareholder base without frequent changes in ownership.
  
  
  
  

• Intend to establish commercial activities in regions such as Fethiye, Antalya, or Muğla, where foreign-owned SMEs commonly use the LTD model.
  
  
  

Joint stock company (JSC) in Turkey

A joint stock company in Turkey is designed for larger or more capital-intensive projects. It is often chosen by investors seeking more flexible share structures, potential capital markets access, or operation in regulated sectors.

Capital and shareholder requirements

For JSCs incorporated on or after 1 January 2024, the minimum share capital is 250,000 TL. Non-public JSCs that adopt the registered capital system must have at least 500,000 TL of initial capital. Under Turkish law, a JSC can be established by a single shareholder, and shareholder liability is limited to any unpaid portion of the subscribed share capital.

Corporate governance and audit

A JSC is governed by a board of directors, which may consist of one or more members. Legal entities can serve as board members through real-person representatives.

Depending on size, sector, and financial thresholds, many JSCs fall under independent audit obligations introduced by secondary legislation. Audit requirements are particularly relevant in sectors such as energy, finance, logistics, and manufacturing.

Shares and transferability

JSC capital is divided into shares, which provide more flexible transfer possibilities compared with LTD shares. Subject to statutory and contractual restrictions:

• Registered shares may be transferred by endorsement and delivery.
  
  
  

• Bearer shares are now subject to centralised registration requirements, limiting the use of anonymous bearer instruments.
  
  
  

This structure is particularly attractive for venture capital and private equity investors, cross-border joint ventures, and multi-stage investment plans, as share transfers can be completed without repeated notarial procedures.

When a JSC is suitable

A JSC may be preferable if you plan a long-term or large-scale investment, intend to bring in external investors, operate in a sector where a JSC structure is required, or need a more sophisticated share and governance framework. In practice, many holding companies and regional headquarters in Istanbul and other major commercial centres operate as JSCs for these reasons.

Branch offices of foreign companies

A branch allows a foreign company to conduct commercial activities in Turkey without forming a separate Turkish legal entity. It is often used for market entry or where the parent company wishes to retain a high level of direct control.

Legal status and liability

A branch does not have a separate legal personality under Turkish law. It is considered an extension of the foreign head office, and the rights and obligations of the branch belong directly to the parent company. 

There is no statutory minimum capital for a branch, although the parent company usually allocates working capital to meet operating expenses.

Establishment and representation

To establish a branch, the foreign company must provide:

• Its articles of association and up-to-date trade registry records from its home jurisdiction.
  
  
  

• A board resolution authorising the opening of a branch in Turkey.
  
  
  

• Documents appointing at least one authorised representative in Turkey.
  
  
  

These documents usually require notarisation and apostille abroad, followed by sworn translation and notarisation in Turkey before registration with the Trade Registry and tax office.

The branch representative acts on behalf of the foreign company before Turkish authorities and third parties.

Tax and compliance

In tax terms, a branch is treated similarly to a local company with respect to its Turkish-source income. It must:

• Register as a corporate taxpayer in Turkey.
  
  
  

• Maintain statutory accounting books in Turkish.
  
  
  

• Submit monthly and annual tax returns.
  
  
  

• Register with the Social Security Institution (SGK) if it employs staff.
  
  
  

Branches are commonly used by foreign companies in sectors such as construction, shipping, and specialist services where projects are controlled closely from abroad.

When a branch is suitable

A branch may be suitable when you:

• Want to operate in Turkey while maintaining direct control at the parent company level.
  
  
  

• Do not require a distinct legal entity in Turkey.
  
  
  

• Plan projects where the brand, contracts, and risk remain consolidated in the overseas company.
  
  
  

Practical considerations for foreign investors

Tax registration and banking

All company types and branches that carry out commercial activities are required to register with the tax office. Banks may request detailed documentation on the company, directors, and ultimate beneficial owners before opening a Turkish bank account, particularly where foreign shareholders are involved.

Registered office requirements

LTDs, JSCs, and branches must have a registered address in Turkey. Many smaller businesses use serviced or virtual offices that comply with Trade Registry and tax office requirements, especially in cities such as Fethiye and Antalya, where foreign-owned entities are common.

FAQ

Can foreigners own 100% of a company in Turkey?

Yes. Foreign individuals and foreign legal entities can own all shares in an LTD or JSC under Turkish law. This is subject only to sector-specific restrictions, and it is separate from the rules that apply to foreign ownership of real estate in certain restricted zones.

How long does incorporation take?

Once documentation is prepared and bank procedures are complete, registration of an LTD or JSC is often completed within several working days. Branch establishment may take longer due to notarisation and apostille requirements. Timelines can vary between cities and Trade Registry offices.

Is a physical office required?

A registered address in Turkey is required for LTDs, JSCs, and branches. This does not always have to be a traditional office; serviced or virtual office solutions can be used if they meet legal criteria and are acceptable to the Trade Registry and tax authorities.

Summary

The main company types used by foreign investors in Turkey are the limited company (LTD), the joint stock company (JSC), and the branch of a foreign company. An LTD is generally suitable for small and medium-sized enterprises seeking a practical and flexible structure. A JSC is preferable for larger or regulated projects or where external investment is expected. A branch enables a foreign company to operate in Turkey without creating a separate legal entity, while keeping control and risk at the parent company level.

Based in Fethiye and assisting investors across Antalya, Muğla, Istanbul, and Turkey, we support foreign entrepreneurs in selecting the appropriate structure, completing incorporation, and managing ongoing compliance requirements.

For professional legal assistance with establishing an LTD, JSC, or branch in Turkey, contact Gokalp Legal.

This article provides general information and does not constitute legal advice.