Legal Considerations for Setting Up a Company in Turkey as a Foreign Investor

Legal Considerations for Setting Up a Company in Turkey as a Foreign Investor

04.07.2026

Legal Framework for Company Formation in Turkey

Under Turkish law, company establishment is governed primarily by the Turkish Commercial Code (TTK, Law No. 6102) and related secondary legislation. The Code defines company structures, formation rules, management models, and registration procedures. Foreign investors are generally subject to the same rules as Turkish nationals unless specific sectors impose additional requirements. The TTK recognises several company types, with the Limited Liability Company and Joint Stock Company being the most common vehicles for commercial activity. Foreign investors seeking guidance on company formation, governance, or ongoing compliance may also consult a corporate lawyer in Turkey for legal support throughout the process.

Foreign investors benefit from equal treatment under the Foreign Direct Investment Law No. 4875, allowing them to establish companies without prior approval unless sector-specific regulations apply. Certain industries, including broadcasting, energy, and aviation, may require additional licences or compliance checks before commencing operations. While most sectors allow 100% foreign ownership, the Trade Registry may request notarised and apostilled documents when a foreign legal entity becomes a shareholder.

The Trade Registry Directorate oversees the company formation process, reviewing articles of association, shareholder data, and authorised representatives. Formation begins with drafting the articles through the MERSİS system, which assigns a unique reference number. After registration, companies must complete tax office registration, social security registration, where employees will be hired, and obtain any operational permits required for their sector. These steps establish the basic regulatory footprint of the company in Turkey.

Choosing the Appropriate Legal Structure

A Limited Liability Company is widely used by foreign investors and may be established by a single shareholder under the TTK. Shareholders’ liability is limited to their committed capital, and the company itself bears full responsibility for corporate debts. The articles of association outline the company’s activities, capital, management, and representation. Additional capital contributions may be required depending on regulatory considerations. Further structural details are explained in our internal article, Limited Company (LTD) in Turkey: Requirements, Capital, and Liability.

A Joint Stock Company is suitable for larger or more complex investment structures. It may also be formed by a single shareholder and is governed by a board of directors. Shares are generally transferable unless restricted by the articles of association. Certain regulated activities require incorporation in the A.Ş. form, and this structure also accommodates future investment rounds more flexibly. Governance principles, share classes, and transfer rules are explored in Joint Stock Company (A.S.) in Turkey: Structure, Shares and Governance.

The choice between an Ltd. Şti. and an A.Ş. depends on the scale of investment, governance expectations, and long-term planning. An Ltd. Şti. offers administrative simplicity and suits small to medium-sized operations. An A.Ş. provides greater flexibility in share transfer arrangements and corporate structuring, making it appropriate for investors anticipating expansion or multi-party shareholding. Foreign investors typically evaluate future funding needs and operational requirements before deciding on the structure. A more detailed comparison is available in our guide to company types in Turkey, including LTD, JSC, and branch structures.

Procedural Steps in Company Formation in Turkey

Company formation begins with preparing the articles of association in MERSİS, where information such as the company name, registered address, business purpose, capital, and authorised representatives is recorded. These provisions establish the legal framework for the company. Foreign shareholders acting through legal entities may need notarised and apostilled authorisations to verify signing authority. After drafting, the articles are submitted to the Trade Registry electronically.

Once formation documents are prepared, founders typically deposit initial capital contributions as required for the relevant company type. Banks provide proof of deposit for inclusion in the Trade Registry file. Although the TTK sets minimum capital thresholds, certain industries may require higher capital levels. Banks may request Turkish tax numbers for foreign shareholders before opening a capital deposit account. 

After the MERSİS documentation and capital evidence are complete, an application is submitted to the Trade Registry Directorate. The registry reviews the articles of association, shareholder information, and management appointments. Once approved, the company is officially registered and announced in the Turkish Trade Registry Gazette. Post-registration obligations include tax registration, activation of statutory books, and social security registration, where employees will be hired. Additional sectoral permits may also be required.

Compliance, Governance, and Operational Considerations

Both Ltd. Şti. and A.Ş. structures must maintain clear management and representation frameworks. An Ltd. Şti. appoints managers through the articles of association or shareholder decisions, while an A.Ş. must maintain a board of directors. These bodies ensure lawful operation, record-keeping, and adherence to resolutions. Statutory books, including the share ledger, resolution book, and commercial ledger, must be notarised before use. Governance obligations require consistent documentation and timely internal decision-making. Companies requiring assistance with governance, representation authority, or ongoing compliance may seek corporate legal services in Turkey to support the proper management of these obligations.

Following registration, companies must register with the tax office to obtain a tax identification number and establish their electronic notification system. Ongoing tax compliance includes periodic declarations, bookkeeping, and document retention in line with statutory requirements. Companies hiring employees must also register with the Social Security Institution (SGK) before employment begins. Sector-specific permits or municipal licences may apply depending on business activity.

Foreign investors often encounter delays when documents issued abroad require notarisation, apostille, and translation. Preparing these documents in advance helps maintain the incorporation timeline. Another frequent challenge involves defining representative authority. Under the TTK, representation must be recorded accurately, and discrepancies between internal resolutions and registry filings can affect binding corporate acts. Keeping authorised signatures updated supports operational continuity.

FAQ

1. What company types are most commonly used by foreign investors in Turkey?
Foreign investors typically choose between Limited Liability Companies (Ltd. Şti.) and Joint Stock Companies (A.Ş.), as both provide limited liability under the TTK.

2. Are there restrictions on sectors or ownership percentages for foreign investors?
Most sectors allow 100% foreign ownership under equal treatment rules, though regulated industries may require additional approvals.

3. What documents are required to complete company formation in Turkey?
Typical documents include articles of association, identification records, authorised signatures, capital deposit evidence, and, for foreign entities, notarised and apostilled corporate authorisations.

Summary

Legal considerations for company formation in Turkey require close attention to the Turkish Commercial Code, sectoral rules, and administrative procedures that apply to foreign investors. Understanding governance structures, registration steps, and compliance obligations ensures the company is established on a secure legal foundation. Clear documentation, accurate authorisations, and awareness of operational requirements reduce practical risks associated with company formation in Turkey, particularly where cross-border approvals are involved.

For professional legal assistance with your company formation process or ongoing legal counseling in Turkey, contact Gokalp Legal.

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