Starting a Business in Turkey: The Ultimate Guide for Foreigners

Turkey has emerged as a prime destination for foreign investors and entrepreneurs. With its strategic location bridging Europe and Asia, a dynamic economy, and a supportive government, Turkey offers immense potential for business growth.

Whether you are interested in online company registration in Turkey or exploring the overall process of setting up a business in Turkey for foreigners, this guide has everything you need.

In this guide you will learn about:

• Benefits of starting a business in Turkey
• Who can start a business in Turkey?
• How to start a business in Turkey as a foreigner
• Online company registration in Turkey
• Costs of starting a business in Turkey
• Corporate tax in Turkey
• Challenges and solutions for foreign entrepreneurs in Turkey

Benefits of Starting a Business in Turkey

Strategic Location

Turkey’s position at the crossroads of Europe and Asia provides access to diverse markets, making it a hub for international trade. Its proximity to major economies in Europe, the Middle East, and Central Asia makes it a prime choice for businesses seeking global reach.

Growing Economy

Turkey is one of the fastest-growing economies in the world, with a focus on sectors like manufacturing, tourism, and technology. A young and dynamic workforce also contributes to its robust economic growth.

Business-Friendly Environment

The Turkish government has implemented policies to attract foreign investment, including tax incentives, reduced bureaucracy, and various free trade agreements.

Affordable Costs

From Turkey company registration costs to operational expenses, starting and running a business in Turkey is often more cost-effective than in many Western countries.

Who Can Start a Business in Turkey?

Anyone can start a business in Turkey. However, things are a lot easier if you obtain citizenship. Luckily, the Turkey Citizenship by Investment program offers one of the fastest ways to obtain citizenship, with a designated option for starting a business.

The investment scheme invites qualifying applicants to invest in Turkey, in exchange for lifelong citizenship rights. To qualify for Turkish citizenship by investment, you must:

• Acquire at least $400,000 worth of real estate OR
• Invest a minimum of $500,000 in fixed capital contributions OR
• Deposit at least $500,000 into a Turkish bank account OR
• Create jobs for at least 50 people in Turkey

How to Start a Business in Turkey as a Foreigner

Foreign entrepreneurs in Turkey have the same rights as citizens (those with a Turkish passport) when it comes to business ownership. Here is a step-by-step overview of the business setup process:

1. Choose Your Business Structure

The most common types of businesses for foreigners in Turkey are:

• Limited Liability Company (LLC): Requires at least one shareholder and a minimum capital of 10,000 TRY.
• Joint Stock Company (JSC): Ideal for larger businesses and requires a minimum capital of 50,000 TRY.

2. Obtain a Tax Identification Number

You’ll need a tax ID to carry out legal transactions. This can be obtained from any local tax office with your passport.

3. Register Your Company Name

Conduct a Turkey company register search through the Turkish Trade Registry to ensure your desired business name is available. You’ll need to reserve the name during the registration process.

4. Prepare Required Documents

Document requirements for starting a business include:

• Articles of Association
• Proof of address (lease agreement or ownership documents)
• Copies of shareholders’ passports
• Notarized signatures

5. Submit Documents and Pay Registration Fees

Submit your documents to the Trade Registry Office. Upon approval, you’ll receive a Turkey company registration certificate and your Turkey company registration number.

6. Open a Bank Account

You’ll need a local business bank account to deposit the minimum share capital and manage financial transactions.

7. Register for Social Security and Taxes

All businesses in Turkey must be registered with the Social Security Institution and obtain a tax registration.

8. Obtain Necessary Permits

Depending on your business type, you may need specific permits or licenses.

Online Company Registration in Turkey

Turkey allows for online company registration, making the process easier and faster. Foreigners can complete several steps, such as submitting the Articles of Association and paying fees, via the Turkish Trade Registry Gazette’s digital platform.

Costs of Starting a Business in Turkey

Here’s an overview of the main expenses you may incur for company formation in Turkey:

 

Corporate Tax in Turkey

Based on taxes in Turkey, corporate tax is currently set at 25%. This rate applies to most companies, however a higher rate of 30% applies to financial institutions such as banks and insurance companies.

Turkey also has 18 free zones, offering a special tax regime, including:

• No stamp duty
• No corporate or income tax
• No property or real estate taxes
• No VAT on logistics to third party countries

The 18 free zones include:

Challenges and Solutions for Foreign Entrepreneurs in Turkey

Navigating Bureaucracy

Turkey’s bureaucracy can be a daunting challenge for foreign entrepreneurs. Complex procedures for business registration, obtaining permits, and meeting legal requirements may result in delays and frustration.

Common hurdles:

• Language barriers when dealing with government offices.
• Lengthy processes for acquiring work permits and business licenses.
• Confusion over the specific company documents required for various filings.

Solutions:

1. Hire a local law firm or legal advisor: Experienced professionals can guide you through the registration process, ensuring all documents are accurate and submitted on time.
2. Learn basic Turkish: While not mandatory, understanding key phrases can help smooth interactions with local officials. Additionally, if you’re planning on moving to Turkey, learning some of the local language is highly recommended.

Understanding Turkish Business Culture

Cultural differences can sometimes lead to misunderstandings or inefficiencies in the workplace. Turkish business culture places significant emphasis on relationships, trust, and communication.

Key differences to consider:

• Building trust and rapport is essential before finalizing any agreements.
• Meetings often include informal discussions before diving into business matters.
• Hierarchies are respected, and decisions are typically made by senior leaders.

Tips for smooth operations:

1. Invest in networking: Attend local business events and connect with Turkish entrepreneurs. Personal connections often facilitate smoother negotiations.
2. Be patient and flexible: Building trust takes time; don’t rush the process.
3. Adapt to communication styles: Direct communication is appreciated, but politeness and courtesy are equally valued.

Ensuring Compliance with Turkish Laws

Staying compliant with Turkish laws is critical to avoid penalties and ensure long-term success. Taxation, employment regulations, and trade compliance are areas that require close attention.

Key areas to monitor:

• Tax regulations: Ensure timely filing of Value Added Tax (VAT), corporate income tax, and payroll taxes at the relevant tax office.
• Employment laws: Understand the minimum wage, working hours, and social security contributions.
• Trade compliance: Follow import/export regulations if your business involves international trade.

Solutions:

1. Hire a certified accountant: Local accountants are well-versed in Turkish tax laws and can help maintain accurate records and meet deadlines.
2. Stay updated on changes: Regularly check announcements from the Revenue Administration (Gelir İdaresi Başkanlığı) and other regulatory bodies.
3. Use legal support: Consult with lawyers specializing in Turkish business law to review contracts and ensure full compliance.

Frequently Asked Questions About Starting a Business in Turkey

Can a foreigner start a business in Turkey?

Yes, foreigners can start a business in Turkey. The Turkish government allows non-citizens to own and operate businesses across various industries. As long as you follow the legal procedures, you can establish a company and own it entirely.

What are the main benefits of starting a business in Turkey?

• Strategic Location: Turkey bridges Europe and Asia, making it an ideal hub for trade and logistics.
• Large Market: With a population of over 85 million, there’s significant domestic demand.
• Competitive Costs: Labor, real estate, and operating costs are lower compared to many European countries.
• Government Incentives: Tax benefits, grants, and free trade zones support entrepreneurs.
• Growing Economy: Turkey has a rapidly growing economy with increasing opportunities in sectors like technology, manufacturing, and tourism.

What types of businesses can foreigners open in Turkey?

Foreigners can open various types of businesses, including:

• Limited Liability Company (LLC)
• Joint-Stock Company (JSC)
• Branch Office (same activities as parent company)
• Liaison Office
• Sole Proprietorship

LLCs are the most popular choice due to their ease of setup and the limited liability they offer, protecting owners from being personally responsible for the company’s debts.

How much does it cost to open a business in Turkey?

The cost of registering a company in Turkey varies, but on average:

• Company registration fees: $1,000–$2,500
• Notary and translation fees: $300–$500
• Minimum capital requirements:
  • LLC: 10,000 TRY (approx. $370)
  • JSC: 50,000 TRY (approx. $1,850)

Other expenses include legal, accounting, and consultancy fees.

What are the steps to start a business in Turkey as a foreigner?

1. Choose a business type and name.
2. Prepare and notarize the Articles of Association.
3. Deposit the minimum capital in a Turkish bank.
4. Register the company with the Trade Registry Office.
5. Obtain a tax identification number.
6. Apply for any necessary business permits.
7. Register with the Social Security Institution for employee contributions.

Is Turkey a good place to start a business?

Yes, Turkey offers a favorable business environment with a strong consumer market, growing infrastructure, and supportive government policies. However, challenges like bureaucracy and navigating regulations may require professional assistance.

What documents are needed for company registration in Turkey for foreigners?

• Passport copies of shareholders and directors
• Turkish tax identification numbers for shareholders
• Notarized Articles of Association
• Proof of address for the business headquarters
• Bank receipt for the deposited capital
• Application forms from the Trade Registry Office

How long does it take to register a company in Turkey?

The process typically takes 5–10 business days, depending on how quickly the required documents are prepared and submitted.

Can foreigners own 100% of a company in Turkey?

Yes, foreigners can own 100% of a company in Turkey. There are no restrictions on foreign ownership for most business types.

Are there restrictions on business activities for foreign-owned companies in Turkey?

Most industries are open to foreign companies, but there are some restrictions in sectors like energy, mining, and defense. Special permits or partnerships with Turkish entities may be required in these cases.

What are the ongoing compliance requirements for a registered company in Turkey?

• Filing annual financial statements with the Trade Registry.
• Paying corporate income tax
• Submitting monthly VAT returns (if applicable).
• Paying employee-related taxes and social security contributions.
• Renewing business permits and licenses as required.

What are the tax incentives for foreign-owned businesses in Turkey?

Turkey offers several incentives, such as:

• Reduced corporate tax rates in Free Trade Zones.
• VAT exemptions for certain industries.
• R&D incentives for innovation-based businesses.
• Customs duty exemptions on imported goods for export-oriented businesses.

How can foreigners obtain a Turkey company registration certificate?

The company registration certificate is issued by the Trade Registry Office after successful registration. It can be collected in person or accessed online through the e-Devlet portal.

How to open a bank account for a company in Turkey?

To open your company’s bank account, you need:

• Company registration documents.
• Tax identification number.
• Articles of Association.
• Proof of address for the company.

Is it possible to register a company in Turkey remotely?

Yes, foreigners can register a company in Turkey remotely online. However you may need to grant a Power of Attorney to a local representative or consultant further down the line to handle legal formalities on your behalf.