Lara Candoğan



Opening a Company İn Turkey and Taxation Of Foreigners İn Turkey

In recent years, Turkey has been an attractive business location for foreign investors. Its geographical location, large consumer market and potential for economic growth have made it an ideal investment destination for many foreign companies. In addition, government support for foreign investors in Turkey is increasing day by day. Considering this situation, it is clear that there are many advantages for foreign investors to establish companies in Turkey. In this regard, having information about the process and taxation issues that foreign investors should follow to establish a company in Turkey will help them make investment decisions more accurately. 

Foreigners can establish companies in Turkey in accordance with the Foreign Direct Investors Law No. 4875. Law No. 4875 allows foreign investors to have the same rights and obligations as local investors. According to this law, foreign investors can establish all types of companies specified in the Turkish Commercial Code and the types of ordinary companies specified in the Turkish Code of Obligations. In this respect, the types of companies that foreigners can establish in Turkey are as follows; 

- Sole Proprietorships: Collective Company, Limited Company, Ordinary Company and Cooperative Company

- Capital Companies: Joint Stock Company, Limited Liability Company, Limited Partnership divided into shares

Foreigners are subject to the provisions of the Turkish Commercial Code No. 6102 and the Turkish Code of Obligations No. 6098 together with Law No. 4875 in terms of company establishment and commercial activities. In addition, there is also a regulation on the implementation of Law No. 4875. Finally, the Law No. 4817 on Work Permits for Foreigners also has provisions to which foreign investors are subject. 
Foreign investors can also open branches or representative offices in Turkey. While opening a company in Turkey means establishing a company as a completely new enterprise, opening a branch or representative office allows a foreign company to conduct business in Turkey. However, this article will focus on the incorporation of foreign companies. 
In order for foreigners to establish a company in Turkey, certain steps must be taken and procedures must be followed. The process of establishing a company varies depending on the type of legal entity and the type of company. In general terms, foreigners' company formation process and taxation will be discussed below. 


1. Preliminary Preparation Phase: It is extremely important to make preliminary preparations before the official application process. In this preliminary preparation process, it is first necessary to determine which type of company would be most appropriate for the foreigner to establish. Once this has been determined, a business plan for the establishment of the company should be prepared. This business plan should include the nature of the company's activities, goals and plans. In this context, important issues such as the legal process to be followed, how the company will be established, the title of the company, the scope of its activities, its headquarters, who will be the manager/representative, the capital and shares, and the shareholding structure of the company to be established should be determined and planned. 
Some companies require prior approval from the ministry prior to incorporation and the drafting of their articles of association. These companies are usually private sector companies that are specific to a particular sector or field of activity and it is important to check this prior to incorporation. 

2. Preparation of the Company's Articles of Association and other documents required for the establishment of the Company: After the preliminary preparation phase, the necessary documents for the establishment of the company must be prepared. The most important of these documents to be prepared is the articles of association of the company. For this reason, it is extremely important to prepare the articles of association of the company in accordance with the activities and objectives of the company. In addition, it is also necessary to consider the possible future situations of the company with the articles of association of the company. 
In addition to the articles of association of the company, documents such as the articles of association, the documents required to register with the Trade Registry Office in the place where the company is headquartered (these documents will be discussed in detail in the rest of the article) and the identity documents of the investors are required. In this regard, a list of documents to be requested from abroad should also be prepared. If the partner of the company to be established is a real person, only a notarized copy of the passport translation and tax number is sufficient for all the establishment procedures to be carried out, while if the company has a legal person partner, the number of documents to be requested from abroad will be more. Documents obtained from Turkey are directly attached to the application file, while those obtained from outside Turkey must be apostilled from the relevant country and notarized in Turkey or approved by the Turkish consulate where they were issued. Foreign language documents are also translated into Turkish by authorized translators.
3. Deposit of a certain portion of the capital into the bank account of the Competition Authority: Foreigners are also required to deposit money into the Competition Authority's account during the company establishment process. The company must deposit 0.04% of its total capital to the Competition Authority's account by paying from the cashier's office of the Trade Registry Office. 
4. Deposit of at least 25% of the Incorporation Capital to the Bank Account and Documentation: At least 25% of the capital committed in the articles of association of the company must be paid during the registration process, and the remaining part must be paid within 2 years after the registration of the company. The exception to this rule is limited liability companies. For foreigners to establish a limited liability company, it is not required that the capital is initially deposited in a bank account. It is sufficient and necessary to pay the founding capital within 2 years following the registration of the limited liability company.
5. Obtaining a Potential Tax Number for the Company: Potential tax number is required for non-Turkish citizen shareholders and non-Turkish citizen board members of the company. In this regard, it is sufficient for the foreigner to enter his/her personal information through the interactive tax office to obtain a foreign tax number. In order to obtain a potential tax number, the foreign real person is asked to enter his/her residence address through the interactive tax office. At this point, it is stipulated that the person must have a work permit or residence permit while the company is in the establishment phase. The obligation to obtain a work permit for non-resident board members of joint stock companies and other foreign partners of limited liability companies who are not company officials has been abolished. However, other foreign company partners must obtain a work permit.  The tax office requires a number of documents when issuing a potential tax number. These documents are as follows;
·        Petition for Registration Request

·        Articles of Association: The original agreement must be submitted. 

·        Lease Agreement: The registered address of the company must be shown as the place of lease. 

·        A power of attorney authorizing the company to apply to the tax office on behalf of the company: This is required if the process will be followed by a proxy. 

6. Establishment of MERSIS Number: Before starting the company establishment procedures, real and legal persons and foreign legal person representatives must be registered in the MERSIS System and MERSIS numbers must be established. If the preliminary preparation phase is carried out, a system registration request will be created through MERSIS with the tax number received and the passport registration made. After all these, the registration process begins.
7. Application to the Trade Registry Office for Registration Procedures: Following the preparation of all documents required for the establishment of the company, an application is made to the Trade Registry Directorate for the establishment of the company. The documents that must be submitted to the Trade Registry Directorate for registration application are as follows;
·        Petition: It must be signed by the company's board of directors or members authorized to represent the company. If the petition is signed by proxy, the original or certified copy of the proxy must be attached. In addition, the tax office to which the company will be affiliated must be specified in the petition and the petition must include a document breakdown.

·        Establishment Notification Form in case of a foreign partner: It must be submitted in one copy. 

·        Translated notarized passport copies of foreign real person partners

·        Document from the tax office of foreign real person partners showing their tax number or foreigner-specific identification number

·        Notarized residence permit in case foreign real person partners reside in Turkey

·        A bank letter showing the names, surnames and titles of the shareholders of the company depositing money to the bank account opened for the payment of the minimum amount specified in the law or the articles of association, and the amounts deposited by each shareholder and the total amount deposited: In the event that all or part of the company capital is subscribed in cash, at least ¼ of the nominal value of the shares subscribed in cash must be paid before the registration and the remaining part must be paid within twenty-four months following the registration of the company. 

·        Declaration of Chamber registration: It must be signed by the authorized persons and there must be photographs of the partners.

·        The original or certified copies of the expert report on the valuation prepared by the expert appointed by the court regarding the determination of the value of the in-kind capital placed in the company and the enterprises and goods to be taken over during the establishment and the original or certified copies of the court's expert appointment letter

·        Original letter from the relevant registry stating that there is no restriction on the capital in kind

·        Original document showing that the immovable property, intellectual property rights placed as capital in kind have been annotated in the registries where they are registered

·        Contracts, including those relating to the acquisition of property and businesses, between the company being established and the founders and other persons, which are related to the establishment

·        For companies whose establishment is subject to the permission or approval of the Ministry or other official institutions, the original of this permission or approval letter

·        Notarized document with signatures of the non-shareholder members of the Board of Directors accepting the duty: This document should specify the place of residence, nationality, identification number if a Turkish citizen, tax number or foreigner-specific identification number if a foreign national, and if a foreign national, a copy of the approved passport and a notarized residence permit for foreign nationals residing in Turkey should be attached.

·        In the event that a legal entity is elected to the board of directors, a notarized copy of the authorized body decision of the member of the board of directors of the legal entity taken together with the legal entity and on behalf of the legal entity, including the name-surname, address, nationality and T.R. Identification number of the real person designated by the legal entity, and in the event that a real person of foreign nationality is designated on behalf of the legal entity and this real person of foreign nationality resides in Turkey, a copy of the residence permit and notarized passport with Turkish translation

·        In case the member of the board of directors is a foreign legal entity appointed from outside the shareholders, a document containing the current registry records of the legal entity: This document must be certified by the notaries in the country where the company is subject to and by the Turkish Consulate in that country or by the Ministry of Foreign Affairs in Turkey, or in accordance with the provisions of the Convention on the Abolition of the Requirement of Notarization of Foreign Official Documents, and their notarized Turkish translations must also be made. If there is a foreign legal partner / legal officer, the tax number must be specified in the articles of association.

·        In the event that the parents of the minor company partner or any of the parents are shareholders in the company, the court's decision to appoint a trustee for the minor partner

·        In customs brokerage companies, the notarized customs brokerage permission certificate of the partners and the managers authorized for customs transactions appointed from outside must be submitted.

·        If the founders of the company to be established include municipalities and other local administrations and the unions established by them, a copy of the Council of Ministers Decree authorizing the participation of these organizations

8. Certification of Certain Legal Books Related to the Company: In Turkey, commercial companies are obliged to keep a number of books. The certification of these books is carried out by the employees of the Trade Registry Directorate during the establishment process. The legal books that must be certified are as follows;
·        Daybook: A book in which commercial transactions are recorded item by item in chronological order based on documents.

·        General Ledger: It is the ledger that systematically distributes the transactions recorded in the journal books to the accounts.

·        Accounting Inventory: After the determination and valuation, the results are compared with the accounting records and the accounts are made to express the real situation.

·        Share Ledger: It is the book showing how the company's capital is divided into shares and its details.

·        Management Meeting Minutes Book: It is the book of the company where the transactions and decisions regarding the board of directors meetings are kept.

·        General Assembly Meeting Minutes Book: It is the company book where the transactions and resolutions regarding the general assembly meetings are kept.

9. Requesting the Company Establishment Notice from the Tax Office: After all the documents required for the establishment of the company are obtained and the registration phase is completed at the Trade Registry Directorate, the Directorate informs the relevant tax office and the Social Security Institution that the company has been established. Shortly after this notification, the tax office must be visited to obtain the tax certificate. Thereupon, the tax officer assigned by the tax office arrives at the company headquarters to prepare a determination report. The determination report must be signed by at least two officials of the company. Within 10 days after the registration of the company, the Trade Registry Office announces the establishment of the company in the Trade Registry Gazette.
10. Issuance of Signature Circular: On the date of registration of the company, the authorized signatories of the company must issue a signature circular in the presence of the personnel authorized by the Trade Registry Directorate. The signature circular is a document containing the signature samples of the company representatives that they are authorized to sign.
11. Transferring Certain Documents Related to the Company to the e-TUYS System: This is a database on the activities of foreign investors in Turkey. Three documents are filled in and uploaded to this system online; activity information form for foreign direct investments, capital information form for foreign direct investments and share transfer information form for foreign direct investments.
12. Other requirements according to company type and field of activity: According to the type of company or field of activity, companies have certain legal obligations. For this reason, when opening a company for foreigners, attention should be paid to this and no legal procedure should be left undone. In addition to these, of course, it is important to carry out other legal procedures such as LPPD compliance in order for the commercial functioning and representation to continue properly.

Pursuant to Article 7 of the Law No. 4817 on Work Permits for Foreigners, it is not possible for foreign natural persons to establish a sole proprietorship without a work permit. Pursuant to this article, having a residence permit is not sufficient for foreign real persons to establish a sole proprietorship. For this reason, foreign real persons can establish a sole proprietorship only if they apply for a work permit with a 5-year residence permit.

In order for a foreign real person to obtain a work permit, the foreigner must submit to the Ministry of Labor and Social Security documents and other documents proving that the foreigner has sufficient income for the contribution to the national economy and the activity to be carried out. The foreigner who is found eligible for a work permit is given an "Independent Work Permit Application Certificate" stating that he/she can work independently. After applying to the Ministry within 3 months with this document, the foreigner is granted an independent work permit.

The steps to be followed by foreign real persons when establishing a sole proprietorship in Turkey are generally similar to the steps to be followed by foreign real persons and legal entities when establishing a capital company in Turkey. In this respect, it is possible to summarize the steps that foreign natural persons should follow when establishing a sole proprietorship in Turkey as follows;

Firstly, foreign real persons who wish to establish a sole proprietorship in Turkey must establish a domicile address in Turkey in accordance with the Turkish Commercial Code. At this address, the company must be registered by the Trade Registry Directorate.

As a second step, foreign natural persons must apply to the Trade Registry Directorate in Turkey. The application should include details such as the company's purpose of incorporation, the company's title and the company's form of management. In addition to the application, foreign natural persons are also required to document their residential address in Turkey.

As a third step, foreign natural persons must file a declaration on the company's capital. The Turkish Commercial Code has set minimum capital requirements for sole proprietorships. This declaration must disclose the source of the company's capital and state that the declared capital must be paid up.

As a fourth step, foreign natural persons are required to sign documents provided by the Trade Registry Directorate. These documents include the articles of association, the identity documents of the shareholders and proof of payment of the declared capital.

Finally, foreign natural persons are required to pay the fees required for the company to be registered with the Trade Registry. These fees may vary depending on the company's capital, registration dates and other factors.


Companies of foreign investors operating in Turkey are taxed in Turkey. The tax system in Turkey includes income tax, corporate tax, value added tax (VAT) and some other taxes. In this regard, companies of foreign investors operating in Turkey have to pay corporate tax in Turkey. The corporate tax rate may vary depending on the company's income and the sector in which it operates. 

Companies located in Turkey are also obliged to submit an annual declaration and declare their income.

Furthermore, companies have to pay social security contributions for their employees. Social security contributions, calculated on employees' salaries, are mandatory for all companies operating in Turkey.

Turkey has signed double taxation avoidance agreements (DTAs) with some countries. These agreements are designed to prevent foreign investors from being taxed in their home countries. DTAs are important to resolve double taxation issues related to the taxation of foreign investors in Turkey.


In this article, the company establishment process and the conditions for foreigners to establish a company in Turkey are generally explained. As explained, there are many commercial and legal regulations in Turkish law that provide assurances to foreign investors. However, in order to benefit from these guarantees, it is extremely important to establish the legal infrastructure of the company correctly. By acting in accordance with the Turkish Commercial Code and Turkish tax laws, foreign investors can successfully conduct business in Turkey and benefit from many advantages and rights.

Turkey is a very favorable country for foreigners and investors with its Turkish Law and regulations. However, foreigners should pay attention to certain issues, both commercially and tax-wise, when establishing a company in Turkey. Foreigners who establish their companies in accordance with the Turkish Commercial and Tax Code can benefit from the advantages and rights provided by Turkey.