Establishing a joint stock company in Turkey is the route most foreign investors take when the plan involves outside shareholders, share transfers or an eventual exit. The minimum capital is TRY 250,000, at least a quarter of it must be in the bank before registration, and the company can be owned entirely by non-residents.
The joint stock company and the limited liability company are the two forms used in practice. They register through the same system and are taxed at the same corporate rate, but they differ sharply on share transfers, shareholder liability for public debts and the tax treatment of an exit. Choosing between them is a decision that is expensive to reverse, so it belongs at the start of the project rather than at the notary.
Joint Stock Company or Limited Liability Company?
Most of the practical difference between the two forms appears after incorporation, not during it. The comparison below sets out the points that actually change the outcome for a shareholder.
| Criterion | Joint stock company | Limited liability company |
|---|---|---|
| Minimum capital | TRY 250,000 | TRY 50,000 |
| Cash payable before registration | 25% of subscribed cash | None; payable within 24 months |
| Maximum number of shareholders | No limit | 50 |
| Share transfer formalities | Transfer of registered shares by endorsement and delivery; no notary deed or registry filing required | Notarised transfer agreement, general assembly approval and registration |
| Capital gain on an exit by an individual shareholder | Exempt where share certificates have been issued and held for more than two years | Taxable regardless of holding period |
| Shareholder liability for unpaid public debts | None; liability rests with the board as legal representative | Shareholders are directly liable in proportion to their shareholding |
| Issuing bonds and debt instruments | Available | Not available |
| Public offering | Available | Not available |
| Management body | Board of directors, at least one member | Board of managers, at least one manager who must be a shareholder or appointed as such |
| Contracted lawyer requirement | Applies above the capital threshold in the Attorneyship Law | Not applicable |
Where an individual shareholder sells shares in a joint stock company that has issued printed share certificates and has held them for more than two years, the gain falls outside the scope of capital gains taxation. The same sale of a limited liability company participation is taxable whatever the holding period. For a shareholder who expects to sell within the next five to ten years, this single difference generally outweighs the higher capital requirement.
The certificates have to actually exist. Issuing them is a board resolution and a printing job, but a company that never issued them cannot rely on the exemption retrospectively.
Capital Requirements for a Joint Stock Company in Turkey
The minimum capital of a joint stock company was raised from TRY 50,000 to TRY 250,000 with effect from 1 January 2024. For non-public companies adopting the registered capital system, which allows the board to increase capital up to an authorised ceiling without a general assembly resolution each time, the initial capital must be at least TRY 500,000.
Companies incorporated before 2024 with capital below the new minimum must increase it to TRY 250,000 by 31 December 2026, failing which they are deemed dissolved by operation of law. Non-public companies in the registered capital system must reach TRY 500,000 by the same date or they are treated as having left that system. The general assembly resolution for this increase requires no quorum and is taken by a majority of the votes present, and no privileged voting rights may be exercised against it. The Ministry of Trade may extend the period twice, by one year each time, but the deadline currently in force is 31 December 2026.
Cash and in-kind contributions
At least 25% of cash subscriptions must be deposited into a blocked bank account before registration, and the bank letter evidencing the blocked amount is filed with the trade registry. The remaining 75% must be paid within 24 months of registration. Contributions in kind follow a different route: they require a valuation report prepared by a court-appointed expert, a court decision, and evidence that the assets carry no lien, attachment or similar encumbrance. Rights that are not capable of valuation, service undertakings and personal labour cannot be contributed as capital.
Who Can Establish a Joint Stock Company in Turkey?
A joint stock company may be established by a single shareholder, who may be an individual or a legal entity, resident or non-resident. Under the Foreign Direct Investment Law, foreign investors are subject to the same treatment as domestic investors, so a company may be wholly owned by non-residents without any requirement for a Turkish shareholder, a local director or a local partner.
The board of directors requires at least one member. A board member need not be a shareholder, need not be resident in Turkey, and may be a legal entity — in which case a natural person is designated to act on its behalf and is registered as such. At least one board member must hold unlimited authority to represent the company on all matters.
Certain activities require the approval of the Ministry of Trade both at incorporation and for subsequent amendments to the articles of association. These include banks, financial leasing and factoring companies, insurance companies, holding companies, companies operating foreign exchange bureaux, general warehousing, licensed agricultural warehousing, asset management companies, founders and operators of free zones, and companies subject to capital markets legislation.
Establishment Process Step by Step
- Reserve the trade name and prepare the articles of associationThe articles are drafted in the central registry system, which generates a request number. The trade name, the activity subject, the capital, the headquarters address and the activity code are fixed at this point. Changing them later means an amendment to the articles of association, so the activity subject should be drafted broadly enough to cover foreseeable business lines.
- Obtain a potential tax identification numberForeign shareholders and non-resident board members need a tax identification number before the bank and registry steps. For foreign corporate shareholders this is obtained on the basis of the legalised registry documents.
- Sign the articles of associationSigned by the shareholders before the trade registry directorate or a notary. Where a shareholder signs through a representative, a notarised power of attorney expressly authorising the incorporation is required.
- Deposit the capital and pay the Competition Authority feeAt least 25% of cash subscriptions is deposited into a blocked account and the bank letter is obtained. The Competition Authority fee of 0.04% of the capital is paid at the chamber of commerce cashier’s office. Neither payment can be skipped or deferred.
- File with the trade registryAn appointment is booked with the trade registry directorate of the relevant chamber and the file is submitted. Registration and announcement in the Trade Registry Gazette follow, and the company acquires legal personality on registration.
- Certify the statutory booksThe journal, ledger, inventory book, share ledger, board resolution book and general assembly minutes book are certified at incorporation. The share ledger matters more than it appears: without it, share transfers cannot be evidenced.
- Complete the tax and social security registrationsThe tax office opening inspection, electronic invoicing and electronic ledger enrolment where thresholds are met, and the social security workplace registration before the first employee starts.
- Issue share certificatesA board resolution and printed certificates. Not a registry requirement, but the condition for the capital gains exemption on a future sale, and the point most often left undone.
Documents Required for Company Formation
| Document | Requirements and notes |
|---|---|
| Petition | Signed by the authorised representatives, stating the tax office, activity subject, capital, headquarters address, commencement date and activity code, with a declaration of accuracy and legal responsibility |
| Chamber registration declaration | Signed by the authorised persons, including shareholders’ photographs |
| Articles of association | Prepared through the central registry system and signed by the shareholders; a notarised power of attorney is required where a proxy signs |
| Signature declarations | For holders of the new identity card these may be obtained electronically from the population registry |
| Acceptance declarations of non-shareholder directors | Stating residence address, nationality and identity number, or tax identification number for non-residents |
| Resolution of a legal entity board member | Notarised resolution designating the individual who will act on behalf of the entity |
| Bank letter for the blocked capital | Evidencing that at least 25% of cash subscriptions has been deposited |
| Competition Authority fee receipt | 0.04% of the capital, paid at the chamber cashier’s office |
| Valuation report for contributions in kind | Court-appointed expert report, court decision, and evidence that the assets are free of encumbrances |
| Establishment notification form | Required where a shareholder is a foreign national or a Turkish citizen resident abroad |
| Contracts concluded with founders | All agreements relating to the incorporation, including transfers of assets or of a business |
| Guardianship decision | Where a minor is a shareholder, together with articles signed by the guardian |
Additional documents for foreign shareholders
- Notarised Turkish translation of the passport of each foreign individual shareholder and non-resident board member
- Tax identification number or foreign identity number for each of them
- Notarised copy of the residence permit for those residing in Turkey
- For a foreign corporate shareholder, a current registry extract or certificate of incumbency, legalised by apostille or certified by a Turkish consulate, together with a notarised Turkish translation
- A notarised and legalised resolution of the foreign shareholder approving the incorporation and appointing its representative
Whether a document is legalised by apostille or by consular certification depends on the country of origin: apostille applies between parties to the Hague Convention, and consular certification is required for the rest. Either way the document then needs a sworn Turkish translation and notarisation in Turkey. For a foreign corporate shareholder this chain, not the registry, is normally the longest element of the timetable, and registry offices expect registry extracts to be recent. The practical rule is to settle the trade name, the activity subject, the capital figure and the board composition before the documents are legalised, because an amendment afterwards means running the whole chain again.
Governance and General Assembly Requirements
The ordinary general assembly must be held within three months of the end of the accounting period. A ministry representative must attend certain meetings, including those of companies whose incorporation is subject to ministerial approval and meetings whose agenda includes a capital increase or reduction, a change of type, a merger, a division, transition to the registered capital system, a change of the activity subject, or electronic participation.
Board practice was simplified in 2024: the chair and deputy chair no longer have to be elected annually, and the board may appoint them for the duration of its own term.
Where a company established with several shareholders becomes a single-shareholder company, the change must be notified to the board within seven days, and the board must register it within a further seven days, together with the sole shareholder’s name, identity number, address and nationality. The same applies to a change of sole shareholder and to the transition back to multiple shareholders.
Post-Incorporation Registry Procedures
The transactions below are handled at the trade registry directorate after incorporation. Each requires a petition signed by the authorised representatives listing the attachments, alongside the documents shown.
| Transaction | Principal documents |
|---|---|
| Change of headquarters address | Notarised general assembly resolution containing the amended article, chamber registration declaration, ministerial approval and amendment text where required, ministry representative appointment letter where required, and a document from the previous registry office where the headquarters moves between registry districts |
| Branch opening | Chamber registration declaration signed by the branch representative with a photograph, notarised resolution approving the branch, and the representative’s acceptance statement |
| Branch closure | Notarised resolution approving the closure and the supporting participant lists |
| Amendment of the articles of association | General assembly documents, ministerial approval where required, the amendment draft, and the approval of a special assembly of privileged shareholders where their rights are affected |
| Capital increase | Notarised general assembly resolution, a certified public accountant’s report confirming that previous capital has been paid, bank evidence of payment, court-appointed expert reports for contributions in kind, and the Competition Authority fee of 0.04% of the increase |
| Capital reduction | Reduction report stating the reason, method and purpose, notarised resolution, three announcements to creditors in the Trade Registry Gazette, an auditor’s or certified public accountant’s report confirming that the assets cover the liabilities, and evidence that creditors have been paid or secured |
| Simultaneous reduction and increase | The above, plus a bank letter confirming the new capital has been paid in full, the amended articles and the government consent letter where required |
| Board resignation and appointment | Notarised board resolution, acceptance statement of the new member with address, nationality and identity or tax number, and for a legal entity member the documentation designating its representative |
| Representation authority | Notarised board resolution appointing persons with representation authority, and current signature declarations; at least one board member must hold unlimited authority on all matters |
| Single-shareholder status | Notarised board resolution stating the change and the sole shareholder’s details, notarised passport translation or legalised registry extract for a foreign shareholder, and the updated pages of the share ledger |
| Commencement of liquidation | General assembly resolution appointing the liquidator, participant list, notarised power of attorney for proxies, and the liquidator’s acceptance and signature declaration |
| Completion of liquidation | General assembly resolution approving the final accounts, participant list, and confirmation that accounts have been settled |
| Reversal of liquidation | Resolution cancelling the liquidation, available only where distribution of assets has not begun, and the liquidator’s report confirming the assets remain intact |
Ongoing Obligations After Incorporation
- Ordinary general assembly within three months of period end
- Certification of the statutory books for each year
- Corporate tax return and provisional tax filings
- Value added tax and withholding tax returns
- Ultimate beneficial owner notification
- Share ledger kept current on every transfer
- Electronic invoicing and ledger where thresholds are met
- Independent audit where the thresholds are exceeded
The independent audit thresholds were raised with effect from financial years beginning on or after 1 January 2026. A company outside the specially listed sectors becomes subject to audit where it exceeds at least two of the following in two consecutive financial years: total assets of TRY 500 million, annual net sales of TRY 1 billion, or 150 employees. The previous thresholds were TRY 300 million and TRY 600 million respectively.
Under the Attorneyship Law, joint stock companies whose capital reaches the threshold defined by reference to the minimum capital in the Turkish Commercial Code must retain a contracted lawyer, and failure to do so carries a monthly administrative fine. Because the statutory minimum capital itself was raised in 2024, the population of companies caught by this rule has changed, and the position should be confirmed with the local bar association for the specific capital figure adopted. It is a routine obligation, but it is frequently discovered only when the fine is assessed.
How Long Does It Take to Establish a Joint Stock Company?
Where the shareholders are resident in Turkey and all documents are ready, registration can be completed on the day the file is submitted. The variable is not the registry; it is document preparation abroad and, afterwards, the bank.
A company with only resident shareholders is commonly registered within a week and fully operational within three. Where a foreign corporate shareholder is involved, four to eight weeks from first instruction is the realistic planning assumption, with legalisation accounting for most of it.
Common Mistakes Made by Investors
- Choosing the form on capital alone. The lower capital of a limited liability company is often outweighed by the tax treatment of an exit and by shareholder liability for public debts.
- Never issuing share certificates. Without them the capital gains exemption on a future sale is unavailable, and it cannot be created retrospectively.
- Drafting the activity subject too narrowly. Every new business line then requires an amendment to the articles of association, a general assembly and a registry filing.
- Legalising documents before the details are settled. A change to the trade name, capital or board after legalisation means repeating the entire chain abroad.
- Overlooking the 31 December 2026 capital deadline. Companies below the minimum are deemed dissolved by operation of law, not merely fined.
- Forgetting the 24-month balance. The unpaid 75% of cash capital is a real obligation with a fixed date, not a formality.
- Leaving the share ledger unkept. Transfers that are not recorded are difficult to evidence, and the problem surfaces during due diligence, at the worst possible moment.
Frequently Asked Questions
What is the minimum capital for a joint stock company in Turkey?
Can foreign investors establish a joint stock company in Turkey without a local partner?
How long does it take to establish a joint stock company in Turkey?
What happens if a company’s capital is below TRY 250,000 after 2026?
Why do investors choose a joint stock company over a limited liability company?
Can a joint stock company have a single shareholder?
Is an independent audit required?
Do board members have to be resident in Turkey?
As the Ozbek CPA team, we handle joint stock company formation in Turkey end to end — entity selection, drafting the articles of association, coordinating the legalisation of documents abroad, the capital and registry procedures, book certification and tax registrations, and the accounting, payroll and corporate governance work that follows. Contact us.
