ESTABLISHING A BUSINESS in TURKEY
Turkey’s FDI Law is based on the principle of equal treatment, allowing international investors to have the same rights and liabilities as local investors.
The conditions for setting up a business and share transfer are the same as those applied to local investors. International investors may establish any form of company set out in the Turkish Commercial Code (TCC), which offers a corporate governance approach that meets international standards, fosters private equity and public offering activities, creates transparency in managing operations and aligns the Turkish business environment with EU legislation as well as with the EU accession process.
Turkey has introduced reforms with a view to making it easier to do business in order to enhance the investment environment, eliminating red tape in setting up a business and minimizing costs and procedures. To this end, establishing a company is now only carried out at Trade Registry Offices located in Chambers of Commerce and designed to be a ‘one-stop shop’.
TYPES OF COMPANY IN TURKEY
Holding Company in TURKEY
Holding companies generally participate in other companies and hold their outstanding shares. This means that holding companies usually do not conduct business by producing goods or services. Larger companies or multi-sector organizations set up holding companies to allow the free flow of capital and ownership transfer.
Joint Stock Company (JSC) in TURKEY
A minimum of one shareholder is required to set up a joint stock company in Turkey. Individuals or companies can incorporate a joint stock company and each shareholder may be a foreigner. A minimum capital of 50,000 TL is required to open a joint stock company in Turkey, that amount indicates the total amount of capital. Joint stock companies can issue stock certification as opposed to limited liability companies. Investors aiming to set up a company in Turkey should consider that important rule. In joint stock companies, shareholders liability is restricted with their share capital. Joint stock companies must have at least three units: general company meetings, a Board of Directors, and a supervisory board.
Limited Liability Company (LLC) in TURKEY
In order to set up a Limited Liability Company (LLC) in Turkey only one shareholder and a minimum capital of 10,000 TL are required. Shareholders who wish to establish a Limited Liability Company can be an individual or legal entity. All or some of the founders of an LLC can be foreigner. Setting up a Limited Liability Company is ideal due to its flexible structure. To incorporate Limited Liability Company is easier than setting up a joint stock company in Turkey. The liability of shareholders is restricted with their share capital. Unlike joint stock compaines, an LLC cannot issue stock certificates, LLCs have at least two units; the company’ s general meeting and the managing directors.
Branches in TURKEY
The parent company may close a branch at any time through the adoption of a resolution by its management body (i.e. the board of directors for joint stock companies). Such resolution shall be registered with the relevant trade registry and announced in the Turkish Trade Registry Gazette.
Free Trade Zone Company in TURKEY
Our firm offers company formation services in a free trade zone, Turkey. Free trade zones have tax plus other advantages, that attract investors, OzbekCPA provides efficient solutions for foreign entrepreneurs who plan to start a business in a free trade zone.
Liaison Offices in TURKEY
The Ministry of Industry and Technology may revoke activity permits of liaison oices due to conducting commercial activities or not submitting the annual form on their activities within the prescribed time period (please see 3.4 (Liaison Oices) for further information). The parent company may also close a liaison oice upon notiication to the Ministry of Industry and Technology.
Non-Profit Organization (Foundation,Associations,NGOs) in TURKEY
Foreign enterprisers and companies are allowed to create various types of businesses in Turkey. From structures which can be registered in other countries to business forms which are particularly found in Turkey, the local legislation provides for an environment which favors foreign investments. However, the Turkish legal framework also enables companies and individuals to create organizations for non-profit purposes. The law governing the establishment of non-profit organizations (NGOs) is the Foundations Law which was enabled in 2008.
The Foundations Law offers the definition and the requirements for establishing a foundation or an association in Turkey. Our lawyers in Turkey can offer information on the Foundations Act.
Cooperative Company in TURKEY
Although some financial thresholds (i.e., minimum capital) and organs differ from each other, the procedures to be followed for establishing a JSC or an LLC are the same.