Establishing a limited liability company in Turkey is the fastest and cheapest route to a Turkish entity: the minimum capital is TRY 50,000, none of it has to be paid before registration, and the company can be wholly owned by non-residents. The trade-offs appear later, in how shares are transferred and in who answers for unpaid public debts.
The limited liability company is the most common corporate form in Turkey by a wide margin. It registers through the same system as the joint stock company and is taxed at the same corporate rate, but it is governed by a different set of rules on capital payment, share transfers and shareholder liability. Those differences decide whether it is the right choice, and they are easier to address before incorporation than after.
Limited Liability Company or Joint Stock Company?
The two forms look similar at the registry and identical on the corporate tax return. They diverge on four points that matter in practice: how much capital has to be funded up front, how shares change hands, how an exit is taxed, and who is liable when the company cannot pay its taxes.
| Criterion | Limited liability company | Joint stock company |
|---|---|---|
| Minimum capital | TRY 50,000 | TRY 250,000 |
| Cash payable before registration | None; the full amount is payable within 24 months | 25% of subscribed cash, blocked at a bank |
| Maximum number of shareholders | 50 | No limit |
| Share transfer formalities | Written agreement certified by a notary, general assembly approval, entry in the share register and registration | Endorsement and delivery of the certificate; no notary deed or registry filing |
| Capital gain on an exit by an individual shareholder | Taxable regardless of holding period | Exempt where certificates have been issued and held for more than two years |
| Shareholder liability for unpaid public debts | Directly liable in proportion to the shareholding | Not liable; liability rests with the board as legal representative |
| Management body | One or more managers; at least one shareholder must hold management and representation authority | Board of directors; members need not be shareholders |
| Ministry representative at general assemblies | Not required | Required for certain meetings |
| Additional payment and ancillary obligations | May be imposed on shareholders by the articles | Not available |
| Bonds and public offering | Not available | Available |
Where a limited liability company cannot pay its taxes, social security premiums or other public debts, the shareholders are directly liable in proportion to their shareholding — the authorities may collect from a shareholder’s personal assets without first exhausting the company. A shareholder in a joint stock company carries no such exposure; only the board members are liable, and only in their capacity as legal representatives.
The exposure also travels with a share transfer. Where a share is transferred, the transferor and the transferee are jointly liable for public debts that arose before the transfer. A buyer who does not check the company’s tax and social security position before signing inherits a liability that no share purchase agreement can undo.
Capital Requirements
The minimum capital of a limited liability company was raised from TRY 10,000 to TRY 50,000 with effect from 1 January 2024. Unlike a joint stock company, there is no requirement to deposit and block any part of the cash capital before registration: the requirement to pay 25% up front expressly does not apply to limited liability companies. The full amount subscribed in cash must be paid within 24 months of registration unless the articles provide a shorter period.
Guides frequently state that 25% of the capital must be blocked at a bank before a limited liability company is registered. That rule belongs to joint stock companies. Applying it to a limited liability company means tying up funds that the law does not require to be tied up. For capital increases the position is different: the previously subscribed capital must be fully paid before an increase can be registered, and practice on the newly increased amount varies between registry directorates, so it should be confirmed before filing.
Companies incorporated before 2024 with capital below TRY 50,000 must increase it by 31 December 2026, failing which they are deemed dissolved by operation of law. The general assembly resolution for this increase requires no quorum and is taken by a majority of the votes present. The Ministry of Trade may extend the period twice, by one year each time, but the deadline currently in force is 31 December 2026. A large number of companies incorporated with the old TRY 10,000 minimum are affected and many have not yet acted.
Contributions in kind
Contributions in kind 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. Service undertakings, personal labour and commercial goodwill cannot be contributed as capital. Where any part of the capital is contributed in kind, it must be transferred to the company in full at incorporation; the 24-month period applies only to cash.
Who Can Establish a Limited Liability Company?
A limited liability company may be established by a single shareholder and may have no more than fifty. Shareholders may be individuals or legal entities, resident or non-resident. Under the Foreign Direct Investment Law foreign investors receive the same treatment as domestic investors, so the company may be wholly foreign-owned with no requirement for a Turkish shareholder or a local partner.
Management is exercised by one or more managers, who may be shareholders or third parties, and a legal entity may serve as manager provided a natural person is designated to act on its behalf. One structural rule catches out investors who intend to appoint only outside managers: at least one shareholder must hold management and representation authority. A company whose managers are all non-shareholders does not satisfy the Commercial Code.
Establishment Process Step by Step
- Reserve the trade name and draft the articlesThe articles of association are prepared in the central registry system, which generates a request number. The trade name, activity subject, capital, headquarters address and activity code are fixed at this point, and changing any of them later requires an amendment to the articles.
- Obtain tax identification numbersForeign shareholders and non-resident managers need a Turkish tax identification number before the registry step. For a foreign corporate shareholder this is obtained on the basis of the legalised registry documents.
- Sign the articles before the registry directorateSince 2018 the founders’ signatures are given before authorised personnel at the trade registry directorate rather than at a notary. Where a shareholder signs through a representative, a notarised power of attorney expressly authorising the incorporation is required.
- Pay the Competition Authority fee0.04% of the capital, paid at the chamber of commerce cashier’s office. No capital deposit is required at this stage.
- File with the trade registryAn appointment is booked with the trade registry directorate 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 opening certification of the books is carried out by the trade registry directorate at incorporation, not by a notary. The share register is among them and is the document that evidences ownership.
- Complete tax and social security registrationsThe tax office opening inspection, electronic invoicing and ledger enrolment where thresholds are met, and social security workplace registration before the first employee starts.
- Fund the capital within 24 monthsThe subscribed cash must reach the company within 24 months of registration. Set the date in the compliance calendar at incorporation rather than discovering it during an audit.
Documents Required for Company Formation
| Document | Requirements and notes |
|---|---|
| Petition | Signed by all managers, 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 in the central registry system and signed by the shareholders or their proxies before the registry directorate; a notarised power of attorney is required for a proxy |
| Signature declarations | Obtained electronically through integration with the population registry database |
| Acceptance statements of non-shareholder managers | Stating residence address, nationality and identity number, or tax identification number for non-residents |
| Resolution of a legal entity manager | Notarised resolution designating the individual who will act on behalf of the entity |
| 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 |
| 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 manager
- 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, with a notarised Turkish translation
- A 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. Either way it then needs a sworn Turkish translation and notarisation in Turkey, and registry offices expect registry extracts to be recent. Settle the trade name, activity subject, capital figure and management structure before the documents are legalised: an amendment afterwards means running the whole chain again.
Share Transfers and What They Trigger
Share transfers are the point at which the limited liability company differs most sharply from the joint stock company, and where the cost of the form becomes visible.
A transfer requires a written agreement certified by a notary, approval by the general assembly unless the articles provide otherwise, entry in the share register, and registration and announcement at the trade registry. The withdrawing shareholder must also sign the resolution, and where that shareholder is also a manager, the resolution must state whether the management role continues. None of this is required for a joint stock company, where registered shares pass by endorsement and delivery.
Two consequences follow that are easy to overlook:
- Tax. A gain realised by an individual shareholder on the sale of a limited liability company share is taxable however long the share has been held. There is no equivalent of the exemption available on joint stock company shares held for more than two years where certificates have been issued.
- Public debts. The transferor and the transferee are jointly liable for public debts of the company arising before the transfer. Tax and social security clearance should be verified before signing, not afterwards.
Transfers by inheritance follow a separate route, requiring a certificate of inheritance issued by a court or a notarised declaration of inheritance, a resolution allocating the inherited shares, and the updated share register.
Governance and General Assembly Requirements
The ordinary general assembly must be held within three months of the end of the accounting period. Where not all shareholders attend, the meeting must be convened by announcement in the Trade Registry Gazette and by registered letter to the shareholders’ registered addresses, stating the date, time, place and agenda, at least two weeks before the meeting unless the articles provide a longer period. Where all shareholders agree, a resolution may instead be adopted in writing without a meeting, and in that case no participant list is required.
Unlike a joint stock company, a limited liability company does not require a ministry representative to attend its general assemblies. The articles may impose additional payment obligations and ancillary obligations on shareholders — a mechanism unavailable in a joint stock company and worth considering where the shareholders want a funding commitment that does not run through capital increases.
Post-Incorporation Registry Procedures
Each of the transactions below requires a petition signed by the authorised representatives listing the attachments, alongside the documents shown. Where a shareholders’ written resolution is filed instead of a general assembly resolution, no participant list is required.
| Transaction | Principal documents |
|---|---|
| Amendment of the articles | Notarised general assembly resolution containing the revised text of the article and, where the amendment extends the company’s duration, a report from a sworn or certified public accountant confirming that operations have continued and equity has been maintained |
| Capital increase | Notarised resolution, an accountant’s report confirming that existing capital commitments have been fully paid, bank evidence for cash increases, court-appointed expert reports for contributions in kind, and the Competition Authority fee of 0.04% of the increase |
| Capital reduction | Report stating the reasons, purpose and method, notarised resolution containing the amended article, three announcements to creditors at seven-day intervals in the Trade Registry Gazette, and an accountant’s or auditor’s report confirming the remaining assets cover the liabilities |
| Simultaneous reduction and increase | The above, plus a bank letter confirming the increased capital has been paid, the amended articles, and where an excess remains, a resolution stating that it will be paid within 24 months |
| Address change | Notarised resolution confirming the new address, checked for consistency with the central registry record before filing |
| Branch opening | Petition stating the branch title, address and activity code, chamber registration declaration signed by the branch representative with a photograph, notarised resolution approving the branch, and the representative’s acceptance statement |
| Branch closure or transfer | Notarised resolution and, for a transfer, the updated address and registry details |
| Share transfer | Notarised share transfer agreement, notarised resolution specifying the new ownership structure and signed by the withdrawing shareholder, and the updated pages of the share register |
| Transfer by inheritance | Certificate of inheritance from a court or notarised declaration of inheritance, resolution allocating the shares, updated share register, and the acceptance statement of any newly appointed manager |
| Change of a shareholder’s or manager’s name | Notarised resolution and a certified copy of the population registry record or of the court decision |
| Manager appointment | Notarised resolution, the manager’s acceptance statement, and for a legal entity manager the resolution designating its representative; the scope of authority must be defined in the resolution |
| Appointment of a liquidator | Notarised resolution, the liquidator’s acceptance statement where appointed from outside the management or shareholders, and a notarised signature declaration; the call to creditors is generated and published electronically and the announcement fee is collected during registration |
| Reversal of liquidation | Notarised resolution and the liquidator’s report confirming that assets have not yet been distributed to the shareholders |
| Closure of liquidation | Notarised resolution approving the final liquidation balance sheet, which may only be held three months after notification to creditors, and the balance sheet signed by the liquidator; registered branches must be deleted before or at the same time as the parent company |
Ongoing Obligations After Incorporation
- Ordinary general assembly within three months of period end
- Annual certification of the statutory books
- Corporate tax return and provisional tax filings
- Value added tax and withholding tax returns
- Ultimate beneficial owner notification
- Share register 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 for 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.
How Long Does It Take?
Where the shareholders are resident in Turkey and the documents are ready, registration can be completed on the day the file is submitted. As with any Turkish entity, the variable 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.
Common Mistakes Made by Investors
- Blocking 25% of the capital unnecessarily. That requirement applies to joint stock companies. A limited liability company can be registered without funding any part of the capital.
- Appointing only outside managers. At least one shareholder must hold management and representation authority, and the file will be rejected without it.
- Buying shares without a tax and social security clearance. The transferor and the transferee are jointly liable for public debts arising before the transfer.
- Choosing the form for the low capital and planning an exit. A gain on selling limited liability company shares is taxable whatever the holding period.
- Overlooking the 31 December 2026 capital deadline. Companies still at the old TRY 10,000 minimum are deemed dissolved by operation of law if they do not act.
- Forgetting the 24-month funding date. The capital is a real obligation with a fixed deadline, not a figure on paper.
- Leaving the share register unkept. Unrecorded transfers are difficult to evidence and the problem surfaces during due diligence.
- Exceeding fifty shareholders. The company must then convert to a joint stock company.
Frequently Asked Questions
What is the minimum capital for a limited liability company in Turkey?
Does 25% of the capital have to be blocked at a bank before registration?
Can foreign investors own a limited liability company in Turkey outright?
Are shareholders liable for the company’s tax debts?
How are shares transferred in a limited liability company?
What happens if the capital is still below TRY 50,000 after 2026?
How many shareholders can a limited liability company have?
Can a manager be a legal entity or a non-resident?
As the Ozbek CPA team, we handle limited liability company formation in Turkey end to end — choosing between the corporate forms, drafting the articles of association, coordinating the legalisation of documents abroad, the registry procedures, book certification and tax registrations, and the accounting, payroll and share transfer work that follows. Contact us.
