Are you choosing between a Joint Stock Company (JSC) and a Limited Liability Company (LLC) in Turkey? This 2025 updated guide explains key differences in capital requirements, taxation, liability, and public offering potential. Find out which business structure is best for your company when you set up a company in Turkey.
Introduction
For entrepreneurs looking to establish a company in Turkey, the two most common business structures are Joint Stock Companies (JSCs) and Limited Liability Companies (LLCs). Both are considered capital companies under Turkish Commercial Code (TCC) No. 6102, meaning that shareholders have limited liability for the company’s debts.
As of 2025, new capital requirements, governance obligations, and tax regulations have made the decision between a JSC and an LLC even more critical. This article provides a detailed comparison of JSCs and LLCs, outlining their advantages, disadvantages, and key differences to help entrepreneurs choose the best structure for their business. If you are planning the incorporation of a company in Turkey, this guide will help you navigate the process efficiently.
1. Legal Definition and Shareholder Structure
What is a Joint Stock Company (JSC)?
According to Article 329 of the TCC:
“A JSC is a company whose capital is definite and divided into shares, and which is liable for its debts only with its assets.”
Key Features:
- Minimum Shareholders: 1
- Maximum Shareholders: Unlimited
- Public Offering Potential: If a JSC reaches 500 or more shareholders, it is considered a public company and must comply with Capital Markets Board (CMB) regulations.
- Share Transfer: Freely transferable without requiring shareholder approval.
What is a Limited Liability Company (LLC)?
Defined under Article 573 of the TCC:
“An LLC is a company established by one or more real or legal persons under a trade name, with a fixed capital.”
Key Features:
- Minimum Shareholders: 1
- Maximum Shareholders: 50
- Public Offering: Not allowed (LLCs cannot be listed on stock exchanges).
- Share Transfer: Restricted, requiring notarization and approval from the General Assembly.
2. Capital Requirements (2025 Update)
Effective January 1, 2024, Presidential Decision No. 7887 introduced higher capital requirements for both JSCs and LLCs:
- Joint Stock Company (JSC): 250,000 TRY (previously 50,000 TRY)
- Limited Liability Company (LLC): 50,000 TRY (previously 10,000 TRY)
This update significantly impacts the incorporation of a company in Turkey, making it essential for entrepreneurs to plan their capital accordingly.
3. Liability for Public Debts
Joint Stock Company (JSC) Liability
- Shareholders are NOT personally liable for company debts.
- However, board members (legal representatives) are personally responsible if public debts (e.g., taxes, social security premiums) cannot be collected from the company.
Limited Liability Company (LLC) Liability
- Shareholders ARE liable for unpaid public debts in proportion to their shares.
- If shareholders also serve as managers, they are fully responsible for the company’s public debts.
4. Corporate Governance and Compliance
- JSCs require a Board of Directors and regular shareholder meetings, making them more complex in terms of corporate governance.
- LLCs have a simpler structure with fewer compliance obligations, making them easier to manage for small businesses.
5. Share Transfer and Ownership Flexibility
- JSCs allow easy share transfers, making them a better option for investors seeking flexibility.
- LLCs require notarization and General Assembly approval for share transfers, limiting ownership changes.
6. Taxation and Financial Benefits
- JSCs face higher taxation due to dividend withholding tax, making profit distribution more costly.
- LLCs offer more flexible profit distribution, often resulting in lower taxation.
7. Public Offering and Investment Potential
- Only JSCs can issue shares and go public on stock exchanges.
- LLCs must convert to a JSC before they can go public.
Conclusion: Should You Choose a JSC or LLC?
- JSCs are ideal for large companies planning to go public, attracting investors, or requiring easy share transfers.
- LLCs are better suited for small and medium-sized businesses seeking simpler management, fewer compliance costs, and controlled ownership.
Entrepreneurs should evaluate capital requirements, taxation, and future investment plans to determine the ideal business structure when they set up a company in Turkey in 2025 and beyond. The incorporation of a company in Turkey requires careful planning, and understanding these key differences can help make the best decision.