Turkey is a vibrant and prosperous country with a vibrant economy. It is one of the 20 largest economies in the world. Additionally, starting a business in Turkey attracts more foreigners every two years thanks to the young workforce, strong domestic demand, and access to international markets. In this article, we will share important information on how to start a business in Turkey and the steps required to accomplish this task.

Turkey offers a very favorable environment for foreign investors. Turkey’s proximity and bilateral trade relations with EU countries are an important advantage, especially for the Gulf States and other Arabic-speaking countries. In addition, Turkey’s accession to the customs union with the EU gives it duty-free access to one of the largest and most prosperous markets in the world. Considering the good exchange rates, the relatively low labor cost and the well-educated local population, any investment in Turkey with the possibility of exporting to the EU would produce very profitable results.

Please note that the same right to start a company and transfer shares is enshrined in the Turkish Commercial Code. Whatever the origin of the investor, everyone will be treated equally before the Turkish authorities.

It is also a very quick process to start a new business in Turkey that the government is really proud of. In fact, according to OECD data, it only takes 7 days to start a business in Turkey. Turkey was also ranked 33rd in the world for ease of doing business.

So before we move on to the next steps, let’s get to know the types of businesses operating in Turkey. Depending on your field of business, this knowledge will help you choose the type of business to start.

Company Types according to the Turkish Commercial Code

There are five types of companies set out in the Turkish Commercial Code. These include companies and in particular:

– Joint stock company (Anonim Şirketi),

– Limited liability company (tangential),

– Cooperative (cooperative)

and two of them are non-corporate, namely:

– Collective (Kollektif Şirket)

– Commandite Company (Komandit Şirket).

As in any other country, joint-stock companies and limited liability companies are the most common forms of partnership in Turkey. To understand this breakdown in numbers, 82% of the companies in Turkey are public companies, 13% are public companies and 4% of them are cooperatives.

All companies in Turkey are subject to corporation tax, which is levied on 20% of company profits.

Steps to open a business in Turkey

Regardless of the nationality of the founder, the operation to establish a company in Turkey is free.

1- Drafting Memorandum

At this point, the founders or their representatives should go to https://mersis.gtb.gov.tr/, where they should log in and start the process. At the time of writing the memorandum, foreigners must present their passport numbers. The foreigner must first register with the tax office and acquire a tax code. You also need to register with the Commercial Registry (Ticaret Sicil Müdürlüğü).

Since the plea is sent to the notary, no paper presentation is required.

2- Official signature circulars of the company

A person who is considered an official representative of the company must present his signed declaration and have it certified by the competent authority. Any business registry in Turkey can carry out this certification.

3- Competition Authority Percentage

0.04% of the capital must be paid into the account of the competition authority (Rekabet Kurumu) in a bank. Also, in the case of a joint-stock company, 25% of the capital must be deposited into the company’s account before registration.

4- Registration in the commercial register

The founder must submit an application to the commercial register with the other documents necessary to complete the registration process. Corporations, limited liability companies, and cooperatives must also register their trade books.

Another form of business worth mentioning is sole proprietorship which is subject to income tax. Some of the benefits of this type of business are less capital and different requirements. Like corporations, such companies may also be under the management (or owner) of foreigners. They can be created simply by registering in any commercial register. It is considered a better method for consulting and small businesses. Limited partnerships and general partnerships can also be established as sole proprietorships.

Opening a bank account in Turkey is also very easy. Identity and address documents are required for foreigners residing in Turkey, as well as any tax code, passport, official document with address for foreigners not residing in Turkey. It is also possible to open an account online without going through an agency. İşbankası, Akbank, Garanti BBVA, Yapı Kredi are leading banks with branches throughout the country.

Although all government officials or agencies in Turkey are supposed to speak English, it would be very helpful to have a certain level of Turkish to conduct relevant trade opening operations. This would help to understand the process and ensure effective communication between partners. It would also be welcomed by Turkish people having a foreigner speaking their language.

Citizenship through Investment

One important benefit of setting up a business in Turkey is it would enable foreigners to obtain Turkish citizenship. Here are some ways to invest and become a Turkish citizen::

–          Employing at least 50 people

–          Making a fixed capital investment of 500,000 USD

–          Depositing into bank account the amount of 500,000 USD

–          Ventura capital investment fund of 500,000 USD

 

Incentives

The Turkish government is taking an active stance and providing important incentives to attract foreign investment into the country. Some of these incentives are: duty exemption, VAT exemption, corporate tax reduction, help with social security contributions, land transfer, interest subsidies, etc. The illustration shows a categorized list of incentives.

https://www.invest.gov.tr/en/investmentguide/pages/incentives-guide.aspx

Ultimately, starting a business in Turkey is really a simple and straightforward process. It also has its advantages. Although most foreigners focus on investing in the service sector, any sector in Turkey would be beneficial to any smart entrepreneur regardless of nationality.

 

Of course, one of the best steps you can take to facilitate any investment you will make in Turkey will be to learn Turkish. You can use the links below to make a professional choice in this regard.

Turkish Course located Istanbul:   www.turkeystudycenter.com

Online Turkish Course: www.turacoon.com

Google Maps:  https://goo.gl/YUB6h6