Turkey is an attractive destination for foreign entrepreneurs due to its strategic location, growing economy, and business-friendly policies. Whether you’re looking to open a small startup, a branch of an international company, or invest in key sectors, Turkey offers a range of opportunities for foreigners to establish and grow their businesses. In this guide, we will walk you through the legal requirements, business structures, registration process, and key considerations for starting a business open company in turkey as a foreigner.
Why Start a Business in Turkey?
Turkey’s economy has been growing steadily, making it a prime location for business investments. Here are some key reasons why foreigners choose to start businesses in Turkey:
- Strategic Location: Turkey serves as a bridge between Europe, Asia, and the Middle East, making it an ideal hub for international trade.
- Business-Friendly Environment: The Turkish government has implemented policies to encourage foreign investment, including tax incentives and simplified business registration.
- Skilled Workforce: Turkey has a large, young, and skilled labor force, making it easier to find qualified employees.
- Growing Economy: Turkey has a diversified economy, with strong industries in manufacturing, tourism, real estate, and technology.
- Residency and Citizenship Benefits: Starting a business in Turkey may also help foreigners obtain residency or even Turkish citizenship through investment programs.
Step-by-Step Guide to Starting a Business in Turkey as a Foreigner
1. Choose the Right Business Structure
Before starting a business in Turkey, you must decide on the legal structure of your company. The most common business structures for foreign entrepreneurs include:
- Limited Liability Company (LLC – Limited Şirketi, Ltd. Şti.): The most popular choice for small and medium-sized businesses. Requires at least one shareholder and has a minimum capital requirement of 10,000 TRY.
- Joint Stock Company (JSC – Anonim Şirket, A.Ş.): Suitable for larger businesses and corporations. Requires a minimum capital of 50,000 TRY and at least one shareholder.
- Branch Office: A foreign company can open a branch in Turkey, but it operates under the parent company’s name.
- Liaison Office: A non-commercial office established for market research and representation. It cannot engage in profit-making activities.
2. Meet the Legal and Financial Requirements
To establish a business in Turkey, foreigners must comply with certain legal and financial requirements:
- Get a Tax Number: Foreigners need a Turkish tax identification number, which can be obtained from the local tax office.
- Minimum Capital Investment: Depending on the business type, a minimum capital investment is required (e.g., 10,000 TRY for an LLC).
- Business Address: Your company must have a registered business address in Turkey. You can rent office space or use a virtual office service.
- Foreign Ownership: Turkey allows 100% foreign ownership in most business sectors, meaning you do not need a Turkish partner.
3. Register Your Business in Turkey
The business registration process includes the following steps:
Step 1: Prepare and Notarize the Articles of Association
The Articles of Association outline the company’s structure, ownership, and operational details. This document must be notarized at a Turkish notary office.
Step 2: Register with MERSIS (Central Registration System)
Company registration is done through the MERSIS system, an online platform managed by the Turkish Ministry of Trade.
Step 3: Open a Corporate Bank Account and Deposit Capital
You need to open a business bank account in Turkey and deposit the required minimum capital. Some of this amount must be transferred to the Competition Authority as a government requirement.
Step 4: Register with the Trade Registry Office
Your company must be registered with the Trade Registry Office in the city where you will operate. Required documents include:
- Articles of Association
- Shareholders’ and directors’ passports
- Proof of business address
- Bank deposit receipt
Step 5: Obtain a Tax Registration Certificate
After registration, you must obtain a Tax Registration Certificate from the local tax office. This allows you to conduct business legally and issue invoices.
Step 6: Register for Social Security (SGK) and Employment Taxes
If you plan to hire employees, you must register with the Social Security Institution (SGK) to pay social security and employment taxes.
4. Obtain Business Licenses and Permits
Depending on the nature of your business, you may need additional licenses or permits. For example:
- Tourism and Hospitality: Hotels, travel agencies, and restaurants require approval from the Turkish Ministry of Culture and Tourism.
- Construction and Real Estate: Construction businesses must obtain permits from the local municipality.
- Financial and Legal Services: Businesses in banking, insurance, or law must obtain special licenses from regulatory authorities.
5. Hire Employees (If Needed)
If your business requires employees, you need to:
- Follow Turkish Labor Laws: Employment contracts must comply with Turkish labor regulations.
- Apply for Work Permits (If Hiring Foreigners): Foreign employees require a work permit, which must be approved by the Turkish Ministry of Labor.
- Pay Social Security Contributions: Employers must register employees with the Social Security Institution (SGK) and make monthly contributions.
6. Promote and Grow Your Business
Once your business is registered, you need to market your services and attract customers. Some ways to promote your business include:
- Digital Marketing: Create a website, use social media, and invest in SEO to reach customers online.
- Networking: Join local business associations and chambers of commerce to build connections.
- Local Partnerships: Collaborate with Turkish businesses and distributors to expand your reach.
- Government Incentives: Explore investment incentives and grants offered by the Turkish government for foreign entrepreneurs.
Challenges and Considerations for Foreign Business Owners
While Turkey is a business-friendly country, there are some challenges to keep in mind:
- Language Barrier: While many Turks speak English, legal documents and business transactions are mostly conducted in Turkish. Hiring a translator or working with a local consultant can be helpful.
- Bureaucracy: The registration process can involve paperwork and official approvals, so working with a legal expert can speed up the process.
- Economic Fluctuations: Keep an eye on Turkey’s economic conditions, currency fluctuations, and market trends.
- Legal Compliance: Ensure that your business follows Turkish tax laws, labor laws, and regulations to avoid penalties.
Conclusion
Starting a business in Turkey as a foreigner is a great opportunity due to its growing economy, strategic location, and investor-friendly policies. By following the proper legal procedures, registering your company, and obtaining the necessary permits, you can successfully launch and grow your business in Turkey.
If you’re considering starting a business in Turkey, it’s advisable to seek legal and financial advice from professionals who specialize in company formation for foreigners. With the right guidance and preparation, your business in Turkey can thrive and succeed in this dynamic market.