Starting a Business in Turkey as a Foreigner: Company Formation, Work Permits, Banking and Tax Obligations

Introduction

Foreign nationals may establish, own and invest in companies in Turkey under substantially the same company-law framework that applies to Turkish investors.

In most sectors, a Turkish shareholder is not required merely because the founders are foreign. A company may therefore be established with foreign shareholding, including full foreign ownership, unless a sector-specific law imposes a nationality, licence or shareholding restriction.

Company registration is only the first stage of the process.

A foreign investor must also consider:

• The correct legal structure,
• Minimum and operational capital,
• Company management and signing authority,
• Registered office requirements,
• Corporate bank-account procedures,
• Tax registration,
• Accounting and invoicing,
• Work permits,
• Social-security registration,
• Municipal business licences,
• Sector-specific authorisations,
• Beneficial-ownership reporting,
• Liability for company and public debts.

A foreign person can legally own shares in a Turkish company without automatically obtaining the right to work in that company.

Share ownership, management authority, immigration status and work authorisation are separate legal questions. A foreign shareholder who actively manages, represents or works for the business may need a Turkish work permit even where that person owns the entire company.

This article explains the main legal and practical issues foreigners should consider when establishing and operating a business in Turkey.

Can a Foreigner Establish a Company in Turkey?

Yes.

Turkey’s foreign direct investment framework is based on equal treatment between domestic and international investors. Foreign investors may establish the company types regulated under the Turkish Commercial Code and are generally subject to the same company-formation and share-transfer rules as local investors.

A foreign investor may generally:

• Establish a new Turkish company,
• Purchase shares in an existing Turkish company,
• Establish a branch of a foreign company,
• Establish a liaison office where commercial activity will not be conducted,
• Participate in a joint venture,
• Operate through another legally appropriate business structure.

The appropriate option depends on whether the investor intends to conduct commercial activity, hire employees, issue invoices, import goods, enter contracts or merely perform market research and representation activities.

Is a Turkish Shareholder Required?

A Turkish shareholder is not generally required for an ordinary limited liability company or joint stock company.

Foreign investors may establish companies with full foreign shareholding. However, sector-specific rules may impose additional nationality, licence or ownership conditions in areas such as:

• Broadcasting,
• Civil aviation,
• Maritime transport,
• Banking,
• Insurance,
• Payment services,
• Capital markets,
• Energy,
• Education,
• Healthcare,
• Private security.

The Turkish Investment Office specifically notes that nationality restrictions may continue to apply in certain regulated sectors, including television broadcasting, maritime activities and civil aviation.

Before preparing the articles of association, the founders should therefore confirm whether the proposed activity requires:

• Ministry approval,
• Sector regulator approval,
• Minimum specialised capital,
• Turkish-qualified manager,
• Professional licence,
• Prior operating permit,
• Nationality-based shareholding structure.

A company may be successfully registered at the trade registry but still be legally unable to begin its intended regulated activity until the sector licence has been obtained.

Which Company Type Is Most Suitable?

The two structures most commonly selected by foreign investors are:

• Limited liability company, known as a Limited Şirket or Ltd. Şti.
• Joint stock company, known as an Anonim Şirket or A.Ş.

Both are separate legal entities.

The correct choice depends on:

• Number and identity of investors,
• Size of the business,
• Investment and financing plans,
• Share-transfer expectations,
• Management structure,
• Potential sale of the company,
• Public offering plans,
• Tax and liability considerations,
• Sector-specific requirements.

Limited Liability Company

A limited liability company is frequently used for:

• Small and medium-sized businesses,
• Consulting companies,
• Software and technology businesses,
• Import and export companies,
• Restaurants and retail businesses,
• Real estate management,
• Family-owned businesses,
• Professional commercial operations where legally permitted.

Its principal governing body is the shareholders’ assembly, while management and representation are carried out by one or more managers.

The articles of association should state clearly:

• Company name,
• Registered office,
• Business activities,
• Capital,
• Shareholders and shares,
• Managers,
• Representation authority,
• General assembly procedures,
• Profit-distribution rules.

A limited company may be commercially convenient, but the expression “limited liability” should not be interpreted as complete protection from every form of personal liability.

Where public debts cannot be collected from the company, limited company shareholders may be pursued in proportion to their capital shares under the public receivables legislation. Managers and other legal representatives may also face separate responsibility under the conditions applicable to public debts and management duties.

Joint Stock Company

A joint stock company is commonly preferred where the business is expected to involve:

• Multiple investors,
• Venture-capital financing,
• Different share groups,
• Employee equity arrangements,
• Major investments,
• Easier future transfer of shares,
• Regulated activity requiring an A.Ş.,
• Possible capital-market transactions.

The company is managed and represented through its board of directors.

Shareholders are generally responsible to the company for the capital they have undertaken to contribute. The Ministry of Trade describes joint stock company shareholder liability as being limited to the subscribed and paid capital.

This does not protect directors or representatives from liability arising from:

• Breach of legal duties,
• Unpaid public debts under applicable conditions,
• False company records,
• Unlawful distributions,
• Tax or social-security violations,
• Fraudulent conduct,
• Personal guarantees.

The choice between an A.Ş. and Ltd. Şti. should therefore be based on the business model rather than only the minimum establishment cost.

Minimum Capital Requirements

As of 1 January 2024, the statutory minimum capital is:

• TRY 250,000 for a joint stock company,
• TRY 50,000 for a limited liability company.

For a non-public joint stock company using the registered-capital system, the minimum initial capital is TRY 500,000. These minimum amounts remain the official general thresholds as of August 2026.

The statutory minimum does not necessarily represent adequate operational capital.

A company may also need funds for:

• Rent and deposit,
• Employees,
• Work permit criteria,
• Inventory,
• Imports,
• Customs payments,
• Equipment,
• Taxes,
• Social-security premiums,
• Professional services,
• Licences,
• Bank compliance.

A company established with only the legal minimum may be unable to meet work-permit criteria or demonstrate genuine economic activity.

Capital Payment

For a joint stock company, at least 25% of the subscribed cash capital is generally paid before registration, and the remaining amount must be paid within 24 months.

For a limited company, the subscribed capital may generally be paid within 24 months following registration; the 25% pre-registration payment requirement does not apply in the same way.

A contribution may also consist of qualifying non-cash assets, but additional procedures may be necessary, including:

• Court-appointed valuation,
• Confirmation that the asset is transferable,
• Registry annotations,
• Evidence that no attachment or restriction prevents contribution.

Intellectual property, equipment or real estate should not be inserted into the capital structure without examining valuation, ownership and tax consequences.

Share Capital and Work Permit Capital Are Different

The minimum capital required to establish a company should not be confused with the capital required for a foreign shareholder’s work permit.

For example, a limited company can legally be established with TRY 50,000 capital. However, a foreign shareholder who wishes to obtain a work permit through that company may be subject to a significantly higher capital threshold.

Under the current work permit criteria, the company must generally have at least TRY 500,000 paid-up capital, the foreign shareholder’s capital contribution must be at least TRY 500,000, and the foreign shareholder must own at least 20% of the company.

Foreign investors should structure the capital from the beginning according to both company-law and work-permit objectives.

Can One Person Establish a Company?

Both foreign individuals and foreign legal entities may participate as founders or shareholders.

A foreign parent company may establish a Turkish subsidiary, while an individual investor may establish a company directly.

Where the shareholder is a foreign legal entity, the Turkish registration file normally requires documents proving:

• The foreign company’s existence and active status,
• Its current authorised signatories,
• The corporate decision to establish or invest in the Turkish company,
• The person authorised to conduct the Turkish formation process,
• The natural person who will act where the foreign legal entity is appointed to a management body.

Foreign corporate documents must generally be authenticated through apostille or consular legalisation and translated into Turkish.

Company Formation Through MERSİS

Turkish company-registration procedures are initiated through the Central Registry Record System, known as MERSİS.

The articles of association are prepared electronically in the system, and the company receives a unique MERSİS number.

The Ministry of Trade confirmed in May 2026 that company formation documentation and contracts can be prepared electronically in MERSİS and signed through the available electronic, mobile-signature or registry procedures.

The registration is completed through the Trade Registry Directorate operating within the relevant Chamber of Commerce.

The Investment Office describes the trade registry as a one-stop company establishment point and states that a correctly prepared registration can be completed on the same day.

Actual preparation may take longer where foreign documents, apostilles, tax numbers, bank procedures or regulated-sector approvals are required.

Choosing the Company Name

The proposed company name must comply with Turkish commercial registry rules.

The name should:

• Be distinguishable from existing registered names,
• Include the company type,
• Avoid misleading descriptions,
• Reflect regulated activities accurately,
• Obtain necessary permission where a protected expression is used.

A company should also check:

• Internet domain availability,
• Trademark availability,
• Social-media use,
• Conflicting foreign brands,
• Meaning of the name in Turkish.

Trade registry approval of a company name does not automatically create trademark ownership.

A separate trademark application may be necessary to protect the commercial brand.

Business Activity and NACE Code

The company’s activities must be described in the articles of association.

The business activity also affects:

• NACE classification,
• Tax registration,
• Municipal licence,
• Chamber registration,
• Occupational safety obligations,
• Social-security risk classification,
• Sector permits,
• Work permit applications.

A company should avoid using an activity description that is either too narrow for the intended business or so broad that it includes regulated activities the company cannot legally perform.

A company registered for general consultancy cannot automatically operate as:

• Law firm,
• Medical clinic,
• Travel agency,
• Insurance intermediary,
• Payment institution,
• Private school,
• Real estate brokerage,
• Customs broker.

Each activity must be reviewed under its own professional and licensing legislation.

Registered Office

Every Turkish company must have a registered address.

The address may be:

• Rented office,
• Owned property,
• Qualifying shared office,
• Another legally usable commercial address.

The tenancy arrangement should permit the intended business activity.

Before signing a long-term lease, the investor should check:

• Zoning and authorised use,
• Building management rules,
• Municipal licensing,
• Signboard permission,
• Fire and safety conditions,
• Whether the landlord permits company registration,
• Withholding tax consequences of the rent,
• Whether the location is suitable for employees and inspections.

The company’s tax office may conduct an address inspection after registration. The Investment Office states that the trade registry notifies the tax office and that a tax officer may attend the registered headquarters to prepare a determination report.

A false or unusable registered address may lead to tax, banking and licensing problems.

Documents Required From a Foreign Individual Founder

A foreign individual commonly needs:

• Valid passport,
• Notarised Turkish passport translation,
• Potential Turkish tax identification number,
• Residence permit copy if resident in Turkey,
• Address information,
• Photographs where requested,
• Power of attorney where represented,
• Signature documents,
• Foreign identity number if available.

The Investment Office’s formation guidance expressly refers to translated and notarised passport copies, residence permit documentation for persons residing in Turkey and a Turkish tax identification number.

The exact list may vary according to:

• Trade registry,
• Nationality,
• Management position,
• Whether the person is physically present,
• Whether the company will open a pre-incorporation bank account.

Documents Required From a Foreign Corporate Shareholder

A foreign legal entity shareholder may need:

• Current certificate of activity,
• Commercial registry extract,
• Articles of association,
• Board or shareholder resolution approving the Turkish investment,
• Signatory certificate,
• Power of attorney,
• Appointment decision for the Turkish management body,
• Identification of the natural person representing the corporate director.

Documents issued abroad must generally be:

1. Issued by the competent authority,
2. Notarised where required,
3. Apostilled or legalised through a Turkish consulate,
4. Translated into Turkish by a sworn translator,
5. Notarised in Turkey where required.

The registration should not be attempted using expired or uncertified corporate documents.

Potential Tax Identification Number

Foreign founders, shareholders, directors and managers may need a Turkish potential tax identification number.

The Revenue Administration provides an online potential-tax-number application facility for foreigners.

The number may be required for:

• Company formation,
• Banking,
• Notarial transactions,
• Capital deposit,
• Tax registration,
• Property transactions,
• Work permit documentation.

A potential tax number should not be confused with:

• Foreign identity number,
• Company tax number,
• MERSİS number,
• Social-security workplace number.

Each serves a different administrative purpose.

Can the Company Be Established Through a Power of Attorney?

Yes.

A foreign founder does not always need to attend every Turkish procedure personally.

A properly drafted power of attorney may authorise a Turkish lawyer or representative to:

• Prepare MERSİS documents,
• Sign formation applications,
• Appear before the trade registry,
• Obtain tax numbers,
• Open necessary accounts where accepted by the bank,
• Execute company documents,
• Arrange translations,
• Receive registration documents,
• Make licence applications.

A power executed abroad may require apostille or Turkish consular legalisation and a sworn Turkish translation.

Banking authority should be drafted separately and specifically. A power sufficient for trade registry registration may not be accepted by a bank for opening and operating an account.

The investor should avoid granting unnecessary powers to:

• Transfer shares,
• Sell company assets,
• Borrow money,
• Give guarantees,
• Withdraw unlimited funds,
• Appoint substitute representatives.

Registration at the Trade Registry

After the MERSİS documents and supporting papers are completed, the founders apply to the competent Trade Registry Directorate.

The registration process includes matters such as:

• Registration petition,
• Articles of association,
• Founder and manager documents,
• Signature declarations,
• Chamber registration,
• Capital-payment evidence where applicable,
• Competition Authority payment,
• Documents for non-cash capital.

The Competition Authority contribution is 0.04% of the company’s capital and is paid through the relevant registration procedure.

Following registration, the company is announced in the Turkish Trade Registry Gazette.

The trade registry also notifies the tax office and Social Security Institution of the company’s incorporation.

Company Books and Corporate Records

Companies must maintain statutory commercial and accounting records.

Depending on the company type and current electronic-book requirements, relevant records may include:

• Journal,
• General ledger,
• Inventory book,
• Share ledger,
• Managers’ resolution book,
• General assembly meeting book,
• Board resolution book.

The company formation system includes certification or creation of relevant statutory books during the establishment procedure.

Foreign shareholders should not leave all corporate records under the exclusive control of an unmonitored local manager or accountant.

They should maintain access to:

• Trade registry documents,
• Tax returns,
• Bank statements,
• Share ledger,
• Corporate resolutions,
• Invoices,
• Payroll,
• Electronic signatures,
• Digital government accounts.

E-TUYS Foreign Investment Notifications

Companies and branches established in Turkey by foreign investors are subject to foreign direct investment information requirements through the electronic E-TUYS system.

The system receives information concerning:

• Company activities,
• Foreign capital,
• Share transfers,
• Foreign investment data.

The Investment Office states that these foreign-investment forms are now submitted electronically through E-TUYS rather than in printed form.

Failure to maintain correct foreign ownership and investment information may create problems during:

• Share transfers,
• Capital increases,
• Investment incentive applications,
• Official reviews,
• Future due diligence.

Opening a Corporate Bank Account

After incorporation, the company normally needs a corporate bank account to:

• Receive capital,
• Collect customer payments,
• Pay suppliers,
• Pay employees,
• Pay taxes and social-security premiums,
• Transfer dividends,
• Conduct import and export transactions.

The bank may request:

• Trade registry certificate,
• Trade Registry Gazette,
• Articles of association,
• Tax certificate,
• Signature circular,
• Managers’ passports and residence information,
• Shareholder structure,
• Beneficial-owner information,
• Business plan,
• Contracts and invoices,
• Expected transaction volume,
• Source of capital,
• Office lease,
• Work permit or residence information where relevant.

Banks must identify the legal entity, authorised representatives and actual beneficial owners under anti-money-laundering rules. MASAK guidance requires enhanced identification of persons who ultimately own or control a legal entity, including examination of qualifying shareholders and management where necessary.

Does Company Registration Guarantee a Bank Account?

No.

A company’s legal registration does not require a bank to accept it as a customer.

Banks conduct their own risk and compliance assessments.

A bank may request further information where the company involves:

• Non-resident shareholders,
• Complex ownership chains,
• High-risk countries,
• Cryptocurrency activity,
• International money transfers,
• Payment services,
• Cash-intensive business,
• Unclear source of funds,
• No physical operating address,
• Nominee shareholders or managers.

The investor should prepare a transparent banking file showing:

• Genuine business purpose,
• Source of capital,
• Ultimate beneficial ownership,
• Expected countries and counterparties,
• Contracts or commercial plans,
• Tax status,
• Authorised representatives.

Using a local nominee merely to avoid bank compliance questions can create serious ownership and fraud risks.

Personal and Corporate Funds Must Be Separated

The company’s bank account should be used for company income and expenses.

Foreign shareholders should avoid:

• Receiving customer payments personally,
• Paying company expenses through unrelated accounts,
• Withdrawing company money without documentation,
• Treating company revenue as personal income,
• Making unexplained cash transfers,
• Describing shareholder withdrawals as expenses.

Payments between the shareholder and company should have a legal and accounting basis, such as:

• Capital contribution,
• Shareholder loan,
• Salary,
• Expense reimbursement,
• Dividend,
• Repayment of debt.

Unrecorded withdrawals may create tax, corporate governance and criminal allegations.

Does Establishing a Company Give the Foreigner a Work Permit?

No.

Company ownership does not automatically grant a right to work.

The Ministry of Labour states that foreigners opening and actively operating their own workplaces must obtain a work permit before beginning work. Formation, registry and tax procedures are completed first, followed by the work permit application. The business licence is then obtained from the competent authority where required.

A foreign person may be a passive investor without carrying out daily work. However, activities such as personally:

• Managing employees,
• Signing operational contracts,
• Serving customers,
• Working in the shop,
• Providing consultancy,
• Performing professional services,
• Directing daily business

may be treated as work requiring authorisation.

The person’s title as “shareholder,” “director” or “manager” does not by itself remove the work permit requirement.

Work Permit Criteria for a Foreign Company Partner

Under the criteria in force in August 2026, a foreign shareholder applying for a work permit through a balance-sheet company is generally subject to the following financial conditions:

• The company’s paid-up capital must be at least TRY 500,000,
• The foreign shareholder’s own capital amount must be at least TRY 500,000,
• The foreign shareholder must own at least 20% of the company.

In addition, the company must generally employ at least five Turkish citizens.

For a newly established company or new foreign shareholder, the first work permit may be issued subject to an employment condition. The requirement to employ at least five Turkish citizens must generally be satisfied from the beginning of the seventh month of the first permit period and maintained monthly.

These are work permit evaluation criteria, not ordinary company incorporation conditions.

Work Permit Exemption for Major Capital Share

Where the foreign partner’s capital share is at least USD 100,000, the current foreign shareholder criteria concerning the ordinary capital, shareholding and five-Turkish-employee requirements are not applied in the same manner.

This does not mean the work permit is automatic.

The Ministry may still evaluate:

• Authenticity of the investment,
• Business activity,
• Documents,
• Public order,
• Professional qualifications,
• International labour policy,
• Sector restrictions.

Capital should be actually documented and reflected correctly in company records.

General Work Permit Criteria for Foreign Employees

For ordinary foreign employees, the workplace is generally expected to employ at least five Turkish citizens for each foreign worker.

A newly established balance-sheet company applying to employ a foreigner is generally required to have at least TRY 500,000 paid-up capital.

An operating company may instead satisfy one of the current financial criteria, including:

• Paid-up capital of at least TRY 500,000,
• Net sales of at least TRY 8,000,000,
• Exports of at least USD 150,000.

Salary criteria also depend on the position. The minimum declared salary is calculated as a multiple of the applicable gross minimum wage for categories such as:

• Senior executives and pilots,
• Engineers and architects,
• Other managers,
• Skilled or expert positions,
• Other workers.

The salary declared to the work permit system should correspond with payroll and social-security declarations.

Recent Work Permit Exceptions

As of 3 August 2026, a limited exception applies to certain domestic applications made for foreigners who have lawfully remained in Turkey for at least one year during the previous three years under a work permit, residence permit or international protection status.

For up to three qualifying foreign employees, the ordinary employment and financial-capacity criteria may not be applied, provided the number of foreign workers does not exceed the number of Turkish citizens employed at the workplace.

This is a current administrative criterion and should be reviewed at the application date.

It does not provide an unconditional right to a permit.

Domestic and Overseas Work Permit Applications

A domestic work permit application may generally be made for a foreigner holding a valid Turkish residence permit issued for at least six months and remaining valid on the application date, subject to official exceptions.

An overseas application is completed in two stages:

1. The foreigner applies personally through the Turkish embassy or consulate in the country of nationality or legal residence.
2. A 16-digit reference number is issued and used by the Turkish employer to complete the online application.

A duly completed application is generally evaluated within 30 days where all required information and documents have been submitted.

The work permit application should not be delayed until after the foreigner has already begun working illegally.

Work Permit and Residence Permit

A valid Turkish work permit generally provides the holder with the right to work and legally reside during the permit period, subject to the conditions of the permit.

However, the permit may be limited to:

• Specific employer,
• Specific workplace,
• Particular job,
• Defined period.

Changing employer or company position may require a new application.

Owning a company, holding a tax number or having a residence permit does not independently authorise employment.

Penalties for Working Without Permission

Turkey imposes administrative fines on:

• Foreigners working without a work permit,
• Employers employing foreigners without permission,
• Foreigners working independently without authorisation.

The Ministry of Labour publishes annually updated administrative fines. The 2026 penalty schedule provides substantially higher fines for repeat violations.

Unauthorised work may also affect:

• Residence permit,
• Deportation assessment,
• Entry ban,
• Future work permit applications,
• Business licence,
• Social-security liabilities.

The company should not describe an active foreign manager as an unpaid volunteer to avoid the permit system.

Workplace Opening and Operating Licence

Company registration does not necessarily authorise the physical workplace to begin operating.

Depending on the activity, the company may need a workplace opening and operating licence from:

• Municipality,
• Governorship,
• Ministry,
• Sector regulator,
• Organised industrial zone,
• Other competent authority.

The Ministry of Labour states that a foreign workplace owner or shareholder who actively operates the business must first obtain the required work permit and then apply to the relevant authority for the workplace licence.

Additional documents may concern:

• Fire safety,
• Hygiene,
• Building use,
• Occupational safety,
• Environmental permits,
• Professional qualifications,
• Food registration,
• Tourism certification,
• Health licence.

Corporate Tax

A Turkish resident company is generally subject to corporate income tax on its taxable worldwide profits, subject to tax treaties, exemptions and special rules.

The standard corporate income tax rate is generally 25%.

A 30% rate applies to specified institutions and activities, including banks, certain financial companies, payment institutions, insurance companies and designated public-private partnership projects.

Reduced rates, incentives or minimum-tax rules may apply depending on:

• Manufacturing,
• Export income,
• Investment incentive certificate,
• Public offering,
• Free-zone activity,
• Research and development,
• Technology development zones.

A foreign investor should not select the legal structure solely on the assumption that all Turkish companies pay one fixed effective rate.

Value Added Tax

Turkey applies value added tax, known as Katma Değer Vergisi or KDV, to taxable supplies of goods and services.

The principal current rates are:

• 1% for specified goods and services,
• 10% for items included in the relevant reduced-rate list,
• 20% for taxable transactions not included in the reduced-rate lists.

The correct rate depends on the precise product or service.

Examples such as food, accommodation, software, consulting, property, healthcare and education may be subject to specific rules, exemptions or withholding mechanisms.

The company should not copy a competitor’s invoice rate without tax analysis.

Dividend Withholding Tax

When profit is distributed to an individual or qualifying foreign shareholder, dividend withholding tax may apply.

The current general withholding rate on qualifying profit distributions is 15%, although an applicable double taxation treaty may reduce the rate.

A dividend can only be distributed properly after considering:

• Approved financial statements,
• Corporate tax,
• Legal reserves,
• Accumulated losses,
• General assembly decision,
• Withholding obligations,
• Double taxation treaty documents.

A shareholder cannot simply transfer company income abroad and label it a dividend.

Withholding Taxes

A Turkish company may also have withholding obligations concerning payments such as:

• Employee salaries,
• Workplace rent paid to an individual,
• Professional services,
• Certain construction payments,
• Dividends,
• Payments to non-residents,
• Royalties,
• Interest.

The applicable rate depends on the type of payment, recipient, domestic legislation and any tax treaty.

International service invoices should be reviewed for:

• Turkish withholding tax,
• VAT reverse charge,
• Permanent establishment risk,
• Transfer pricing,
• Treaty relief.

Accounting and Tax Declarations

A Turkish company should appoint a qualified accountant or certified public accountant appropriate to the business.

Regular obligations may include:

• Bookkeeping,
• Electronic invoices,
• Electronic archive invoices,
• VAT returns,
• Withholding and social-security declarations,
• Provisional corporate tax,
• Annual corporate tax return,
• Payroll,
• Stamp tax,
• Ba-Bs or replacement electronic reporting where applicable,
• Beneficial ownership notifications,
• Independent audit where thresholds are met.

The Revenue Administration publishes a current tax calendar covering corporate returns, provisional tax and beneficial-ownership notifications.

Delegating filing to an accountant does not eliminate the managers’ responsibility to monitor compliance.

Beneficial Ownership Reporting

Corporate taxpayers must report their real beneficial owners to the Revenue Administration.

The purpose is to identify the natural person or persons who ultimately own, control or benefit from the legal entity.

The beneficial owner may not always be the person formally appearing as the direct shareholder.

Relevant information may include:

• Direct ownership,
• Indirect ownership,
• Voting control,
• Management control,
• Ultimate parent structure.

The reporting framework is established under Revenue Administration rules and remains part of the 2026 tax calendar.

Complex foreign ownership chains should be mapped accurately before banking and tax filings.

Social-Security Registration

When the company hires employees, it must complete the applicable Social Security Institution registrations and payroll procedures.

The trade registry transmits company establishment information to the Social Security Institution. Separate employee registration and reporting obligations nevertheless remain.

Company-formation information can also support automatic workplace registration for employers declaring that insured employees will be employed.

The employer must manage matters including:

• Employee start notifications,
• Monthly premium declarations,
• Payroll,
• Occupational accident notifications,
• Termination notifications,
• Work permit and SGK consistency for foreigners,
• Occupational health and safety.

Failure to report employees properly can result in premiums, interest and administrative fines.

Foreign Employees and Social Security

A foreign employee working under a Turkish work permit is generally registered under the Turkish social-security system unless an applicable international social-security agreement or temporary assignment rule provides otherwise.

The employer should review:

• Employee’s nationality,
• Certificate of coverage from the foreign country,
• Bilateral social-security agreement,
• Assignment period,
• Turkish payroll,
• Work permit salary.

The salary reported to SGK should not contradict the amount declared during the work permit application.

Shareholder Agreements

The articles of association are not always sufficient to regulate the relationship between investors.

Where there is more than one shareholder, a separate shareholders’ agreement may address:

• Management appointment,
• Voting,
• Reserved decisions,
• Financing obligations,
• Profit distribution,
• Share transfers,
• Pre-emption rights,
• Tag-along rights,
• Drag-along rights,
• Deadlock,
• Non-compete obligations,
• Confidentiality,
• Dispute resolution,
• Exit procedure.

The agreement should be coordinated with the articles of association.

A private contractual provision may bind the shareholders personally but may not create the same effect against the company or third parties unless it is also reflected properly in corporate documents.

Never Use a Nominee Without a Strong Legal Structure

Some foreign investors are advised to place shares in the name of a Turkish friend, employee or consultant to simplify banking, licences or work permits.

This can result in the investor losing legal control.

The person registered as shareholder may be able to:

• Vote,
• Transfer shares,
• Claim dividends,
• Block decisions,
• Deny the informal arrangement,
• Become subject to personal creditors,
• Die and pass the shares to heirs.

An informal message saying that the shares “really belong” to the foreign investor may not provide sufficient protection.

The actual ownership structure should be registered lawfully and supported by appropriate corporate and contractual documents.

Management and Signing Authority

The company’s internal ownership and external representation are different matters.

A person may own most of the shares without having authority to sign for the company.

The trade registry and signature documents should clearly state:

• Who represents the company,
• Whether representation is individual or joint,
• Financial limits,
• Branch authority,
• Bank authority,
• Contract authority,
• Duration of appointment.

Foreign investors should not give one local manager unlimited authority over:

• Bank accounts,
• Loans,
• Guarantees,
• Property sales,
• Share transfers,
• Tax settlements.

Bank mandates and signature rules should reflect the agreed governance structure.

Buying an Existing Company

Purchasing shares in an existing company may be faster than establishing a new business, but it can also transfer substantial hidden risk.

Before acquiring shares, the buyer should investigate:

• Tax debt,
• SGK debt,
• Employee claims,
• Litigation,
• Enforcement files,
• Bank loans,
• Guarantees,
• Related-party transactions,
• Unpaid capital,
• Accounting records,
• Licences,
• Data-protection compliance,
• Customs liabilities,
• Intellectual property,
• Beneficial ownership filings.

A share purchase transfers ownership of the company with its history.

Purchasing only selected business assets may reduce some historical risk but requires a separate analysis of contracts, employees, tax and licences.

Branch Office

A foreign company may establish a Turkish branch.

A branch:

• Does not have shareholders,
• Is not a separate legal entity from the foreign parent,
• Operates within the parent company’s business purpose,
• Is represented in Turkey by an authorised representative,
• Does not have an ordinary statutory minimum capital requirement, although operating funds should be allocated.

Foreign documents concerning the parent company, branch decision and representative must generally be apostilled or consularly legalised and translated into Turkish.

Because the branch is not legally separate, the foreign parent company may be directly exposed to branch obligations.

Transferred branch profits may be subject to 15% withholding, subject to possible reduction under an applicable double taxation treaty.

Liaison Office

A foreign company may apply to establish a liaison or representative office in Turkey.

A liaison office is not permitted to conduct commercial activities or generate ordinary commercial revenue in Turkey.

It may perform authorised non-commercial functions such as:

• Market research,
• Representation,
• Supplier coordination,
• Technical support within the authorised scope,
• Regional coordination.

A licence is obtained from the Ministry of Industry and Technology.

Initial liaison office licences may be granted for up to three years, depending on the declared activity. The Ministry may review actual activities, expenses and employees when considering extensions.

A liaison office should not:

• Issue sales invoices,
• Sell goods or services,
• Receive commercial revenue,
• Operate as a hidden branch.

Where commercial activity is intended, a subsidiary or branch should be considered.

Closing or Liquidating a Company

A company cannot be abandoned merely by closing the office or stopping business.

Formal liquidation may require:

• Corporate resolution,
• Appointment of liquidator,
• Trade registry registration,
• Creditor announcements,
• Collection and payment of debts,
• Tax filings,
• SGK closure,
• Disposal of assets,
• Final financial statements,
• Deregistration.

Managers and shareholders should also review:

• Employee termination rights,
• Lease termination,
• Work permits,
• Banking,
• Licences,
• Data retention,
• Unused electronic signatures.

Leaving Turkey does not automatically end the foreign shareholder’s legal or tax responsibilities.

Common Mistakes Made by Foreign Entrepreneurs

Common mistakes include:

• Assuming company ownership grants a work permit,
• Establishing a TRY 50,000 company and expecting it to qualify for a shareholder work permit,
• Using a nominee shareholder,
• Giving unlimited power of attorney to an agent,
• Registering a false office address,
• Beginning regulated activity before receiving a licence,
• Opening the company under the wrong NACE code,
• Mixing personal and company money,
• Paying employees outside payroll,
• Failing to report beneficial ownership,
• Trusting only the accountant without reviewing filings,
• Using a personal bank account for company revenue,
• Withdrawing company money without legal documentation,
• Failing to pay capital,
• Ignoring public debt liability,
• Believing registration guarantees a corporate bank account,
• Purchasing an old company without due diligence,
• Stopping activity without formal liquidation.

Practical Formation Checklist

Step 1: Define the business activity

Determine exactly what the company will sell or provide.

Step 2: Check sector restrictions

Confirm whether foreign ownership, professional qualifications or prior licences are required.

Step 3: Choose the company type

Compare the limited and joint stock company structures.

Step 4: Plan the capital

Consider both statutory minimum capital and work permit criteria.

Step 5: Choose the shareholders and managers

Avoid nominee arrangements and unclear control structures.

Step 6: Select the registered office

Check commercial use, municipal licensing and tax consequences.

Step 7: Obtain foreign documents

Prepare passports, corporate certificates, resolutions and powers of attorney.

Step 8: Complete apostille and translation

Ensure the full foreign document is legalised before Turkish use.

Step 9: Obtain tax numbers

Secure potential tax identification numbers for relevant foreign persons.

Step 10: Prepare the articles through MERSİS

State activities, capital, ownership and management accurately.

Step 11: Complete trade registry registration

Register with the competent Trade Registry Directorate.

Step 12: Establish tax and accounting systems

Appoint the accountant, obtain the tax certificate and prepare invoicing.

Step 13: Open the corporate bank account

Submit the corporate, shareholder and beneficial ownership file.

Step 14: Apply for licences

Do not begin licensed activity prematurely.

Step 15: Apply for work permits

Complete shareholder or employee permit applications before work begins.

Step 16: Register employees with SGK

Align payroll, permits and social-security records.

Step 17: Maintain corporate compliance

Monitor tax, books, beneficial ownership, E-TUYS and corporate resolutions.

Frequently Asked Questions

Can a foreigner own 100% of a Turkish company?

Yes, full foreign ownership is generally permitted unless a sector-specific restriction applies.

Is a Turkish partner required?

Not for an ordinary limited or joint stock company. Regulated sectors may impose special requirements.

What is the minimum capital for a limited company?

The general statutory minimum is TRY 50,000.

What is the minimum capital for a joint stock company?

The general minimum is TRY 250,000. The minimum initial capital for a non-public A.Ş. using the registered-capital system is TRY 500,000.

Must all limited company capital be paid immediately?

Limited company capital may generally be paid within 24 months after registration.

Must joint stock company capital be paid before registration?

At least 25% of the subscribed cash capital is generally paid before registration, with the remainder payable within 24 months.

Can a foreign company be a shareholder?

Yes. Current corporate existence, authority and establishment documents must be properly legalised and translated.

Do foreign documents need an apostille?

Documents issued in an Apostille Convention country generally require an apostille. Other documents may require Turkish consular legalisation. They must then be translated and notarised where required.

Can the company be established remotely?

Many procedures can be completed through a properly drafted power of attorney. Bank and signature procedures may still require personal attendance depending on the institution.

How is the company registered?

The articles are prepared through MERSİS, and registration is completed through the competent Trade Registry Directorate.

Does company formation grant a residence permit?

No. Residence and company ownership are separate matters.

Does company formation grant a work permit?

No. A foreign shareholder who actively works or manages the business may need a work permit.

What capital is required for a foreign shareholder’s work permit?

The company and foreign shareholder are generally subject to a TRY 500,000 capital threshold, and the foreign shareholder must ordinarily hold at least 20% of the company.

Must the company employ Turkish citizens?

For the ordinary foreign shareholder work permit, at least five Turkish citizens must generally be employed from the beginning of the seventh month of the first permit period.

Is there an exception for large investors?

The ordinary foreign shareholder capital, percentage and employment criteria are not applied in the same manner where the foreign shareholder’s capital share is at least USD 100,000.

Can a company registration guarantee a bank account?

No. Banks independently evaluate identity, beneficial ownership, source of funds and business risk.

Can company revenue be received in the shareholder’s account?

This should be avoided. Company income and personal funds should remain separate and properly recorded.

What is the standard corporate tax rate?

The standard corporate income tax rate is generally 25%, while designated financial and other specified institutions may be subject to 30%.

What are the VAT rates?

The principal rates are 1%, 10% and 20%, depending on the goods or services.

What is the dividend withholding rate?

The general current rate is 15%, subject to possible reduction under a double taxation treaty.

Are limited company shareholders protected from all company debts?

No. In particular, shareholders may be pursued in proportion to their shares for qualifying public debts that cannot be collected from the company.

Can I open a liaison office and sell services?

No. A liaison office cannot conduct ordinary commercial activity or generate sales revenue in Turkey.

Is a branch a separate company?

No. A Turkish branch is legally connected to the foreign parent company.

Can I buy an existing Turkish company?

Yes, but legal, tax, employment, banking and regulatory due diligence should be completed before purchasing shares.

Conclusion

Foreign investors may establish and fully own companies in Turkey under the general equal-treatment principle of the foreign direct investment framework.

The limited liability company and joint stock company are the most common structures.

The general minimum capital is:

• TRY 50,000 for a limited liability company,
• TRY 250,000 for a joint stock company.

However, the company-law minimum should not be confused with the foreign shareholder work permit criteria.

A foreign shareholder seeking a work permit through the company is generally expected to satisfy a TRY 500,000 personal capital contribution, at least 20% ownership and the relevant company capital requirement. The company must ordinarily employ at least five Turkish citizens from the beginning of the seventh month of the first work permit.

Company formation is initiated through MERSİS and completed at the competent Trade Registry Directorate.

Foreign documents must be prepared carefully. Passports, foreign company certificates, corporate resolutions and powers of attorney may require apostille or consular legalisation, sworn Turkish translation and notarial certification.

After registration, the company must address:

• Tax registration,
• Corporate bank account,
• Accounting,
• Beneficial ownership,
• Foreign investment notifications,
• Social security,
• Work permits,
• Municipal and sector licences.

A registered company does not automatically receive a bank account, licence, work permit or residence permit.

Banks independently examine the ownership structure, authorised representatives, source of funds and genuine business purpose.

Foreign investors should also separate company finances from personal funds. Customer payments, shareholder loans, salaries, dividends and expenses must be documented according to their real legal and accounting nature.

The standard corporate income tax rate is generally 25%. VAT, withholding tax, social-security contributions and sector-specific tax rules may also apply.

Finally, limited liability does not eliminate every personal risk. Managers, legal representatives and limited company shareholders may face responsibility under corporate, tax, social-security and public receivables legislation.

A company should therefore be structured according to the investor’s long-term commercial, employment, banking and tax objectives rather than being formed only as quickly or cheaply as possible.