Company formation in Turkey is open to foreign investors on the same terms as Turkish nationals, under the Foreign Direct Investment Law No. 4875. The difficulty is never the principle. It is that a company is quick to incorporate and slow to close, that directors carry personal exposure most foreign founders are never warned about, and that the company’s own standing decides whether it can employ the people it was created to employ.
The Structure Is Not a Formality
Most foreign-owned businesses in Turkey are limited liability companies or joint stock companies under the Turkish Commercial Code No. 6102. The choice is usually presented as an administrative detail. It is not. The two differ in how shares are transferred, how directors are appointed and removed, what happens when shareholders fall out, and in exposure to unpaid public debts.
Director Liability
A director of a Turkish company can be held personally responsible for the company’s unpaid public debts, including tax and social security liabilities. Foreign founders who appoint a local director for convenience, or who accept a directorship in someone else’s company as a favour, usually learn this when a collection notice arrives. Resigning does not retroactively remove exposure for the period in office.
Employing Foreign Staff
A company cannot employ a foreign national simply because it wishes to. Quota, capital and existing employment conditions apply to the employer, and a young or small company often cannot support an application at all. If your plan depends on employing yourself or specific foreign staff, the corporate structure and the hiring plan have to be designed together rather than in sequence. See work permits for employees and employers.
Contracts and Counterparties
Commercial contracts governed by the Code of Obligations No. 6098 and the Commercial Code are enforceable. Enforcement is nonetheless where foreign businesses lose money: agreements signed by someone without authority to bind the company, no workable jurisdiction or arbitration clause, and no security taken. Checking a counterparty’s trade registry record and signing authority before signature costs very little next to pursuing a judgment afterwards.
Disputes, Recovery and Exit
We act in shareholder disputes, terminations of distributorship and agency arrangements, debt recovery through enforcement proceedings, and commercial litigation and arbitration. Closing a Turkish company properly, through liquidation, deregistration and the clearing of tax and social security records, takes longer than founders expect and is often left half-finished, which keeps obligations alive after the business has stopped trading.
Tax Follows Structure
How the business is set up determines what it pays. Corporate tax, VAT, withholding and the treatment of payments to a foreign parent all follow from decisions taken at incorporation. See tax for foreigners and foreign companies.
What We Do
We incorporate companies and branches for foreign investors, draft and review shareholder agreements, articles of association and commercial contracts, run due diligence on Turkish counterparties and acquisition targets, advise directors on personal exposure, act in shareholder and commercial disputes, and handle liquidation and exit.
Company Formation in Turkey, Start to Finish
We handle company formation in Turkey from start to finish by power of attorney: tax numbers for foreign shareholders and directors, apostilled and translated documents, the articles of association on MERSİS, signature at the Trade Registry, and the company bank account. With complete documents, registration takes a few business days. Our guide to company registration in Turkey explains company types, minimum capital, costs and taxes.
Speak to a Company Lawyer in Turkey
Tell us what the business will actually do here and who will work in it. The right structure follows from that, not the other way round.
Contact our office or call +90 533 301 52 23.