ΕλληνικάNational treatment is the starting point
The feature of Turkish company law that most surprises foreign investors is how little of it treats them differently. Under the Turkish Commercial Code No. 6102 and the Foreign Direct Investment Law No. 4875, a foreign investor has the same rights, obligations and protections as a Turkish one. Full foreign ownership is permitted across the great majority of commercial sectors, and there is no general requirement for a local partner, a joint venture or a minimum domestic shareholding.
That general position does not mean an absence of sector-specific licensing or regulatory restrictions. Sectoral legislation may impose separate authorizations, minimum capital or shareholding conditions depending on the intended activity, and the position of the proposed business under that legislation should be assessed before the structure is settled.
A Turkish company may be formed with a single foreign shareholder, and that shareholder need not reside in Türkiye. The practical work of incorporation therefore lies not in obtaining permission but in choosing the right vehicle and assembling the documents correctly.
The choice between the two principal vehicles
Two structures account for nearly all foreign investment: the limited şirket, abbreviated Ltd. Şti., and the anonim şirket, abbreviated A.Ş.
The limited şirket is the more common choice. It may be formed by between one and fifty shareholders, requires a lower minimum capital, has no obligatory board structure and is cheaper to run. It suits the majority of small and medium operations, including subsidiaries established to trade or hold assets in Türkiye.
The anonim şirket carries a higher minimum capital and a more formal governance structure, but it offers advantages the limited şirket cannot. There is no upper limit on shareholders, the transfer of shares is subject to a more flexible regime, and it is the vehicle required for a public offering. It is also mandatory in certain regulated sectors, including banking, insurance, factoring, portfolio management and independent audit.
The minimum capital figures are as follows. For a limited şirket, TRY 50,000, the whole of which may be paid within twenty-four months following registration. For an anonim şirket, TRY 250,000, of which at least twenty-five per cent must be paid before registration and the remainder within twenty-four months following it. For a non-public joint stock company adopting the registered capital system at incorporation, the minimum initial capital is TRY 500,000.
The distinction that matters most in practice is share transfer. In a limited şirket the transfer of shares is subject to statutory formal requirements, including notarial form and, as a general rule, approval by the general assembly, subject to the provisions of the articles of association and the Turkish Commercial Code. In an anonim şirket the transfer procedure is materially more flexible. An investor who anticipates bringing in further shareholders, raising capital or exiting by sale should weigh that before incorporating, because converting later is possible but neither quick nor free.
Branch and liaison offices
A foreign parent need not incorporate a subsidiary at all. A branch office may be registered, which is not a separate legal person and leaves the parent directly liable, and a liaison office may be opened for representative activity only. A liaison office may not trade or generate income in Türkiye, which is the limitation that most often makes it unsuitable once a business begins to develop.
For most investors the subsidiary remains the better structure, because it isolates liability and because a company incorporated in Türkiye generally operates as a Turkish legal entity for domestic commercial and regulatory purposes. Sector-specific legislation may nonetheless impose additional requirements or distinguish between Turkish entities according to ownership, licensing or other criteria.
The incorporation procedure
Incorporation runs through MERSİS, the central registry system, and completes on registration with the Trade Registry Directorate of the relevant chamber of commerce. The company comes into existence, and may lawfully trade, contract and invoice, from the moment of that registration and not before.
The steps in practice are the reservation of the trade name, preparation of the articles of association, obtaining potential tax identification numbers for the foreign shareholders and board members, execution of the required documents before the trade registry or a notary, opening the company bank account and depositing the capital, and registration and announcement.
The potential tax identification number forms part of the incorporation process and is particularly relevant to the opening of the company bank account and the deposit of the incorporation capital. It is better understood as an ordinary step in the process than as an unconditional pre-registration tax obligation in every case.
Where the documentation is complete, incorporation is in practice a matter of days rather than weeks, and foreign investors commonly complete within one to two weeks. That is a practical indication rather than a statutory period; for a foreign investor the principal variable is usually the preparation, apostille or legalization and translation of documents from the country of origin.
Where the delay actually comes from
The registry is rarely the bottleneck. The delay is almost always upstream, in the document chain from the investor’s own country.
Foreign individual shareholders and board members must produce an apostilled and sworn-translated passport copy. Foreign corporate shareholders must produce apostilled and translated constitutional documents and evidence of signing authority.
For countries within the Hague Apostille framework this is straightforward. For those outside it a consular legalisation chain applies, but the sequence depends on the country of origin and on any applicable bilateral arrangements. The applicable authentication and legalization chain should therefore be confirmed for the specific jurisdiction rather than assumed to follow a single universal sequence.
The practical consequence is that document preparation should begin well before the intended incorporation date.
Directors, shareholders and residence
At least one director must be appointed. In a limited şirket at least one director must also be a shareholder, but no director need be a Turkish national or resident. Ownership and management may therefore sit entirely outside Türkiye.
That said, a company with no resident director and no local presence encounters practical friction, particularly with banks.
Tax, accounting and social security
Registration brings continuing obligations. The company must register with the tax office, maintain statutory books, file periodic returns and, once it employs anyone, register with the social security institution. Turkish accounting practice requires a qualified professional, and the obligation is not one a foreign parent can discharge from abroad.
The corporate income tax rate, the VAT position and the withholding treatment on dividends repatriated to a foreign parent are sufficiently time-sensitive that they should be confirmed by an up-to-date tax review in relation to the specific structure rather than assumed from published figures. Türkiye and Greece are parties to the Convention for the Avoidance of Double Taxation with Respect to Taxes on Income, signed in Ankara on 2 December 2003. That Convention concerns taxation and related matters including exchange of information; it is not a bilateral treaty governing the recognition and enforcement of foreign court judgments.
Residence and work permits
Establishing a company does not automatically confer a right of residence. Turkish immigration law contains residence categories relevant to foreigners who intend to establish business connections or set up a business in Türkiye, but the existence of a company does not itself guarantee residence permission.
On work permits, the criteria currently applicable to a foreign partner obtaining a permit through their own company include a capital contribution of at least TRY 500,000, a shareholding of at least twenty per cent, and the employment by the company of at least five Turkish citizens. For an initial work permit the five-employee requirement is subject to a transitional mechanism under which it applies from the beginning of the seventh month. Foreign partners holding a capital share of at least USD 100,000 are exempt from these financial and employment criteria.
These criteria are subject to change and should be confirmed as at the date of any application.
Commercial considerations
Beyond the legal position, several practical points support incorporating in Türkiye. The country sits between the European, Middle Eastern and Asian markets and has a customs union with the European Union covering industrial goods. A company incorporated in Türkiye generally operates as a Turkish legal entity for domestic commercial and regulatory purposes, which a foreign entity trading into Türkiye does not. Comparisons of operating cost are a commercial consideration rather than a legal advantage.
For a Greek business in particular, proximity and established trade routes make a Turkish subsidiary a proportionate step rather than a major undertaking.
A reasonable sequence
Settle the choice of vehicle first, by reference to how the business is expected to develop rather than to the cost of incorporation, and assess the position of the intended activity under sectoral legislation. Then confirm what the document chain requires in the investor’s own country and begin it, since that is where time is lost. Prepare the articles of association to reflect the intended governance rather than adopting a standard form. Register. Then put the tax, accounting and social security position in place before trading begins, and address any permit requirement as part of the same exercise.
Company formation and corporate structuring, immigration and work permit consequences, tax consequences, and sector-specific licensing should each be treated as a distinct question rather than folded into one another.
Frequently asked questions
Can a foreigner own a Turkish company outright? Yes. Full foreign ownership is permitted in the great majority of sectors, and a company may be formed with a single foreign shareholder. No local partner is required. That does not exclude additional licensing or regulatory conditions in particular sectors.
Do I need to live in Türkiye? No. Neither shareholders nor directors need be resident in Türkiye, although a company with no local presence encounters practical difficulties, particularly in banking.
What is the minimum capital? TRY 50,000 for a limited şirket, payable in full within twenty-four months of registration. TRY 250,000 for an anonim şirket, of which at least twenty-five per cent is payable before registration. TRY 500,000 minimum initial capital for a non-public joint stock company adopting the registered capital system.
How long does incorporation take? Registration itself is usually a matter of days once the file is complete, and most foreign investors complete within one to two weeks. That is not a statutory period; the document chain from your own country determines the real timetable.
Does forming a company give me residence? Not automatically. Residence and work permits are separate regimes with their own conditions, and the existence of a company does not itself guarantee a permit. Where residence is an objective it should shape the structure from the outset.
Do I need a Turkish tax number? A potential tax identification number is obtained for foreign shareholders and board members as part of the incorporation process, and is particularly relevant to opening the company bank account and depositing the capital.
Contact OIKONOMAKIS LAW, in collaboration with Av. Arb. Necmiye Bildirir.
leads@oikonomakislaw.com · +90 534 461 62 44
This publication provides general legal information and does not constitute legal advice on any individual matter. Turkish company law, the applicable capital thresholds, tax rates and permit conditions are subject to change, and the position should be verified in relation to the specific business and investor concerned. Assessment of a specific matter requires advice from a lawyer qualified in Türkiye.
Prepared through the collaboration of Christos Oikonomakis and Av. Arb. Necmiye Bildirir, OIKONOMAKIS LAW