UNLOCKING UNLOCKING OPPORTUNITIES: COMPANY FORMATION IN TURKEY FOR FOREIGN AND DOMESTIC INVESTORS

Unlocking Unlocking Opportunities: Company Formation in Turkey for Foreign and Domestic Investors

Unlocking Unlocking Opportunities: Company Formation in Turkey for Foreign and Domestic Investors

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Turkey has emerged as a magnet for investors worldwide, offering strategic advantages like a youthful population, attractive currency rates, and competitive labor costs. The journey towards company formation in Turkey is made smoother by a modern legal infrastructure and a business-friendly climate. For both local and foreign entrepreneurs, Turkey stands out as a prime location for starting or expanding a business.

Legal Framework for Company Establishment

The foundation for company establishment in Turkey lies in the Turkish Commercial Code (Law No. 6102). This pivotal legislation defines how businesses can be created, operated, and dissolved. Supplementary laws, including the Turkish Code of Obligations and the Turkish Civil Code, offer additional regulations impacting company activities. Once registered with the Trade Registry, a company gains legal personality, shielding investors from personal liabilities and providing the firm the ability to act independently under Turkish law.

Equal Opportunities for Foreign Investors

A significant advantage for foreign entrepreneurs is the Foreign Direct Investment Law (No. 4875), which ensures that foreign investors enjoy the same rights and protections as Turkish citizens. Since the passing of this legislation, company incorporation in Turkey has become considerably more accessible to international investors. Furthermore, the enactment of the 2024 Turkish copyright Law (No. 7518) has opened new avenues in the fields of digital assets and peer-to-peer platforms, enhancing Turkey's appeal to tech-driven ventures.

Types of Companies You Can Establish

The Turkish Commercial Code defines five types of companies:


  • Collective Companies

  • Commandite Companies

  • Cooperatives

  • Limited Companies

  • Joint-Stock Companies


Whether forming a limited company or a joint-stock company, the process is streamlined through the MERSİS system. Notably, Turkey allows the formation of single-shareholder companies, offering flexibility for entrepreneurs who wish to maintain full control.

Steps to Company Registration

Starting a business involves several key steps:

  • Drafting the articles of association,

  • Preparing and notarizing signatures of the company's directors,

  • Paying capital and registration fees,

  • Submitting all required documents to the Trade Registry Office.


With these formalities completed, your new company will be fully operational and legally recognized.

Taxation and Governance Essentials

Taxation is another critical area for investors. Typically, corporations are subject to a 20% corporate income tax, while financial institutions face a 25% rate. With the Turkish government introducing various tax amendments in 2024, staying informed is crucial for long-term planning.

Corporate governance standards in Turkey are robust, ensuring transparency and operational efficiency. The Turkish Commercial Code imposes strict regulations on board operations, helping businesses maintain ethical and legal compliance.

Alternative Investment Routes

Apart from direct company formation in Turkey, foreign investors may also consider options like share acquisitions, franchising, or establishing liaison offices. Franchising, in particular, offers an excellent opportunity as Turkey’s market is receptive to global brands, even though no specific franchising law exists.

The Investment Incentive Regime provides generous support through tax reductions, exemptions, and other benefits, further motivating foreign entrepreneurs to invest in Turkey.

Final Thoughts

In conclusion, company establishment in Turkey offers unparalleled advantages due to its legal protections, strategic geographic location, and progressive regulatory updates. Whether through traditional company formation, franchising, or share acquisitions, Turkey presents a wealth of opportunities. By navigating the system effectively, businesses can secure a strong foothold in one of the world’s most promising emerging markets.

For detailed guidance on how to start your journey, visit Pi Legal Consultancy's article.

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