SETTING UP BUSINESS IN TURKEY
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For many years Turkey has attracted foreign investment due to its unique trading location between Asia, Europe and the Middle East. Turkey is recognised globally as a country of significant importance, with many public and international companies opening offices in and around Turkeys’ major cities. The vast majority of these larger companies base themselves in Istanbul and Ankara.
* Why set up a business in Turkey?
Government incentives for investors and new businesses include:
. The right for foreign companies to hold “Turkish Company” status, giving new business owners the same rights and obligations as existing Turkish companies;
. Guarantee of existing investment rights;
. Conformity with international standards;
. Changing the definition of a foreign investor to include companies registered outside the country, non-Turkish nationals and Turkish nationals living outside the country;
. Imports of certain machinery and equipment are now exempt from customs duties, levies and VAT;
. Certain exemptions from income tax and social insurance contributions;
. Energy subsidies;
. Incentives available in Turkey’s free trade zones, including exemptions from a number of taxes and customs duties;
. Better protections for foreign investors.
* How do you set up a business in Turkey?
There are a number of options available to set up a business in Turkey.
. First, you will need to seek some solid legal advice and do your research with the relevant authorities.
. Foreign investors may consider to set up such companies as collective companies, joint stock companies, commandite companies (business set up to run under a trade name), liaison offices and the set up of a branch of an existing foreign company.
* Can foreigners open a private limited company in Turkey?
Yes. A private limited company is the most popular form of business for foreigners and can be set up by two or more non-Turkish nationals. At least one shareholder is required to form this type of company, with a minimum share capital of 10,000TL.
* Where can I seek advice on setting up a business in Turkey?
The first port of call for many is their lawyer. Be sure to work with a good legal advisor that knows company laws in Turkey .
* What kind of business can a foreigner set up in Turkey?
There are a number of businesses that foreigners cannot open in Turkey without prior approval from the Ministry of Commerce and Industry. These include banks, factoring, private finance institutions, foreign currency exchange offices, companies subject to Capital Markets Law, public warehousing and operators of free-trade zones.
* What does the set-up of a Turkish limited liability company cost?
Legalities and costs of business set-ups in Turkey differ from the most other countries. A private limited company costs a total of 10,000TL, which will need to be deposited during the initial phase of the incorporation. The liability of the shareholders is limited to the share capital invested in the company.
* What is the set-up process?
. The company incorporation process in Turkey is relatively straightforward, and the investor will be able to begin trading within a week, as long as they have everything in order.
. The first task is drafting the articles of association, which need to be signed by the company directors. The articles of association must be drawn up legally and conform to article 279 of the Turkish Commercial Code. The document needs incorporate the phrase “limited” in the companies trading name. Founders need to state their nationality, full names, surnames, addresses, and trading address. The document is then taken to be officially notarised and translated where necessary.
. The minimum share capital must be deposited in a bank account in the company name.
. After this, investors can begin the registration process, paying a fee to the Turkish Commercial Registry Office, with the necessary documents.
. The Registry Office will issue a registration certificate and the company’s incorporation is published in the Turkish Gazette.
. The company must then register for VAT with the relevant tax authority.
* Turkish laws regarding trading names
. Your trading name must be original and not registered by anyone previously.
. It should not mislead third parties and the words “Turkiye; Turk; Cumhuriyet; Milli” cannot be used without the specific approval of the Turkish Council of Ministers.
. Foreign words and titles can only be used in the trading name if they do not contradict any government or cultural laws or policies.
* How to register your Turkish company with the Trade Registry Office
. The Turkish Chamber of Commerce has offices throughout Turkey in all major cities and most towns. Having filled out your Articles of Association and had them officially notarised, contact them within 15 days to organise the official trade registry.
. On registry you will need your filled in company registration application form, your written request for application, suitable identification proving you are the founding members, a letter of commitment in line with Article 29 of the Trade Registry Regulations, and a receipt of payment of the deposit necessary to the Customers Fund Account (normally 1/1000 of the company’s capital).
A private limited company set up and resident in Turkey will have to pay full tax on profits earned and declared.