A Country Where Continents and Markets Cross: Turkey

Turkey is strategically located at the crossroads of Europe, Asia, and Africa, providing access to global markets. In addition, with its young and educated population, growing dynamic economy, and advancing technology, Turkey is increasingly becoming a preferred destination for entrepreneurs looking to do business worldwide.

Why Start a Company in Turkey?

Dynamic Economy

According to 2022 year-end data, Turkey's economy is over USD 940 billion, and per capita income is over USD 10,500. Turkey's average growth rate in the last 5 years has been around 4.5 percent. Its exports are worth more than USD 250 billion, and its imports are more than USD 360 billion annually. As the 21st largest economy in the world, Turkey has a highly sophisticated, dynamic, and vibrant domestic market.

Geographical Location

Turkey offers easy access to a population of 1.3 billion people and a market worth USD 26 trillion, covering Europe, the Middle East, North Africa, and Central Asia within a 4-hour flight distance. Surrounded by sea on 3 sides, it is a great advantage to trade to all 3 continents by the sea at affordable costs. Global companies increasingly choose Turkey as a production, export, and management hub.

Skilled and Competitive Labor Force

Approximately 15 percent of Turkey's 85 million population consists of young people. Half of the population is under the age of 32. Turkey ranks 3rd in Europe in terms of the size of its qualified and educated labor force (35 million). It is easy to find qualified personnel. Labor costs are considerably lower than in developed countries. Labor market legislation is in line with European Union legislation.

Investment Climate

Turkey's investment legislation is simple, in line with international standards, and treats all investors equally. Turkey allows investors to do business at lower costs than other European countries. Desirable incentives and support programs are in place for domestic and foreign investors. The tax burden on companies is lower than in European countries. Turkey has double taxation agreements with 81 countries.

Developed Infrastructure

Turkey has a highly modern and high-tech banking and financial market. Telecommunications, logistics, and transportation infrastructure are well-developed. It is possible to reach all parts of Turkey by road, air, and train. Maritime transportation is highly developed. Turkish Airlines flies to 255 destinations in 122 countries.

International Memberships and Conventions

Turkey has been a member of NATO since 1952 and has had a Customs Union agreement with the EU since 1996. It is a member of the World Trade Organization and the OECD. It is a party to many international trade agreements. It has free trade agreements with nearly 30 countries. Turkey has signed Bilateral Investment Agreements with 86 countries. Since 2005, Turkey has been conducting membership negotiations with the European Union.

What are the Types of Companies in Turkey?

There are various types of companies in Turkey. Let’s get to know these company types more closely:

Joint Stock Company (A.Ş.) in Turkey

It is the largest type of company. At least one partner and partners can establish it has limited liability. Natural and legal persons can be shareholders. As a rule, there is no need for general assembly approval for the transfer of shares. Shareholders may freely transfer their shares to others. Joint stock companies are the only company whose shares can be offered to the public and whose shares can be traded on the stock exchange. The minimum capital amount is 50,000 Turkish Liras. Shareholders must pay at least one-fourth of the nominal value of the shares subscribed in cash before registration. The remaining amount is paid within 24 months following the company’s registration. Joint stock companies have two management bodies: 1) The General Assembly and 2) The Board of Directors. 

Limited Liability Company (Ltd. Şti.) in Turkey

It can be established by a minimum of one and a maximum of 50 partners. The liability of the partners is limited, and the companies’ debts are limited to the capital invested by the partners. Its capital is divided into shares and is registered. The transfer of limited liability company shares is subject to the approval of the general assembly. Limited liability company partners may be natural persons or legal entities. The share capital of a limited liability company is at least 10,000 Turkish Liras. It is possible to pay the entire money brought in cash within 24 months after the company’s registration. Limited liability companies have two management bodies: 1) General Assembly 2) Board of Managers. 

Cooperative Company (Koop. Şti.) in Turkey

Cooperatives are economic organizations created to meet human needs through mutual assistance. Natural or legal persons may establish them. Except for particular types, cooperatives are established with at least seven members. Provided that there is a provision in the articles of association, it may be agreed that the members shall be unlimited second-degree liable to the creditors of the cooperative or limited liability up to a certain amount over the capital share they have subscribed. The board of directors consists of at least three members. The members of the board of directors must be Turkish citizens.

Limited Partnership Company (Kom. Şti.) in Turkey

There are two types of limited partnership companies. 

1) Ordinary limited partnership Company, which is a sole proprietorship.

2) Limited partnership with capital divided into shares, a capital company.

It can be established by at least one commandite partner (unlimited liability) and at least one commanditer partner (limited liability). The limited partner must be a natural person. The commanditer partner can be a natural person or a legal entity. Limited partners need help managing the company.

Collective Company (Kol. Şti.) in Turkey

At least two partners establish it. The liability of the partners is second-degree unlimited, and all partners are equally liable for the company’s debts. Only natural persons can be partners in a collective company. There is no capital requirement. Each company’s partner has the right and duty to manage the company separately. However, management duties may be assigned to one, several, or all of the partners by the company agreement or by the decision of the majority of the partners.

Sole Proprietorship in Turkey

One person can only establish it. Sole proprietorships do not distinguish between personal wealth and business debts. It has no legal personality. There is no capital requirement. For a foreigner to establish a sole proprietorship in Turkey, they must have a five-year residence permit and then apply for an unrestricted work permit. 

The choice of company types depends on the nature of business activities, size, number of partners, and capital requirements. The joint stock company and the limited liability company are the most common types in the global economy and Turkey. In Turkey, approximately 82% of all companies are limited liability companies, 13% are joint stock companies, and 4% are cooperatives. The total number of collective and limited partnership companies is around 1%.

How do Foreign Investors Start a Company in Turkey?

Thanks to Law No. 4875 on Foreign Direct Investors, establishing companies in Turkey by foreign natural and legal persons are subject to the same rules as domestic investors. Therefore, the information we provide for foreign entrepreneurs in the following sections also applies to domestic investors. However, foreigners have advantageous rights in some matters. We can list them as follows:

  • Expropriation or nationalization of foreign direct investments is limited according to this law.
  • Foreign investors can freely transfer their earnings abroad from their activities in Turkey and sales, liquidation and compensation, license, management, and similar agreements.
  • Foreigners starting a company in Turkey can apply to international arbitration for potential legal problems.
  • Turkey is a party to many international agreements protecting the rights of foreign investors.
  • Companies to be established by foreigners are provided with work permit facilities to employ foreign personnel.
  • Regarding non-cash capital, the reports of international value institutions are taken as references.

Company incorporation procedures in Turkey can be completed within an hour if the necessary documents are submitted to the relevant trade registry directorate. The trade registry is kept by the trade registry directorates operating within the chambers of commerce under the supervision and control of the Ministry of Trade. Incorporation procedures are carried out electronically before the Central Registry Registration System (MERSIS). Company incorporation in Turkey is exempt from fees.

Company Establishment Stages

  1. Drafting the articles of association of the company and certifying the signatures of the founders
  2. Sending the minutes and articles of association to the MERSIS system
  3. Preparation and notarization of company documents
  4. Obtaining a potential tax number for the company (available from the Interactive Tax Office)
  5. Preparation of signature declarations of company officials
  6. Depositing a certain percentage of the capital to the account of the Competition Authority
  7. Depositing at least 25% of the founding capital in a bank and documenting this
  8. Application to the Trade Registry Office for registration
  9. Certification of legal books
  10. Requesting the company establishment declaration from the tax office
  11. Preparation of signature circular
  12. Electronification of Certain Documents / E-TUYS System

Documents Required for Foreigners to Start a Company in Turkey

In general, the documents required for foreigners to establish a company in Turkey are as follows:

  • Company contract
  • Copy of shareholders’ passport
  • Certificate of activity of signing authorities
  • Signature declaration
  • Petition for registration of potential tax number, articles of association, lease agreement, power of attorney
  • When applying for registration, establishment notification form, company contract, payment document to the competition authority, declaration of establishment, chamber of the commerce registration form, bank receipt, documents regarding annotations, in-kind capital expert report

Foreign investors may also invest by acquiring shares in a company established in Turkey instead of directly establishing a company. In addition, it is always possible for them to leave the company partnership by transferring the shares they have taken over to others.

Costs for Foreigners to Start a Company in Turkey

The company establishment costs are mainly as follows:

– Consultancy fee if a consultant company is to be established

– Payment to the Competition Authority

– Notary expenses

– Apostilled copies of the required documents

– Minimum capital deposits paid up to at least 25% of the subscribed capital

– Costs related to taxes payable

Foreigners Opening Branches and Liaison Offices in Turkey

Foreigners Opening Branches in Turkey

Without prejudice to the provisions of the laws of their respective countries regarding trade names, branches of commercial enterprises headquartered outside Turkey shall be registered by applying to the relevant trade registry directorate as domestic, commercial enterprises. A fully authorized commercial representative whose domicile is in Turkey shall be appointed for these branches. If the commercial enterprise has more than one branch, the units to be opened after the registration of the first branch shall be registered like the branches of domestic and commercial enterprises.

The general characteristics of branches in Turkey are as follows:

– It is not an independent legal entity. The period of activity is limited to the duration of the parent company.

– There is no shareholder.

– There is no additional capital requirement.

– The branch can only be established for the same purposes as the parent company.

– Branch profits are allowed to be returned to the parent company. Branch profits transferred to the head office are subject to a 15% dividend withholding tax. This tax may be reduced under Double Taxation Avoidance Agreements.

Opening a foreign company branch is more challenging than establishing a foreign company. For this reason, establishing a company from scratch will be easier for the foreign investor both during the establishment phase and afterward.

Foreigners Opening Liaison Offices in Turkey

Companies established under the laws of foreign countries may open a liaison office by obtaining permission from the Ministry of Industry and Technology, provided that they do not engage in commercial activities in Turkey. It is necessary to apply to the Ministry of Industry and Technology General Directorate of Incentive Implementation and Foreign Capital with some documents to open a liaison office. If commercial activity is to be carried out, a company or branch must be opened.

In the first application for liaison offices, permits are issued for the activities declared for a maximum period of three years. Activity periods can be extended by applying to the General Directorate of Foreign Capital. However, this is not definitive. The operating periods of offices authorized to conduct market research or promote the foreign company’s products or services are generally not extended.

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Tax Rates and Incentives in Turkey


Tax Type

Tax Rates

Corporate Tax

23 percent for earnings in 2022,

20 percent for 2023 earnings

Dividend Withholding Tax (Dividend Tax)

10 percent

Income Tax

Between 15 percent and 40 percent according to the progressive tariff

15 percent up to 70,000 TL, 40 percent at 1,900,000 TL and above


Sole proprietorships are subject to income tax.

Value Added Tax (VAT)

It varies according to the sector and product groups.

0 percent, 1 percent, 8 percent, 18 percent


Most products are subject to 18 percent VAT.

Real Estate Tax

The real estate transaction tax is 4 percent of the property value. The tax burden is shared by the buyer and seller.


Real estate taxes differ according to the fair value of the real estate.

Custom Tax

18 percent for products imported from EU countries and 30 percent for products imported from other countries

Turkey has one of the most competitive corporate tax rates among OECD member countries.

As of April 2023, the total cost to the employer of a minimum wage employee in Turkey is TL 11,759.40.

Turkey offers entrepreneurs comprehensive investment incentive programs for new or expansion investment projects. In this way, it supports minimizing start-up costs and accelerating returns on investment. Turkey offers investors support and incentives for R&D and innovation projects and additional employment. It also supports exporters through various grants, incentives, and loans. There is no distinction between domestic and foreign investors in providing these government incentives, support, and grants.

What are the Attractive Sectors for Foreign Investors in Turkey?

Turkey has a dynamic and vibrant domestic market and we can summarize the sectors with attractive opportunities as follows.

Construction Sector: One of Turkey’s most popular topics in recent years is urban transformation projects. Construction is one of the main sectors driving the Turkish economy. More than 1.5 million houses are sold in Turkey every year. Foreigners buy real estate in Turkey for an average of USD 7 billion annually.

Energy and Natural Resources: Turkey plans to invest 130 billion USD in the coming years to close its energy deficit. Turkey offers comprehensive incentives to those investing in energy and natural resources. Some of the incentives available to investors in hydroelectric power, wind energy, solar energy, natural gas, bioenergy, and geothermal energy are as follows:

  • Tax Reduction (40%)
  • VAT Exemption
  • SSI Premium Employer’s Share (7 Years)
  • Customs Exemption

Infrastructure and Transportation:
 The total targeted length of highways in Turkey by 2035 is 8,200 km. Railways are another area of investment and development. The railways’ share in Turkey’s infrastructure investment budget by 2023 is 60 percent. Between 1986 and 2022, the number of Public-Private Partnership contracts in Turkey amounted to 262, totaling USD 184 billion.

Tourism: More than 30 million tourists visit Turkey every year. Turkey is rich in natural, cultural, and historical beauty. Four seasons can be experienced at the same time. Antalya is the capital of tourism. In addition, health tourism has been one of the most developing fields in Turkey in recent years due to its advanced and cost-effective health system. 

Information Technologies: The market value of information technologies in Turkey is more than 30 billion USD. The sector’s growth rate in the last five years is around 25 percent. 200,000+ people work in 1200+ R&D centers in Turkey.

Chemistry: Turkey ranks 2nd in Europe and 7th worldwide in global plastics production. It ranks 5th in Europe in paint production. After China, Turkey imports the most polypropylene in the world.

Where Should I Start to Do Business in Turkey?

First of all, you should create a business plan. For this purpose, visiting Turkey and making business contacts with a local partner is beneficial.

Clarify your strategic goals and objectives within your business plan for at least three years. Determine your vision, the sector you will operate in, and your business details. You create your investment budget.

The next step after the research and planning phase is to take action. The lowest risk and cost strategy in a foreign market is to move forward through partners or consultants who know the Turkish market well.

As MHR & Partners, we have provided certified public accountancy services in Turkey for 10+ years. With the experience and confidence of knowing the Turkish market well, we can advise you on setting up a company from scratch or acquiring an existing company. After the establishment, we provide tax audit and tax consultancy services.

What Can We Do For You?

Your Tax Advisor in Turkey


Years Experience

As MHR & Partners, we serve our clients in more than ten countries in the European region, especially in Turkey. The main topics of our consultancy services are company formation, tax audit, tax consultancy, and accounting services.

We prioritize contributing to companies with growth vision and business strategy in Turkey and Europe. We pay special attention to continuing our support with the assurance of MHR & Partners after the company establishment stages. Our core mission is to be a safe harbor and provide sustainable services.

We want to be a bridge to our entrepreneurs’ business plans for growth and development, even in the remotest parts of the world.

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Let Us Help You

Easy accessibility and open communication are the basic principles of our company.

For information and offers on starting a company in Turkey, you can send me an e-mail or call me during office hours (weekdays from 9:00 to 18:00) at the company phone number below.

+90 542 208 5308


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