Starting a Business in Turkey: Your Comprehensive Guide

Hire Now Talent Team
Updated on

Turkey’s strategic location between Europe and Asia attracts entrepreneurs and foreign investors. Its booming economy and young, dynamic population further enhance its appeal. This guide covers starting a business in Turkey, including legal structures and registration. It also addresses taxation and practical considerations.

A detailed business plan with Turkish landmarks in the background.

Why Choose Turkey for Your Business?

Strategic Location: Your Gateway to Global Markets

Turkey’s location between Europe and Asia makes it a hub for international trade. Businesses in Turkey have easy access to major markets in Europe and Asia. This allows them to reach a vast consumer base and supply chain network. Turkey’s advanced transportation infrastructure facilitates efficient movement of goods and services.

Growing Economy: A Land of Opportunities

Turkey’s economy has surged, driven by manufacturing, construction, tourism, and agriculture. Turkey’s industrial base, growing middle class, and rising consumer demand support business expansion. The government’s economic reform commitment and infrastructure investment solidify Turkey’s rising economic position.

Young Population: A Dynamic and Skilled Workforce

Turkey’s youthful population, with a median age of 32, is a valuable asset for businesses. This tech-savvy generation excels with lightning speed.

Many graduates in important fields show their ability to adapt. Investing in Turkey means accessing a motivated and skilled workforce. They are eager to contribute to your company’s growth.

Government Incentives: Your Partner in Growth

The Turkish government values foreign investment and offers programs to attract international businesses. These incentives include tax breaks, reduced customs duties, and streamlined administrative procedures. Additionally, the government promotes free trade agreements. It encourages public-private partnerships, fostering a favorable business environment.

Cultural Richness: An Inspiring and Creative Atmosphere

Turkey’s rich cultural heritage blends Eastern and Western influences. This offers a unique backdrop for businesses. The country’s historical landmarks provide a sense of heritage.Its diverse culinary traditions offer a unique culinary experience.

Artistic expressions contribute to a vibrant cultural atmosphere. This fosters creativity and innovation. Exploring Turkey’s rich culture offers insights that can enhance business strategies and products.

  • Turkey’s strategic location benefits businesses. Its growing economy offers ample opportunities. The skilled workforce is an asset. Incentives further enhance the business environment. Rich cultural heritage adds to the appeal.
  • Turkey is an ideal location for startups and established companies alike. It offers abundant opportunities for growth and success.

Legal Structures for Businesses in Turkey: Choosing the Right Fit

Choosing the right legal structure is crucial for your business. It shapes operations, ownership, and liability. Here’s a closer look at the common options:

Limited Liability Company (LLC – Limited Şirket):

  • Flexibility and Simplicity: The LLC is popular among local entrepreneurs. Foreign entrepreneurs, especially SMEs, also favor this legal structure. It offers a simple structure with one shareholder and one director, who can be the same person.
  • Limited Liability: Shareholders limit their liability to their capital contribution. This protection safeguards personal assets from business debts.
  • Taxation: LLCs are subject to corporate income tax on their profits. They gain tax incentives and deductions based on their industry. Location also affects these advantages. This depends on their industry and location.
  • Management: Shareholders appoint a director or board to manage the company.
  • Ownership: Shares represent ownership and are transferable.

Joint Stock Company (JSC – Anonim Şirket):

  • Raising Capital: The JSC suits larger businesses or those seeking public investment. It allows for the issuance of shares to the public, making it easier to raise capital.
  • Corporate Governance: JSCs have a board of directors and an oversight board.
  • Requirements: A JSC needs at least five shareholders and a board of directors.
  • Liability: Shareholders limit their liability to their share capital.
  • Taxation: JSCs pay corporate income tax and may face capital gains tax on share sales.

Branch Office (Şube):

  • Extension of a Foreign Company: A Turkish branch mirrors its foreign parent’s activities.
  • Liability: The parent company is liable for the branch office’s debts and obligations.
  • Taxation: Turkey taxes branch offices based on the profits they generate.
  • Registration: Establishing a branch requires registration and permits.

Liaison Office (İrtibat Bürosu):

  • Representation: A liaison office represents a foreign company in Turkey.
  • Non-Commercial Activities: Liaison offices cannot engage in commercial activities and generate income. Their main tasks are promoting products/services, doing market research, and gathering info.
  • Taxation: Liaison offices don’t pay corporate income tax because they don’t earn income.
  • Registration: Registering a liaison office is simpler than a branch office.

Choosing the Right Structure:

The legal structure depends on size, nature, ownership, growth plans, and liability protection. Consulting legal and financial pros is crucial to find your best fit.

Less common structures include cooperatives (Kooperatif) and sole partnerships (Şahıs İşletmesi). Each has its own advantages and drawbacks.

Understanding Turkey’s legal structures helps you make informed decisions for business success. Check [link] for official info on company types in Turkey.

A step-by-step guide with Turkish paperwork and regulatory documents.

Steps to Start a Business in Turkey

  1. Company Name Reservation: Reserve your desired company name at the Trade Registry Office.
  2. Articles of Association Preparation: Draft company articles outlining its purpose, structure, and principles.
  3. Capital Deposit: Deposit the required share capital in a Turkish bank.
  4. Registration at the Trade Registry Office: Submit documents to the Trade Registry Office. These may include articles of association and a bank receipt.
  5. Tax Registration: Get a tax number from the local tax office.
  6. Get Other Permits and Licenses (if applicable): Activities might need more permits.
  7. Open a Bank Account: Open a corporate bank account for your business operations.

Taxation in Turkey

  • Corporate Income Tax: The standard corporate income tax rate is 25%.
  • Value Added Tax (VAT): The standard VAT rate stands at 20%.
  • Other Taxes: Depending on your business activities, you may also face other taxes. These can include withholding tax, stamp duty, and property tax.

Tax Exemptions and Incentives in Turkey: Fueling Your Business Growth

Turkey provides tax exemptions and incentives for foreign investment. Incentives can cut your tax burden and boost earnings. Here are some key areas where you might find tax benefits:

  • Research and Development (R&D) Activities: R&D companies get lower corporate tax rates. They may also qualify for exemptions on certain expenses.
  • Technological Development Zones: Special zones offer tax exemptions. These incentives aim to attract businesses and promote economic growth in designated areas.
  • Investment Incentives: The Turkish government provides investment incentives for specific sectors and regions. These include lower corporate tax rates, duty exemptions, and investment allowances.
  • Free Trade Zones: Free trade zone companies have tax exemptions on imports.
  • Regional Incentives: Certain Turkish regions offer extra tax perks for development.

Tax rules change; check with experts or agencies for updates. Determine your entitlement for specific exemptions through these consultations.

Leverage tax perks to cut costs and speed up business growth in Turkey.

Practical Considerations

  • Business Culture: Familiarize yourself with Turkish business customs and etiquette. Building relationships and trust are crucial.
  • Language: Businesses use English, but learning Turkish can aid networking and communication. It offers advantages in local interactions and cultural understanding.
  • Location: Choose your business location based on your industry and target market. Major cities like Istanbul, Ankara, and Izmir offer diverse opportunities.
  • Networking: Go to events to meet partners, clients, and suppliers.
  • Legal and Accounting Support: Get advice from Turkish law and tax experts.

Foreign Investors and Residency Permits

Turkey welcomes foreign investors and offers various visa and residency permit options. Foreign investors meeting specific criteria can get a permit in Turkey. This allows them to live and work in the country.

Key Takeaways

  • Starting a business in Turkey is rewarding for locals and foreigners.
  • Plan, grasp the laws, and seek professional advice for success.
  • Leverage Turkey’s location, economy, and policies to thrive.

Remember: This guide provides an overview of the process. Consult experts for tailored business advice.

Contact Hire Now Talent for your company’s establishment in Turkey. We offer top-notch service in this area.