Invest CPA Ltd. Turkey

Quality CPA & CFO Advisory Services in Turkey

Opportunities for Establishing a Company in Turkey

Unlocking Business Potential: Opportunities for Establishing a Company in Turkey

Turkey, strategically positioned at the crossroads of Europe, Asia, and the Middle East, presents a unique and promising environment for foreign investors. As a dynamic economy with a youthful population, a diversified industrial base, and an increasingly business-friendly climate, Turkey offers substantial opportunities for those looking to establish a company. This article will explore the benefits, legal structures, and key sectors that make Turkey an attractive destination for investment.

Why Invest in Turkey?

  1. Strategic Location
    Turkey’s geographic position offers direct access to markets in Europe, the Middle East, North Africa, and Central Asia. This strategic location is complemented by an extensive transportation network, including modern seaports, railways, and highways, facilitating efficient logistics and trade operations. For companies looking to expand their global reach, Turkey serves as a gateway to a market of over 1.5 billion people.
  2. Growing Economy
    Turkey is one of the world’s largest economies, with a GDP exceeding $800 billion. Despite global economic uncertainties, Turkey’s economy has shown resilience, driven by its strong manufacturing base, robust consumer market, and government reforms aimed at enhancing the business environment. The country’s young and tech-savvy population, with a median age of 32, provides a dynamic workforce that is crucial for sustaining growth in sectors like technology, manufacturing, and services.
  3. Business-Friendly Environment
    Over the past decade, Turkey has implemented significant reforms to improve the ease of doing business. The World Bank’s Ease of Doing Business Index consistently ranks Turkey favorably in areas such as starting a business, dealing with construction permits, and protecting minority investors. The government offers various incentives, including tax reductions, exemptions, and subsidies, to encourage foreign direct investment (FDI). Additionally, the digitalization of many bureaucratic processes has made it easier and faster to establish and operate a business in Turkey.
  4. Investment Incentives
    Turkey’s investment incentives are designed to support different sectors and regions. These incentives include corporate tax reductions, VAT exemptions, customs duty exemptions, and social security premium support. The incentives are structured across different categories, such as general, regional, strategic, and project-based incentives, each tailored to promote investment in specific areas and industries. Furthermore, Turkey’s network of free zones offers additional advantages, including exemption from corporate tax and VAT on goods traded within the zones.

Legal Structures for Setting Up a Company in Turkey

When establishing a company in Turkey, foreign investors can choose from several legal structures. The most common types are:

  1. Limited Liability Company (LLC)
    The Limited Liability Company (LLC) is the most popular legal entity for foreign investors in Turkey. An LLC requires a minimum of one shareholder and a minimum capital of 10,000 TRY. The liability of shareholders is limited to their capital contribution, making it a relatively low-risk option. LLCs are subject to Turkish Corporate Tax, currently set at 20%, and must comply with Turkish Commercial Code and Turkish GAAP for financial reporting.
  2. Joint Stock Company (JSC)
    A Joint Stock Company (JSC) is suitable for larger investments, particularly when planning to issue shares publicly or engage in significant commercial activities. A JSC requires a minimum of one shareholder and a minimum capital of 50,000 TRY. Like LLCs, the liability of shareholders in a JSC is limited to their capital contributions. JSCs are subject to the same tax obligations as LLCs but offer more flexibility in terms of raising capital through the issuance of shares.
  3. Branch Office
    Foreign companies can establish a branch office in Turkey, which is an extension of the parent company and not a separate legal entity. While branch offices can carry out commercial activities, they do not have their legal personality, meaning that the parent company is fully liable for the branch’s obligations. Branch offices are taxed on their Turkish-sourced income.
  4. Liaison Office
    A liaison office is ideal for foreign companies that wish to explore the Turkish market or oversee their operations in Turkey without engaging in direct commercial activities. Liaison offices are not permitted to conduct business transactions and are exempt from corporate tax. However, they provide a cost-effective way to establish a presence in Turkey and gather market intelligence.

Key Sectors for Investment

  1. Manufacturing
    Turkey has a well-established manufacturing base, producing everything from automobiles to electronics. The country is a major exporter of automotive parts, machinery, textiles, and consumer electronics. Foreign investors can tap into Turkey’s advanced manufacturing infrastructure, skilled labor force, and access to key export markets.
  2. Technology and Innovation
    Turkey’s technology sector is rapidly growing, driven by a young and tech-savvy population. The country has become a hub for startups and innovation, particularly in fintech, e-commerce, and software development. The government supports tech investments through various initiatives, including tax incentives, grants, and technology development zones (TDZs) that provide infrastructure and R&D support.
  3. Renewable Energy
    With its abundant natural resources, Turkey is focusing on expanding its renewable energy capacity. The country aims to increase the share of renewables in its energy mix, creating opportunities for investment in solar, wind, hydroelectric, and geothermal energy projects. The government offers feed-in tariffs, purchase guarantees, and other incentives to attract investment in the renewable energy sector.
  4. Tourism and Real Estate
    Turkey is one of the world’s top tourist destinations, known for its rich cultural heritage, stunning landscapes, and vibrant cities. The tourism sector offers lucrative opportunities for investment in hotels, resorts, and tourism-related infrastructure. Additionally, the real estate market is booming, with demand driven by both domestic and foreign buyers. The government’s citizenship-by-investment program, which grants Turkish citizenship to foreigners who invest in real estate, has further fueled demand.

Conclusion

Establishing a company in Turkey offers numerous opportunities for foreign investors, driven by the country’s strategic location, growing economy, and supportive business environment. With a variety of legal structures to choose from and attractive incentives across multiple sectors, Turkey is a promising destination for those looking to expand their business operations. As the country continues to modernize its economy and infrastructure, the potential for investment will only grow, making now an ideal time to explore the possibilities that Turkey has to offer.

[OUR SERVICES] Comprehensive Support for Establishing a Company in Turkey

Starting a business in Turkey involves a series of important steps, from selecting the right company structure to complying with local regulations and preparing the necessary documentation. Our services are tailored to guide foreign investors through every stage of company establishment, ensuring a smooth and compliant process that positions your business for success in Turkey.

  • Guidance on choosing the most suitable company structure (e.g., Limited Liability Company or Joint Stock Company)
  • Assistance with preparing and filing required legal documents, including the Articles of Association
  • Support with tax registration, obtaining a Turkish Tax Identification Number, and setting up your initial accounting records
  • Advisory on selecting an office location that aligns with your business strategy and market accessibility
  • Training for your team on Turkish regulatory requirements and operational practices

Contact us to start your business journey in Turkey with confidence and a strategic foundation.

FAQ

1. What are the benefits of establishing a company in Turkey?

Turkey offers a strategic location between Europe, Asia, and the Middle East, making it an ideal hub for international trade. Investors benefit from a young, skilled workforce, various tax incentives, and free trade agreements. Additionally, Turkey’s large domestic market provides significant growth potential.

2. What is the minimum capital required to start a company in Turkey?

The minimum capital requirement to establish a limited liability company (LLC) in Turkey is 50,000 TRY. For joint-stock companies (JSC), the minimum capital is 250,000 TRY. These amounts may vary depending on the business type and sector.

3. What incentives are available for foreign investors in Turkey?

Foreign investors in Turkey can benefit from various incentives, including tax exemptions, customs duty exemptions, and VAT exemptions. Specific sectors, like technology, renewable energy, and manufacturing, may also qualify for additional incentives, such as R&D support and land allocation.

4. Can a foreigner own 100% of a company in Turkey?

Yes, foreign investors can own 100% of a company in Turkey. There are no restrictions on foreign ownership in most sectors, allowing full control of the business. However, certain regulated industries may have specific requirements or limitations.

5. How long does it take to establish a company in Turkey?

Establishing a company in Turkey typically takes 5 to 7 days once all necessary documentation is prepared and submitted. The process involves registering with the Trade Registry Office, obtaining a tax number, and opening a bank account, among other steps.