Investment Guide For Foreign Investors In Turkey


Turkey has been a good alternative for investors in recent years with its geographical, economic and demographic structure. Current economic policies are shaped around the promotion and support of foreign investment. In this context, many innovations have been made in the foreign investment legislation that make investment attractive in Turkey and make the investor’s job easier.

Thanks to the economic and legal revision, the foreign investors can complete almost all their business remotely by appointing a proxy in Turkey without having to come to Turkey personally. They can do some processing steps online over the internet. They can set up a business in Turkey in a shorter time and with less expense without having to travel many times and deal with bureaucratic procedures.

1)   What Are The Investments A Foreign Investor Can Make In Turkey?

There are many options for investors who want to invest in Turkey. Different investment opportunities are recommended according to the way the investor arrives in Turkey. If the investor comes as a real person, he/she:

  • Can be a partner in a company established in Turkey as a real person,
  • Can become a partner by taking over the shares of a company established in Turkey,
  • Can buy real estate,
  • Can make fixed capital investment,
  • Can buy securities.

If the investor comes as a legal person, he/she:

  • Can establish a new company,
  • Can open a branch,
  • Can open a liaison office,
  • Can become a partner in a company in Turkey through his/her company established abroad.

The most advantageous type of investment should be determined according to the expectations and wishes of the investor, aiming to get the maximum yield at the minimum cost.

2)   Establishing A Company In Turkey

A foreign investor can establish any of the types of companies specified in the Turkish Commercial Code in Turkey. The investor is completely free to do business in the sector he/she wants and by creating the kind of company he/she wants. All existing restrictions on the line of business and field of activity for foreigners have been removed.

There are two types of companies in Turkish commercial law; equity companies and sole proprietorships. Capital companies are; joint stock companies, limited companies, limited partnership companies and cooperatives. Sole proprietorships, on the other hand, are ordinary companies, general partnerships and limited partnerships.

Capital companies are corporate structures. The most preferred types are joint stock and limited liability companies. In these companies, company partners are in a safer position against company debtors; because partners have no liability for company debts. In capital companies, the partners are only obliged to pay the amount of capital they have committed to put into the company.

Sole proprietorships, on the other hand, are companies where personal relations are at the forefront, not corporate. It is not mandatory to put up capital to set up a sole proprietorship. The important thing is to establish a partnership relationship between at least two people.

1) Joint Stock Company                                                  1) Collective Company

2) Limited Liability Company                                          2) Ordinary Limited Partnership

3) Shared Limited Partnership                                        3) Ordinary Company


To briefly mention the general characteristics of the most preferred company types:

2.1) Joint Stock Company

  • A joint stock company is a type of capital company with a legal personality, whose capital is determined and divided into shares.
  • They can be established with two types of capital systems: with original capital and with registered capital. In a joint stock company with original capital, the capital is at least 50,000 Turkish liras. If the registered capital system is adopted, it is possible to establish a joint stock company in Turkey with at least 100,000 Turkish liras.
  • Each share has an economic value. As a result of multiplying these economic values expressed by shares by the number of shares, the company’s capital is found. The founders determine how many shares will be in the company. Shares can be issued to stakeholders for shares.
  • A joint stock company can be established with one or multiple partners. There are two types: closed and public joint stock company. Closed joint stock companies are joint stock companies with a small number of partners. In public joint stock companies, the number of partners is high. Apart from business owners, there is a group that is involved in the company for investment purposes. There is no upper limit on the number of partners. However, joint stock companies with more than 500 partners are considered to be offered to the public by law. This means that company shares can be traded on Borsa Istanbul and will be subject to the Capital Markets Law.
  • Company partners have a share in the company at the rate of the value they bring to the capital. In other words, having a share in the company means being a partner in the company. Partners earn dividends from the profit received in the measure of their share.
  • Joint stock companies can be established for any economic purpose and subject not prohibited by law. In Turkish law, it is obligatory to establish a joint stock company in order to do business in some branches of activity. Banking, insurance, brokerage houses and investment partnerships, financial leasing companies, public stores, financing and factoring companies must be established as joint stock companies.
  • The company is only responsible for the debts of the company limited to its own assets.
  • Partners are not liable for company debts. The partners of the company are only obliged to pay the amount of capital they have committed to put in the establishment phase against the legal entity of the company. The partner who pays the capital investment debt does not have any responsibility for the debts of the company.
  • In joint stock companies, investors are only at risk of losing the capital they have committed to.

2.2) Limited Liability Company

  • Another type of capital company with legal personality that can be established by one or more real or legal persons is a limited liability company.
  • The number of partners cannot exceed 50.
  • Its capital is specified in the articles of association. Capital refers to the total value of shares. It is possible to establish a limited liability company with at least 10,000 Turkish liras.
  • A limited company can be established for any purpose and subject that is not prohibited by law.
  • Partners are not liable for company debts. The partner, who fulfills the capital share and additional payment obligation that he/she has committed to pay to the company at the establishment of the company, is not responsible for the company’s debts. The company’s creditors can only apply to the company’s assets for their receivables. The company is responsible for all debts limited only to its assets.
  • Shares cannot be issued as negotiable instruments for limited company shares. The only company type in Turkey that can issue securities in the name of its shares is a joint stock company.

2.3) Collective Company

  • It is a sole proprietorship and has legal personality.
  • Only natural persons can establish a collective company. It is established by the partnership of at least two natural people.
  • Company assets are primarily responsible for company debts. For debts whose assets cannot meet, each of the partners is unlimitedly liable for all of these debts with their own assets.
  • There is no minimum amount of capital to be brought into the company.

2.4) Limited Partnership

  • It can be established by at least two people, one active and one dormant. Active partners are natural persons; dormant partners can be natural or legal persons.
  • This separation of partners was made according to the principles of liability for debts. The active partner is the partner with unlimited liability for the debts of the company and with all his/her assets, and the dormant partner is the partner with limited liability for the debts.
  • There are two types as ordinary limited and shared limited.

2.5) Ordinary Company

  • An ordinary company is the simplest type of company. It has no legal entity.
  • It can be established with at least two partners.
  • There is no minimum amount of capital to be brought.
  • Since the company does not have an independent personality separate from the partners, all the partners jointly own the assets of the company.
  • Each of the partners is responsible for all debts of the company with their own assets and unlimitedly.
  • No procedure is required for the establishment of the company, even verbal understanding is sufficient.

2.4) Joint Venture

  • Joint ventures are contractual relationships frequently used by companies while integrating into foreign markets. In international trade, companies can also sell manufactured goods and services in other countries through joint venture contracts.
  • They can be established by two or more natural or legal persons.
  • There is no minimum capital required to be invested in the company.
  • When entering a new market, companies seem to prefer these structures, called joint ventures, for purposes such as sharing risks and receiving technical or technological support.
  • Each of the companies establishing joint ventures creates a new company by maintaining their own autonomous structure. Although the companies continue to be independent of each other, they are jointly responsible for all debts of this newly formed company.
  • It is subject to the provisions of the ordinary company.
  • It is possible to establish a limited joint venture for a certain purpose or for a certain period of time.
  • It can be established as a contractual joint venture and a capital-based joint venture.
  • They are quite easy to establish and there are no special procedures. A simple contract is enough.

3)   Company Establishment Procedures

A foreign investor does not need to obtain permission or approval from any authority to establish a company. E-TUYS (Electronic Incentive Application and Foreign Capital Information System) is sufficient to inform the General Directorate of Incentive Implementation and Foreign Capital by forwarding the company information online. Capital, share transfer and activity information reports can be sent via e-TUYS. Apart from this, the company must fulfill the necessary procedure for its establishment.

Company establishment procedures in Turkey are carried out through the central registration system called MERSIS. The foreign investor must first obtain a tax number from the tax office for transactions. A foreign investor can be identified as a partner or official of the company with a passport number. Then, he/she should apply to the Trade Registry Office and request to be defined as a user in the MERSIS system.

Articles of association is prepared in Turkish, in MERSIS. The potential identification number of the company is also issued automatically through this system.

The establishment of joint-stock, limited liability, limited and collective companies is carried out by the registration process to be made in the Trade Registry Offices within the Chambers of Commerce. To establish a company in Turkey:

  • Articles of association should be prepared and the title, subject, headquarters, managers, capital and shares of the company should be determined in the contract.
  • The contract is signed by the partners or the representatives assigned by the notary public, and these signatures are certified by the notary public.
  • Apostille annotation of all documents issued abroad is taken and approved by notaries or consulates.
  • The signatures of the persons authorized to sign on behalf of the company title are approved by the trade registry directorates.
  • At least 1/4 of the capital committed in joint stock companies with the share of the competition institution is deposited in a bank account opened in the name of the company.
  • All approved documents and contracts must be registered in MERSIS, the electronic database of the Trade Registry Office.
  • In the last step, a request is made to the Trade Registry Office for the company to be registered in the trade registry.

With the registration process, the company is officially established.

After that, transactions such as the approval of the commercial books and the receipt of the tax plate are completed.

Depending on whether the foreign investor is a natural or legal person, the documents and transactions required during and after the establishment varies.

For Foreign Investor Real Person Establishing a Company:

In order for the foreign investor to establish a company in Turkey or to take over the shares of the Turkish company, in addition to the above, a translated notarized copy of the passport and potential tax number must be submitted. He/she should also open a bank account on the potential tax number.

If a natural person is going to establish a sole proprietorship (such as a collective, joint venture or ordinary company), he must also obtain a work permit. After 5 years of residence with a residence permit, he/she must apply for a work permit and obtain a positive result at the end of 5 years.

Members of the board of directors of a joint stock company who do not reside in Turkey and foreign partners of limited liability companies who are not authorized do not have to obtain a work permit.

For Foreign Investor Legal Entity Establishment Transactions:

In addition to the company establishment documents listed above, the investor legal entity must also submit the original and notarized translation of the apostille annotated activity certificate issued by the chamber of industry or commerce, consulate or courts where the company is registered.

4) Investment By A Foreign Investor Through Taking Over The Shares

It is also possible for a foreign investor to invest by taking over the shares of an existing company instead of creating a new company in Turkey. For taking over the shares, the investor is required to submit a translated notarized copy of passport, potential tax number.

Since registered and bearer share certificates can be printed in joint stock companies, the transfer of shares is possible with the transfer of the certificates and clearing of accounts. The transfer of shares in joint stock companies is free and cannot be limited.

In limited companies, in order for the shares to be transferred, all old and new partners must sign the transfer agreement and this agreement must be approved by the notary public and the general assembly of the company. The share transfer agreement and the approval of the general assembly must be registered and announced.

5)   Opening A Branch Of A Foreign Company In Turkey

  • A foreign investor company may also consider evaluating its investment by opening a branch in Turkey. Branches are established under the parent company and limited to its field of activity and duration.
  • They do not have an independent personality.
  • There is no minimum capital requirement to establish a branch.
  • Branches must be registered in the trade register, just like companies. For this, you must apply to the Trade Registry Office with the necessary documents.
  • It is possible to return the profit of the branch to the parent company. Although the branch profit sent to the head office is subject to 15% dividend withholding tax, this rate may decrease with double taxation agreements.

6)   Establishment Of A Liaison Office In Turkey For A Foreign Company

  • Laison offices can be established in Turkey only for the purpose of conducting market and feasibility studies. They cannot engage in commercial activity.
  • It is obligatory to obtain permission from the Ministry of Industry and Technology to establish a liaison office.
  • In the application for the liaison office, a maximum of 3 years of activity is determined. Offices wishing to continue their activities at the end of 3 years must apply to the Ministry of Industry and Technology, General Directorate of Incentive Practice and Foreign Capital.

7)   Which Currency Can The Investor Use?

  • It is possible for the foreign investor to use foreign currency in Turkey’s sales, lease, employment, license, consultancy and service contracts including brokerage, air transportation contracts and contracts signed with public institutions.
  • Again, it is possible for foreigners to conclude employment and service contracts in foreign currency on branches, representative offices, liaison offices, companies in which they directly or indirectly hold 50% or more shares or have joint control or companies over which it has control are employers or service recipients.

8)   Work Permit For Foreign Investors

The first of the requirements that an investor who makes an investment in the form of establishing a company in Turkey or becoming a partner in an established company by purchasing shares is undoubtedly the work permit he/she must obtain for him/herself and his/her foreign employees. The work permits to be obtained by a foreigner who establishes a company in Turkey or becomes a partner in a Turkish company, differ from the general regulations regarding work permits in Turkish law.

A foreign investor must obtain a work permit to operate in Turkey through a company established in Turkey or a company in which he/she is a partner by taking over shares. In order to obtain a work permit, first of all, it should be determined whether the investment made by the foreigner is within the scope of Special Foreign Investment. If there is an investment that can be categorized in this class, it is determined whether the personnel requesting work permit are key personnel. If a work permit is to be obtained for key personnel, this procedure is regulated in the Regulation on Employment of Foreign Personnel in Foreign Direct Investments.

In non-specific foreign investments, obtaining work permits of foreign company partners is subject to the provisions of the International Labor Law and the Implementation Regulation of the Law on Work Permits of Foreigners. For this purpose, it is necessary to provide a number of investment or workplace criteria.









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