Frequently Asked Questions About Foreigners Establishing Companies in Turkey

How can foreigners establish a company in Turkey?
What documents are required for foreigners to establish a company in Turkey?
How long does the foreign company establishment process take in Turkey?
Can a foreign individual establish a company alone in Turkey?
Is a work permit required for foreigners to establish a company in Turkey?
Can foreign company partners obtain a residence permit in Turkey?
What types of companies can foreigners establish in Turkey?
Which is more suitable for foreign investors: limited company or joint-stock company?
What is the capital requirement for foreign partner companies in Turkey?
Are there tax advantages for foreigners establishing a company in Turkey?
Are incentives provided for foreigners establishing companies in Turkey?
In which sectors can foreign partner companies operate in Turkey?
Are some sectors closed to foreign investors in Turkey?
What challenges do foreigners face when establishing a company in Turkey?
Can a foreigner who establishes a company in Turkey open a workplace?
How costly is it for foreigners to establish a company in Turkey?
Is it mandatory for foreign company founders to open a bank account?
Is attorney support mandatory for foreign company establishment in Turkey?
When can foreigners who establish a company in Turkey start their activities?
Can I obtain consultancy services regarding foreigners establishing companies in Turkey?

Legal Basis and Regulations for Foreigners Establishing Companies in Turkey

To which legal regulations is the establishment of companies by foreigners in Turkey subject?

Turkey offers a liberal, competitive investment environment open to foreign investors, and the processes for foreigners to establish companies are explicitly regulated both in the Constitution and in specific laws and regulations. The primary legal basis for foreigners establishing companies in Turkey is the Law No. 4875 on Direct Foreign Investments. This law guarantees that foreign investors shall have equal rights with domestic investors in Turkey and that investment activities are free.

In addition to this fundamental law, detailed provisions on the company establishment process and operation are regulated under the Turkish Commercial Code. Foreigners wishing to establish companies in Turkey may found various types of commercial companies such as joint-stock companies (A.Ş.), limited liability companies (LTD), and collective companies within the scope of Law No. 6102 Turkish Commercial Code. However, the most preferred forms are capital companies, namely joint-stock and limited liability companies.

Moreover, Law No. 6735 on International Workforce regulates the principles of permits and exemptions for foreigners to work in Turkey after establishing a company. If a foreign entrepreneur intends to work in their company after establishment, they generally must obtain a work permit. These permits are administered by the Ministry of Labor and Social Security, and working without a permit can result in serious administrative sanctions.

Although foreigners are not required to be physically present in Turkey to establish a company, it is strongly recommended to obtain support from an İzmir foreigners law attorney or İzmir foreign company attorney to accelerate the establishment process, ensure applications are made correctly within the legal framework, and prepare documents completely. Especially for investors coming from certain countries, there may be special exemptions or advantages within the scope of bilateral agreements Turkey has signed. Legal consultancy at this point can provide strategic benefits.

Additionally, communiqués and regulations issued by the Central Bank of the Republic of Turkey and the Ministry of Trade are especially important in terms of capital transfers and foreign exchange transactions. Foreign natural or legal persons investing in Turkey must bring their investment capital in foreign currency to Turkey and document this process through banks, which is a critical step for legal compliance.

The right of foreigners to establish companies is also evaluated within the scope of "freedom of contract" and "property rights," secured by Article 48 of the 1982 Constitution. However, this freedom may be restricted due to reasons of public order, public security, and national security. Therefore, it is essential to evaluate whether the sector targeted for investment is considered "strategic" during the company establishment process.

It is essential that foreigners wishing to establish companies in Turkey act fully compliant within the legal framework to ensure the validity of their transactions and to prevent possible legal issues in the future.

Conditions and Legal Process for Foreigners to Establish Companies in Turkey

What conditions must foreigners fulfill to establish a company in Turkey?

There is no requirement for a foreigner to be a Turkish citizen in order to establish a company in Turkey. Citizens of any country may directly or indirectly establish a company or become partners in an existing company in Turkey. However, to ensure this process proceeds smoothly and legally, it is important that certain conditions are met and that transactions are carried out with professional support.

1. Legal Representative or Founder Qualification

Foreign natural or legal persons may establish companies in Turkey directly or through a representative or attorney. Applications made through a proxy acting with a power of attorney tend to be processed faster. At this point, working with an experienced İzmir foreign investment attorney or İzmir foreign company attorney is highly beneficial.

2. Trade Registry Application and Documents

The establishment procedures start electronically through MERSİS (Central Registry Record System) and are finalized at the Trade Registry Office. Required documents include:

Articles of association (prepared via MERSİS and notarized),
Notarized Turkish translations of partners’ passports,
Signature declaration,
Residence declaration,
Lease contract or title deed for the company address,
Establishment declaration and application form,
Power of attorney if necessary.

As of 2025, the current capital requirements:

Limited Company: Minimum capital is 50,000 TRY. It is not mandatory to deposit at the establishment stage but must be completed within 24 months.
Joint-Stock Company: Minimum capital is 250,000 TRY. At least 25% must be deposited into a bank account during establishment, and the remainder within 24 months.

A higher capital amount increases the investor’s credibility in Turkey and can positively affect eligibility for some incentives.

4. Tax Office Registration and Financial Consultancy

After establishment, registration must be done at the tax office, a potential tax identification number must be obtained, and book certification processes must be completed. Also, a contract with a financial advisor must be made to ensure tax declarations are filed within legal deadlines.

Social Security Institution (SGK) workplace notification must be made for the business location where the company will operate, and if necessary, insured employment registrations for employees must be initiated. The address information must be accurate and verified with official documents during the establishment phase.

6. Work and Residence Permit Process

If the foreign company founder, manager, or partner will work in Turkey effectively, they must obtain a work permit. Applications are submitted via the Ministry of Labor and Social Security’s system. Generally, the following conditions are required:

Employing at least 5 Turkish citizens,
The foreign partner must hold at least 20% of the shares and have a capital share of at least 50,000 TRY.

A foreigner who obtains a work permit can also receive a residence permit.

7. Legal Restrictions and Exceptions

Certain sectors in Turkey are closed to foreign investors or require special prior permits. For example, there are restrictions in sectors sensitive to national security, mining, and radio-television broadcasting. Also, real estate acquisition and agricultural land purchase in some provinces are subject to special permissions.

Types of Companies That Can Be Established in Turkey and Suitable Options for Foreigners

Which company types can foreign investors establish in Turkey?

Foreign investors wishing to establish companies in Turkey may choose among various company types under the Turkish Commercial Code and related regulations. In practice, the two most preferred types are Limited Company (Ltd. Şti.) and Joint-Stock Company (A.Ş.), which are more flexible and advantageous regarding taxation and investment processes.

1. Limited Company (Ltd. Şti.)

The limited company is the most preferred type among domestic and foreign entrepreneurs in Turkey because the establishment procedures are easier and costs are lower.

Features:

Can be established with at least 1 and up to 50 partners,
Partners may be natural or legal persons,
Partners’ liability is limited to their capital shares,
Minimum capital is 50,000 TRY,
General assembly and audit obligations are lighter,
Share transfers must be notarized and registered with the trade registry.

This company type is quite suitable for small and medium-sized investments. Particularly with support from an İzmir foreign company attorney, the establishment process can be completed quickly and thoroughly.

2. Joint-Stock Company (A.Ş.)

Suitable for larger scale investments and foreigners planning public offerings.

Features:

Can be established by at least 1 partner with no upper limit on the number of partners,
Shares are transferable; notarization is not mandatory but special regulations may apply,
Minimum capital is 250,000 TRY (500,000 TRY in registered capital system),
At least 25% of capital must be deposited into a bank account before registration,
General assembly and board of directors are mandatory,
Can go public and issue debt instruments.

Joint-stock companies are preferred especially in finance, energy, technology, and export sectors with high volumes. Since establishing such companies is more complex, it is recommended to have the process managed by an İzmir foreign investment attorney.

3. Sole Proprietorship

These companies, established by individuals, are generally suitable for small-scale and low-risk activities. However, foreigners face some restrictions when establishing sole proprietorships, and it is rarely preferred.

4. Collective and Commandite Companies

Because these companies involve unlimited liability and have more complex shareholder structures, they are rarely preferred by foreign investors.

5. Opening a Branch of a Foreign Legal Entity in Turkey

A foreign company may open a branch directly in Turkey. However, this structure does not create a separate legal entity in Turkey. Permission must be obtained from the Ministry of Trade with documents such as the parent company’s articles of association, activity certificate, and authorization documents.

6. Opening a Liaison Office

Foreign companies wishing to conduct only market research or promotional activities without generating income may open a liaison office with the permission of the Ministry of Trade. This structure cannot engage in commercial activities but is useful for foreigners seeking to explore the Turkish market without establishing a company.

In conclusion, the most preferred forms by foreigners in Turkey are limited and joint-stock companies. These structures are advantageous in terms of tax benefits and investor rights protection and it is advised to carry out the establishment and operational processes with expert support.

Advantages and Risks of Establishing Foreign Partner Companies in Turkey

What advantages and challenges does establishing companies by foreigners in Turkey present?

Foreign investors establishing companies and engaging in commercial activities in Turkey gain many strategic advantages. However, it must not be forgotten that this process also involves some risks. Therefore, besides advantages, potential legal, administrative, and financial difficulties must be assessed beforehand.

Advantages of Establishing Foreign Partner Companies

1. Equal Investment Rights and Legal Protection
Foreign investors have the same rights as Turkish citizens in Turkey. This is guaranteed by Law No. 4875 on Direct Foreign Investments, which enhances legal security. Within this scope, a foreign investor can trade directly by establishing a company, offer goods and services, and engage in import and export activities.

2. Large Market and Strategic Location
Turkey is a strategic trade point connecting Europe, Asia, and the Middle East. It offers advantages for foreign companies both as a local market and as a regional distribution center.

3. Incentives and Tax Advantages
Within the Investment Incentive System, foreign investors operating in specific sectors and regions can benefit from tax reductions, social security premium supports, customs exemptions, etc. Companies established in free zones also enjoy significant advantages.

4. Ease in Foreign Exchange Earning Activities
Foreign partner companies engaged in export activities can benefit from government incentives as a priority. Cooperation with exporter unions and chambers of commerce speeds up procedures.

5. Double Taxation Avoidance Agreements
Thanks to double taxation avoidance agreements Turkey has signed with many countries, foreign investors are not taxed twice on the same income in Turkey and their home country.

6. Institutionalization and Transparency
Establishing a company in Turkey formalizes the foreign investor’s commercial activities, which is a serious advantage in terms of reputation and customer trust. Institutionalization can also be achieved through professional management and audit mechanisms.

Risks of Establishing Foreign Partner Companies

1. Compliance and Adaptation Challenges to Legislation
Foreign investors may have difficulty complying with complex regulations in trade, tax, and labor law due to unfamiliarity with the Turkish legal system. Especially tax declaration deadlines, social security liabilities, and e-ledger systems require serious attention.

2. Language and Bureaucratic Barriers
Translation of official documents into Turkish, notarizations, and communication with public institutions may create significant time and cost burdens. This barrier can be easily overcome with expert support such as an İzmir foreigners law attorney.

3. Establishment Costs and Process Management
The company establishment process requires expenses in many items including notary fees, translation costs, chamber registrations, trade registry registration, tax office fees, and financial consultancy services. Additionally, administrative procedures like opening a bank account, social security registration, and electronic signature operations take time.

4. Work and Residence Permit Restrictions
If a foreign partner intends to work actively in Turkey as the company manager, a work permit must be obtained from the Ministry of Labor and Social Security. Certain conditions (e.g., employment of at least 5 Turkish citizens) apply. Failure to comply may expose the company to administrative fines.

5. Sectoral Restrictions
Certain sectors are entirely closed to foreign investors or require prior permission, especially in energy, defense, media, and real estate ownership.

In light of all these advantages and risks, the process of foreigners establishing companies in Turkey requires careful planning and professional support. Working with an experienced İzmir foreign company attorney is critically important to prevent potential legal issues and ensure a smooth process.

Required Documents and Paperwork for Foreign Company Founders

What documents must foreigners preparing to establish a company in Turkey compile?

It is very important that certain documents are prepared completely and correctly in the process of foreigners establishing companies in Turkey. However, the content of these documents may vary according to the type of company applied for, whether the applicant is a natural or legal person, and the sector in which they will operate.

The basic documents that foreign investors generally need to prepare include:

Identity card or passport (notarized Turkish translation),
Signature declaration,
Residence declaration,
Establishment declaration and articles of association,
Power of attorney (if procedures will be carried out via attorney),
Activity certificate and registry extracts (for legal persons),
Company address information (lease contract or title deed).

An important issue here is that documents must be prepared in accordance with details such as official translation and notarization. Also, for documents coming from some countries, apostille certification is required.

Incorrect or incomplete preparation of documents may delay or result in rejection of the application process. Therefore, before starting company establishment procedures, all documents must be prepared in compliance with the current legislation and submitted in the correct order.

It is strongly recommended that foreign entrepreneurs wishing to establish companies in Turkey carry out the process with professional support to avoid errors regarding legal, financial, and administrative documents. As KL Legal Consultancy, we prepare customized document lists according to investors’ needs and manage all paperwork processes from start to finish.

Work Permit and Residence Status of Foreign Company Partners in Turkey

What permits must foreign company partners obtain to work and reside in Turkey?

The fact that a foreign national establishes a company in Turkey does not automatically grant work or residence rights. In other words, if a foreign founding partner wants to actively take part in their company and reside in Turkey, they must also apply for a work permit and a residence permit.

Work Permit

Work permits are evaluated and granted by the Ministry of Labor and Social Security. Certain criteria must be met for foreign partners to obtain this permit:

The foreign individual must hold at least 20% of shares.
The capital share is generally at least 50,000 TRY.
The company is expected to employ at least 5 Turkish citizens (exceptions may exist).

This application is submitted online through e-Government and documents must be prepared meticulously. Incorrect or incomplete applications may delay or cause rejection.

Residence Permit

If a foreign company partner intends to stay long term in Turkey, a residence permit is also required. Residence permits are usually granted simultaneously with work permits, but in some cases, separate application may be necessary.

Work and residence permit processes are technical and sensitive stages. Especially for first-time applicants, document preparation, system entries, and tracking require serious attention.

At this point, founders who conduct the process with support from an İzmir foreigners law attorney gain significant advantages in terms of time and security. KL Legal Consultancy manages all permit processes for foreign company partners from start to finish and provides support fully in accordance with the latest legislation.

Sectors Where Foreign Partner Companies Can Operate in Turkey and Legal Restrictions

Can foreign company partners operate in all sectors in Turkey?

While foreign investors in Turkey are generally granted the right to operate freely in many sectors, some areas have restrictions and special permit obligations. Therefore, the activity area must be carefully examined within the legal framework before establishing the company.

Free Activity Areas

In general, foreign investors have the same rights as local investors in the following sectors:

Trade (import, export, retail and wholesale),
Consultancy and service sector,
Logistics and transportation,
E-commerce,
Software and technology services,
Manufacturing and production industries.

Foreign companies wishing to operate in these areas only need to meet general establishment conditions. However, sector-specific regulations should still be carefully reviewed.

Restricted or Permit-Subject Sectors

In some sectors, direct foreign investments are subject to certain limitations or permits:

Defense and security industry,
Energy, petroleum, and natural gas exploration activities,
Air transportation and port management,
Radio and television broadcasting,
Certain agricultural and livestock activities,
Real estate buying, selling, and ownership acquisition (especially in certain provinces),
Mining activities.

Foreign investors wishing to operate in these sectors may require licenses, activity permits, or Ministry approvals obtained in advance. Moreover, in some areas foreign participation may be completely prohibited.

Location Selection and Regional Restrictions

In some strategic or military zones, opening workplaces or acquiring real estate by foreign companies is subject to permission. This is especially applicable in the Eastern and Southeastern Anatolia Regions or coastal areas.

Before determining which sector and company model a foreign investor will operate in, all restrictions set forth in Turkish legislation must be considered. Failure to do so may prevent the investor from obtaining licenses, operating legally, or may result in serious administrative sanctions.

Therefore, regardless of the investment direction and scope, conducting a preliminary assessment with experts at KL Legal Consultancy provides a safe start both legally and financially.

Legal and Financial Matters to Consider in the Process of Foreigners Establishing Companies in Turkey

What are the main legal and financial issues foreigners should consider when establishing companies in Turkey?

A successful process for foreign investors establishing companies in Turkey is possible not only by completing official procedures but also by anticipating possible legal and financial risks in advance. Therefore, there are some basic issues to consider before, during, and after company establishment.

Legal Issues

1. Preparation of Articles of Association:
The articles of association, which include the company’s activity area, partnership structure, capital distribution, and representation powers, is the most important document. Deficiencies or errors in preparation may cause internal disputes and legal problems later.

2. Partnership and Representation Structure:
The roles and authorities of company partners must be clearly defined, especially if the manager is foreign, and representation limits must be carefully regulated. If there are proxy relationships among partners, this must be clearly documented.

3. Tax Law Compliance Process:
Compliance with tax laws is mandatory for every company. However, it should not be forgotten that companies with foreign partners may be subject to additional audits. Tax declarations, e-ledger, e-invoice, and VAT regulations must be submitted timely and accurately.

4. Trade Registry and Company Address:
The official address of the company must be a valid business location. Changes such as address or activity field must be registered with the Trade Registry.

5. Contract Management:
Contracts prepared for suppliers, customers, or employees must comply with the Turkish Code of Obligations and the Turkish Commercial Code. Otherwise, contracts may be invalid or the company may face significant compensation liabilities.

Financial Issues

1. Capital Commitment and Banking Procedures:
In joint-stock companies, at least 25% of the capital must be deposited into a bank account at the time of establishment. Official receipts must document this transaction.

2. Establishment Costs:
Costs arising from notary, translation, chamber registrations, trade registry registration, tax office fees, and financial consultancy services should be planned in advance.

3. Financial Consultancy and Reporting:
Every company is legally obliged to work with a financial consultant. Otherwise, serious delays and penalties may arise in tax and social security obligations.

4. Foreign Exchange Transactions and Capital Entry:
Capital brought from abroad must be recorded in accordance with Central Bank regulations and transferred to the company account. Otherwise, the investment will not be considered a legal investment.

5. Incentives and Exemptions:
Investment incentives, regional supports, and tax advantages are only possible with correct applications and appropriate activities. These matters require expert consultancy.

In conclusion, it is not sufficient for foreign investors wishing to establish companies in Turkey to complete only official procedures. The entire process must be managed carefully with regard to legal and financial aspects. Within this scope, KL Legal Consultancy provides strategic consultancy at every stage from establishment to ensure a risk-free and secure process.

The Importance of Attorney Support in the Process of Foreigners Establishing Companies in Turkey

Why should foreigners who want to establish companies in Turkey obtain attorney support?

The process of establishing a company in Turkey involves various legal, administrative, and financial stages for foreign investors. Due to the dynamic and detailed nature of legal regulations, obtaining professional attorney support in this process is not merely a preference but in many cases a necessity.

1. Prevention of Errors and Delays

A small document error or missing paperwork in the company establishment process can lead to cancellation of all transactions or serious delays. An expert İzmir foreigners law attorney ensures documents are prepared in accordance with legislation, manages application processes meticulously, and informs the client at every step.

2. Compliance and Access to Up-to-Date Information

Regulations covering the Turkish Commercial Code, Tax Procedure Law, Direct Foreign Investments Law, and International Workforce Legislation frequently change. Close monitoring and correct implementation of these changes require legal expertise.

3. Strategic Planning of Company Structure

Determining the most suitable company type, partnership structure, and representation system according to the sector and goals of foreign investors requires professional analysis. An experienced attorney offers the client the most appropriate structure providing both legal security and commercial advantage.

4. Management of Work and Residence Permit Processes

Foreign partners or managers must meet certain legal conditions to obtain work and residence permits. These applications must be made completely and timely, which is often impossible without attorney support. Incorrect declarations may lead to serious sanctions.

5. Long-Term Legal Assurance

After the company is established, receiving legal consultancy on commercial contracts, employment agreements, tax disputes, and administrative audits increases the company’s stability and reliability.

KL Legal Consultancy offers comprehensive consultancy services tailored specifically for foreign investors and provides professional support at every stage of company establishment in Turkey. Our İzmir-based law office analyzes all legal risks investors may encounter in advance and develops quick and effective solutions.

You can obtain professional consultancy from KL Legal Consultancy to ensure your Turkish citizenship application process is conducted completely and correctly. By contacting our expert attorneys, you can best protect your legal rights.

Company Formation in Turkey