Turkey company registration

Turkey company registration

DOING BUSINESS IN TURKEY

For over a decade, Healy Consultants has assisted Clients with business registration in Turkey. Besides company incorporation, we also assist with i) government license registration ii) corporate bank account opening iii) employee recruitment iv) Turkish visa and immigration strategies and v) work space rental solutions.

Press the link headings below to read detailed, relevant, up to date information.

  • Advantages and disadvantages

    Advantages of Turkey company registration

      business registration in Turkey
    1. Registering a company in Turkey is easy because:

      • A Turkish limited liability company can be incorporated within one week, with a minimum of one shareholder and one director of any nationality. Thus a Turkish entity can be wholly foreign owned;
      • The minimum paid up share capital is €3,300 and our Client does not need to travel to complete the engagement.

    2. A Turkey Free Zone company is fully exempt from all taxes including:
      • A Turkey Free Zone company pays no corporate tax, VAT or customs duty;
      • Free zone companies are also allowed free repatriation of their profits back to the parent company.

    3. Turkey is expected to be the fastest growing economy in Europe:
      • Turkey’s economy is one of the most rapidly expanding in the world, with the GDP increasing threefold between 2002 and 2012;
      • Turkey is expected to be the fastest growing economy in Europe from 2012-2017.

    4. Turkey boasts an institutionalized economy fuelled by €91 billion in foreign direct investment. Turkey is ranked as the 13th most attractive destination for foreign investment in the FDI Confidence Index;
    5. Transporting goods around and out of Turkey is easy because:
      • Turkey boasts a huge amount of railway routes to destinations in Europe and Asia, with direct routes to China planned for the next decade;
      • Turkey is conveniently located between Europe and Asia, reducing transport costs to either continent;
      • Turkey has high-quality low-cost sea transport infrastructure in place, allowing quick shipment of goods throughout Europe.

    6. Turkey offers an excellent business environment, with benefits including:
      • Turkey has an incredibly young population, with more than 27 million people under the age of 25 providing a large supply of skilled and unskilled labour. More than 600,000 students graduate annually from Turkish universities, giving entrepreneurs excellent selection of top-quality workers;
      • Turkey is ranked as the 20th best country in the world for protecting investors, according to the Doing Business study by International Finance Corporation. Turkey is ranked above the OECD average in all major aspects of protecting investors and recent reforms implemented have made Turkey an even safer investment option;
      • Turkey boasts a strong legal system, which processes disputes and settles contracts 4 months quicker than the European average and enforces property rights throughout the country;
      • Entrepreneurs who invest in Turkey are not required to submit their personal details for public record, thereby allowing greater privacy;
      • Turkey is a relatively inexpensive country, compared to other countries in Europe. Office space and apartment rent in Turkey costs only a sixth of what it costs in London.

    Disadvantages of Turkey company registration

    1. Turkey business registration can be expensive in some circumstances, including:
      • Resident companies must pay a high company tax rate of 20%;
      • Companies purchasing goods must pay an additional VAT rate of 18% on most goods;
      • Short-term business ventures are relatively more expensive, due to high mandatory incorporation fees imposed by the Turkish government;

    2. Our Clients will be required to comply with some difficult government requirements including:
      • While a resident director is not required by law, entrepreneurs who wish to run their business while living in Turkey are required to have lived in Turkey for 5 years prior to being eligible for an entrepreneur visa;
      • Annual audited financial statements must be submitted to the Turkey trade registry including a complete tax return;
      • Incorporation in Turkey requires a visit from a tax officer to company headquarters for the company to be fully compliant, meaning most entrepreneurs will require a full business office with all its expenses for their Turkish company.

    3. Running a Turkish business can be cumbersome because:
      • Turkey suffers from high corruption, being ranked the 66th least corrupt country in the world in the 2015 Corruptions Perception Index by Transparency International;
      • Opening a Turkey corporate bank can be difficult. High global demand for European business setup makes Turkey banks selective of customers;
      • Utilizing the Turkish legal system to settle business disputes is more expensive than in the majority of other European countries;
      • Turkey is ranked 50th in the English Proficiency Index, indicating a very low standard of spoken English. Entrepreneurs will need to make frequent use of a Turkish translator when starting a business in Turkey;
      • Dealing with construction permits in Turkey is a nuisance. Entrepreneurs whose business involves construction should expect long tedious processes and high associated costs;
      • Resolving insolvency is also incredibly difficult to deal with in Turkey. The average time for dealing with insolvency is 3.3 years, almost twice as long as the OECD average. Turkey also has one of the worst insolvency recovery rates in the world at just 22 cents on the dollar;
      • Turkey has a poor reputation with the Financial Action Task Force. Turkey is currently on the FATF blacklist, though it is not on the OECD ‘blacklist’ of tax havens.

  • Best uses for a Turkish company

    1. A Turkey holding company is an excellent way to book global profits while legally minimizing international tax because:
      • Dividend income from all sources is legally tax exempt;
      • Sale of shares of a foreign subsidiary is also fully tax-exempt;
      • Turkey has free trade agreements with 22 countries, reducing export and import duties to 0%;
      • Turkish companies are exempt from capital gains tax, on the condition that the assets had been held for a minimum of 2 years;
      • Turkey boasts 76 international double tax treaties minimising global withholding tax.

    2. Turkey can be a reliable tax exempt headquarters for Europe extracting funds from regional subsidiary companies in the form of dividends, management fees and royalties.
    3. A Turkey company with a minimum share capital of at least €250,000 is eligible for tax benefits including:
      • Eligible companies receive partial exemption from corporate tax, with a maximum 50% exemption rate available;
      • Eligible companies receive complete exemption from withholding tax for the first 10 years of incorporation.

    4. Turkey boasts several industries that are great investment opportunities including:
      • A rapidly growing export sector, with a 325% growth in the sector since 2002. Export-minded entrepreneurs can expect simplified procedures and high quality infrastructure to support the growth of their business;
      • A world-leading agricultural sector, with agriculture being a 350 billion dollar industry in the country;
      • Europe’s fastest growing steel industry, which is now the 10th largest steel industry in the world;
      • Transportation, telecommunications and energy industries that are all technologically on par with other developed countries and receive large amounts of government investment.

Company registration

  • Time to incorporate: Three weeks
  • Cost to set up: €11,710
  • Minimum capital: €3,300
  • Physical office required: No

Required appointments

  • Shareholders: 1
  • Directors: 1
  • Company secretary: No
  • Resident director: No

Key facts

  • Corporate tax rate: 20%
  • Corporate tax base: Worldwide
  • Shelf companies: No
  • Main company type: Limited Company

Frequently asked questions

Contact us

For additional information on our company registration services in Turkey, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Mr. Petar Chakarov, directly:
client relationship officer - Petar
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