Business entities in Turkey in 2023
Healy Consultants will assist our Client engineer the optimum Turkey corporate structure. There are several ways of doing business in Turkey, the most common being formation of a limited liability company (LLC).
Limited liability company
- A Turkey limited liability company (LLC) is the most common entity used to conduct business within Turkey and is allowed to engage in any commercial or industrial activity. A Turkey LLC must appoint a minimum of one director and one shareholder. A Turkey resident secretary is not required;
- A Turkey LLC is relatively straightforward to incorporate, with the entire process taking less than a week and not requiring the entrepreneur to travel to Turkey to complete incorporation;
- An LLC can be also incorporated for the purpose of investment in Turkish free zones. Such a company will enjoy complete exemption from corporate tax, income tax, VAT, witholding tax and customs duties;
- An LLC makes a good partner to a tax exempt holding company, with no taxes levied on dividends received from foreign subsidiaries. All dividends are tax free under the condition that they be held for a minimum of one year and that the parent company own at least 10% of the subsidiary;
- A Turkey limited liability company (LLC) is the most common entity used to conduct business within Turkey and is allowed to engage in any commercial or industrial activity. A Turkey LLC must appoint a minimum of one director and one shareholder. A Turkey resident secretary is not required;
- A limited liability company can be incorporated within one week, with a minimum of one shareholder and one director of any nationality. The minimum paid up share capital is €3,300 and our Client does not need to travel to complete the engagement.
Branch office
The Turkish Companies act regulates foreign company branches in Turkey and stipulates that they may be 100% foreign owned. A branch office in Turkey can conduct trade within the scope set by the parent company. A Turkey branch office is allowed to invoice Turkey customers, sign local sales contracts and receive income from customers. A Turkey branch company is also required to obtain the necessary licensing for its industry of business.
Representative office
Where a foreign company does not intend to carry on business in Turkey it may seek to establish a representative office. While a Turkey representative office is 100% foreign-owned and controlled, it is not permitted to make direct sales within Turkey. Such an office must will only engage in activities such as i) promoting the business of the parent company and ii) market research. A local Turkey agent or distributor must be appointed to sell goods and provide services to local companies.
Table of comparison between different Turkey entities
| Summary at a glance | LLC | Branch | Rep office | Free zone |
|---|---|---|---|---|
| How long to set the company up? | 3 weeks | 4 weeks | 4 weeks | 5 weeks |
| How long to open company bank account? | 3 weeks | 3 weeks | 3 weeks | 3 weeks |
| Bank signatory must travel | Yes | Yes | Yes | Yes |
| Issued share capital required | €3,300 | 0 | 0 | €3,300 |
| Is doing business in Turkey permitted? | Yes | Yes | No | Yes |
| Allowed to sign sales contracts with Turkey Clients | Yes | Yes | No | Yes |
| Allowed to invoice Turkey Clients | Yes | Yes | No | Yes |
| Corporate tax payable in Turkey | 23% | 23% | 0% | 0% |
| Corporate bank account | Citibank | Citibank | Citibank | Citibank |
| Can rent office in Turkey | Yes | Yes | Yes | Yes |
| Tenancy agreement required before incorporation? | No | No | Yes | No |
| Allowed to import raw materials? | Yes | Yes | No | Yes |
| Allowed to export goods? | Yes | Yes | No | Yes |
| Can the entity hire expatriate staff in Turkey? | Yes | Yes | Yes | Yes |
| Do you visit Turkey for company incorporation? | No | No | No | No |
| Resident director required? | No | No | No | No |
| Resident shareholder required? | No | No | No | No |
| Minimum number of directors | 1 | 0 | 0 | 1 |
| Minimum number of shareholders | 1 | 0 | 0 | 1 |
| Turkey resident company secretary | No | No | Yes | No |
| Individual shareholders allowed | Yes | No | No | Yes |
| Corporate shareholders allowed | Yes | Yes | Yes | Yes |
| Corporate director(s) allowed | No | No | No | No |
| Public register of shareholders and directors | No | No | No | No |
| Turkey employment visa fees | €3,950 | €3,950 | €3,950 | €3,950 |
| How long to get work permit approved | 3 months | 3 months | 3 months | 3 months |
| Statutory audit required | Yes | Yes | No | Yes |
| Annual tax return to be submitted | Yes | Yes | Yes | Yes |
| Access to Turkey double tax treaties | Yes | Yes | Yes | Yes |
| Estimate of engagement costs | €16,815 | €14,010 | €13,210 | €16,460 |
| Draft invoice | View invoice PDF | View invoice PDF | View invoice PDF | View invoice PDF |
