Introduction
Establishing a business in Turkey offers a dynamic environment for international investors. Turkey’s Foreign Direct Investment (FDI) Law ensures equal treatment, allowing both local and foreign investors the same rights and obligations. Therefore, understanding the requirements and processes involved is crucial for a successful venture.
Understanding Turkey’s FDI Law
Turkey’s FDI Law is grounded in the principle of equal treatment. This law not only provides international investors with the same rights as local ones but also allows them to establish any company type outlined in the Turkish Commercial Code (TCC). Consequently, this approach enhances corporate governance and aligns Turkey with EU legislation, fostering a transparent and investor-friendly environment.
Simplified Business Setup Process
To further improve the investment climate, Turkey has implemented reforms aimed at reducing bureaucracy. As a result, establishing a business can now be completed on the same day at designated Trade Registry Directorates, which function as a ‘one-stop shop.’ This significant improvement minimizes delays and enhances efficiency.
Types of Companies Under TCC
Businesses in Turkey can take various forms, categorized into corporate and non-corporate structures. Understanding these options is essential for choosing the right type for your business.
A. Corporate Forms
- Joint Stock Company (JSC)
- Limited Liability Company (LLC)
Both JSCs and LLCs share similar establishment procedures, although they differ in capital requirements. Thus, it’s important to assess which type best suits your business needs.
B. Non-Corporate Forms
- General Partnership
- Limited Partnership
- Partnership Limited by Shares
While all five company types are available, JSCs and LLCs are the most popular choices due to their flexibility and structure.
Steps for Establishing a Company in Turkey
When setting up a company, following these key steps will facilitate the process:
- Obtain a Tax Identity Number:
- First, non-Turkish shareholders and board members must acquire a tax identity number, which is necessary for opening a bank account.
- Submit Online Registration:
- Next, use the Central Registry Record System (MERSIS) for trade registration. Ensure that all documents, including the Articles of Association, are prepared in advance.
- Notarize Company Documents:
- Following this, Articles of incorporation must be signed before authorized personnel or a Notary Public.
- Deposit Capital:
- Additionally, deposit at least 25% of the startup capital into a bank account. Importantly, the remaining capital must be paid within two years for LLCs.
- Apply for Registration:
- After gathering the necessary documents, founders may apply for registration at the Trade Registry Directorate.
- Certify Legal Books:
- Then, ensure that the necessary legal books (e.g., journal, ledger) are certified during the establishment process.
- Obtain Social Security and Tax Registration:
- Finally, apply for a social security number and tax registration certificate to complete the registration process.
Moving Towards E-Governance
Turkey is modernizing its business establishment processes to enhance efficiency. As a result, certain documents, such as the Activity Information Form for FDI, can now be submitted electronically through the E-TUYS system. This modernization not only simplifies the submission process but also provides faster access to updated information regarding foreign investments.
Conclusion
In summary, establishing a business in Turkey is a streamlined process thanks to recent reforms. By understanding the FDI Law and following the outlined steps, international investors can successfully navigate the Turkish business landscape. If you’re considering investing in Turkey, seeking guidance from local experts will ensure a smooth and compliant business setup.
