How to Set Up a Business in Turkey?Fri, Aug 26, 2022 12:00 AM
Turkey offers a very suitable climate for foreign investors. Especially for the Gulf region and other Arab countries, Turkey's proximity to the EU and bilateral trade relations with EU countries are of great importance. In addition, Turkey's Customs Union agreement with the EU provides duty-free access to one of the world's largest and richest markets. When the reasonable exchange rate, affordable labor cost, and well-educated population are taken into account, any investment in Turkey will be very profitable thanks to the ease of export to the EU.
We have compiled the important criteria you need to know about setting up a business in Turkey. The first thing to know in this context is the principle of equality in establishing a business and transferring shares specified in Turkish Commercial Law. In other words, regardless of the nationality of the investor, they will be treated equally under the supervision of the Turkish authorities. Also, setting up a business in Turkey is a very fast process. According to OECD figures, it takes only 7 days to start a business in Turkey. Also, Turkey ranks 33rd in the world's ease of doing business list.
Can You Start a Business in Turkey As a Foreigner?
Turkey has a favorable market for foreign investors as well as domestic investors. In fact, within the framework of the recent changes in the law, it is seen that domestic and foreign investors are subject to the same rights and obligations at the point of establishing a company in Turkey. Differences occur only in the process of establishing a company, depending on the type of legal entity and type of company. The establishment of a company in Turkey by foreigners is usually done within one week. Factors such as the type of company, the preparation of the articles of association, the status of the notary and registration procedures, and the process of obtaining permission from the ministry, may extend or shorten this period.
It is possible to set up a business in Turkey without foreigners coming to Turkey. A foreigner can carry out all establishment procedures by giving a power of attorney to a lawyer who is an expert in company law and preferably speaks English. A residence permit alone is not enough to set up a business in Turkey. In the case of applying for a self-employment permit after being in Turkey with a residence permit for 5 years, a sole proprietorship can be established.
How Much Does It Cost To Start a Business In Turkey?
The cost of starting a business will vary depending on factors such as the line of business in which you will operate, the number of partners in your company, and the amount of capital and rent. Knowing the rules and laws, setting up a business in Turkey is different from other countries. The situation is the same for foreigners who want to set up a business in Turkey.
Before starting a business in Turkey, you should decide what kind of business you want to start. For foreigners, first of all, you can choose between two companies. The first is Limited Liability Company (LLC), and the second is Corporate Company C-Corp. You can set up a business in Turkey with only one shareholder. Forming an LLC is easier than forming a corporation, as there is no need to constrain money to a bank throughout the incorporation procedure. Although it may seem difficult and costly to set up a business in Turkey, it is possible to be successful if you proceed in a planned way.
How Can a Foreigner Register a Company in Turkey?
Foreigners who want to start a business in Turkey are required to legally reside for at least five years. Those who fulfill this requirement can be granted a work permit by the Ministry of Labor and Social Security. This permit will enable the person to open a sole proprietorship as a self-employed person. It will be taken into account in the evaluation of the foreign work permit to establish a business in Turkey; The foreigner must submit documents to the Ministry of Labor and Social Security stating that the activity of the foreigner will contribute to the country's economy and that the foreigner has sufficient income to carry out the activity.
The conditions for establishing a company and transferring shares to set up a business in Turkey are the same as those applied to local investors. After these stages, foreign investors can establish any company that complies with the requirements specified in the Turkish Commercial Code. On the other hand, establishing a business in Turkey is becoming more and more attractive for foreigners, thanks to its young workforce, strong demand, and access to international markets. The Government of Turkey also provides very important incentives in order to increase the foreign investment coming to Turkey.
How Do I Start a Personal Business in Turkey?
The most common method in terms of setting up a business in Turkey is for those who want to do their own business to establish a sole proprietorship. A sole proprietorship is a type of company that can be established by individuals.
Establishing a sole proprietorship is an important alternative for those who want to become a small or medium-sized business because of its fast completion of transactions and low cost. The address to go for the establishment of a sole proprietorship is the tax office. You can personally apply to the tax office by collecting the required documents for the organization.
The establishment costs of sole proprietorships are significantly lower compared to other types of companies. Transactions are completed in a very short time. After submitting the documents you have collected and submitted your application, your company will be fully established in an average of 2 days. If you decide to set up a sole proprietorship in Turkey, there are three types of taxes you have to pay. These are Income Tax, Value Added Tax (VAT), and Withholding Tax.
You can read our previous article from the following link https://www.royalwhiteproperty.com/blog/eu-negotiations-and-turkish-property-prices.