What to Consider When Establishing a Company in Turkey?

In this article, we will discuss the issues that should be considered while establishing a company in Turkey. Many issues can be listed when it comes to the points to be considered in the establishment process of the company. Establishing a company involves various dynamites in itself. Company establishment covers the period from the preparation stage to the completion of post-penny transactions.

So, what are the types of companies in Turkey? What should be considered before and after the company’s establishment in Turkey? We have compiled the answers to these questions and more in our article. Here are the things to do when starting a company in Turkey.

What Are the Types of Companies in Turkey?

Types of companies are regulated by the Turkish Code of Obligations (TCO) and the Turkish Commercial Code (TCC). Companies are handled in two groups as “ordinary partnership” and “trading company” in these laws. While the ordinary company is regulated in the TCO, trading companies are regulated in the TCC. Let’s look at the answer to the question of what types of companies are among the first to be considered when establishing a company in Turkey.

• Ordinary Company: It is the simplest type of company that can be established to be used in commercial transactions. An ordinary company or partnership regulated in the TCO may be established by two or more real or legal persons. In this type of company, the partners aim to take action or achieve gains based on a common purpose. Partners put forward their goods and labor for this purpose. The biggest difference between an ordinary partnership and a commercial company is that it does not have a legal personality.
• Joint-Stock Company: Joint-Stock Company, a type of commercial company, is a type of company that can be established by one or more real or legal persons whose capital is determined and divided into shares. Joint-Stock Company shareholders are liable to third parties (other than public receivables) in proportion to the amount of capital they have committed to invest in the company. The minimum capital amount in joint stock companies is 50.000 (fifty thousand) TL. The nominal values of the basic capital shares should be determined as at least 1 (one) kurus or its multiples. At least one-quarter of the capital committed in cash must be paid before registration. The remaining capital fee is paid within 24 (twenty-four) months following the company’s registration.
• Limited Company: Limited Company, another type of commercial company, may be established by one or more natural or legal persons. The basic capital of limited companies is at least 10.000 (ten thousand) TL. The nominal values of the basic capital shares should be determined as at least 25 (twenty-five) TL or its multiples. Paying the entire capital brought in cash within 24 (twenty-four) months after the company’s registration is possible. The number of partners in limited companies can be at most 50 (fifty).

In addition to the above, a “capital company” is not very common in practice, but; Unlimited Company, Limited Partnership with Shared Capital, and Cooperative Company also have a structure.

What Are the Matters to be Considered Before the Establishment of the Company in Turkey?

Those who research the things to be considered while establishing a company in Turkey start to research the issues before establishing the company. Before the company’s establishment, considerations such as incorporation costs, incorporation documents, and business plans are the first steps in starting a company. So, what should be considered before the company’s establishment in Turkey?

• Initial Costs: Before establishing a company, considerations such as office rents, company type, and competitor analysis should be considered. Preliminary work should be done on subjects such as the lease contract, trade name, and place of establishment.
• Taxes and Penalties: Among the things to be considered when establishing a company are the debts, taxes, and penalties for which the company partners are responsible. Some companies do not charge taxes, penalties, or interest from their legal personality. These are first collected from the company itself. Depending on the type of company, directors, directors, and partners are responsible for these expenses. For this reason, it is important to be informed about such details before establishing a company.
• Legal Status: Company formation means gaining legal status. This status is also the officialization of the company. Refrain from overspending before gaining this status; if the expenditures made without gaining legal status are above a certain amount, deducting tax within that year may not be possible.
• Contracts: Setting up a company can be easy, but the real work is after the company is established. You will need a financial advisor to carry out the company’s financial transactions and an attorney or a lawyer for the legal processes. For this reason, contract with a financial advisor. For example, Joint-Stock Companies with a capital of 250,000 (two hundred and fifty thousand) TL or more must have an attorney or a lawyer.
• Company Title: The company’s trade name should be inquired from the Central Registry System and the “Trade Registry Gazette” category on the web portal of the Union of Chambers and Commodity Exchanges of Turkey. The trade name can be freely determined, provided that the phrases indicating the type of company are in Turkish.
• Articles of Association (AoA): Company establishment procedures are carried out through MERSIS. The AoA, including the company title, capital, purpose, subject, and partnership structure, should be formed from MERSIS. The text of this main contract is checked at the Trade Registry Office before the appointment date.
• Incentives: The company’s field of activity and service performance may be subject to various incentives; in this regard, it is beneficial to research and receive services in advance.

What Are the Company Establishment Costs in Turkey?

Among the things to be considered when establishing a company, company establishment costs are important. Company establishment costs may vary depending on factors such as the type of company and the province where the company was established. For example, financial advisory fees differ from city to city. In addition, the company establishment costs to be paid to the Chambers of Commerce may also differ. Company establishment fees also vary according to the financial year.

The company establishment costs to be considered are as follows;

• If the transactions will be made by proxy, notary expenses,
• If the partner/signatory will be foreign, translation/interpreter costs,
• Competition Board fee paid to the Chamber of Commerce,
• Financial advisor and accounting expenses,
• Registration and announcement fee paid to the Chamber of Commerce,
• Stamp cost.

What Are the Things to be Done After the Establishment of the Company in Turkey?

Among the things to be considered while establishing a company, there are also things to be done after the establishment. The points to be considered after the establishment of the company can be listed as follows;

• The signature circular of the company should be issued,
• A tax plate must be obtained,
• A bank account must be opened,
• A business license must be obtained, taking into account the field of activity,
• Additional license(s) should be obtained if necessary depending on the company’s activity,
• In order to follow the accounting transactions of the company, it is necessary to work with a financial advisor,
• SSI, taxation, and tax returns processes should be followed.

We hope that the information we have gathered about the things to consider when establishing a company in Turkey will guide you on your journey to establishing a company in Turkey.