Starting your own business is always an intense experience. On the one hand, there is the excitement of seeing your project come alive, along with the expectation of financial gain; on the other hand are the somewhat burdensome administrative requirements. Turkey is no exception and you will have you go through a number of bureaucratic procedures, but the country’s significant business opportunities definitely make it worth the effort.
Types of companies
The Turkish Commercial Code defines several legal business structures, all open to foreigners. Here is an overview of the most common ones.
The limited company, requiring a minimum of one partner and 5,000 Turkish liras in capital, is relatively simple to set up and is hence one of the most popular corporate forms for small and medium businesses.
The joint stock company, involving a minimum capital of 50,000 Turkish liras and a minimum of one shareholder on the board, is more suitable for larger-scale projects. It must be registered with the Capital Market Board and obtain a stock certificate.
In both these types of companies, your accountability is limited to your stakes in the company's capital.
You will on the other hand be personally accountable for the liabilities of your business if you start your activity under the status of sole proprietorship or of collective company. No minimum capital is required for these companies.
Good to know:
Turkey's corporate law is based on the principle of equal treatment, entitling international investors to the same rights and duties as local ones. However foreigners must request special authorisations to invest in a few regulated sectors such as energy or aviation.
Registering your business in Turkey
Whichever legal structure you select, you will be required to apply for registration with the Trade Registry System (MERSIS), providing notarised copies of the company's statuses and of the partners' identification documents, a tax identity number for the company, bank receipts stating that at least 25% of the capital has been deposited and that another 0.04% has been transferred to the Turkish Competition Authority via the Central Bank or a public bank, and a declaration of commitment to operating in an ethical and legal manner.
Legal operating costs
The Turkish minimum net gross monthly salary is set at 2,325 Turkish liras. Moreover, the employer must contribute to the social security fund (22.5% of wages) and to the national unemployment insurance plan (2% of wages).
Employees' working time should not exceed 45 hours a week, with overtime paid at a rate of 1.5. Working on public holidays entitles workers to double pay. For more information about labour conditions in Turkey please see our Working in Turkey article.
As for Turkey's corporate tax, it is one of the most competitive in the region, at a flat rate of 20%. Any dividends are taxed at 15%.
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Working in Turkey for at least 5 years continuously makes you eligible for an independent work permit allowing you to work as a self-employed individual. The independent worker certificate costs about 1,400 liras.