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International investors are allowed to establish any form of company set out in the Turkish Commercial Code. The conditions for setting up a business are the same as those applied to local investors.
According to the Turkish Commercial Code numbered 6102, companies may be established under the following types in Turkey:
- Joint Stock Company (JSC)
- Limited Liability Company (LLC)
- Cooperative Company
- Collective Company
- Commandite Company
Although companies may be established abovementioned types, it is clear that JSC and LLC are the most common types chosen both in the global economy and Turkey.
In addition to above listed types of companies, branches and liaison offices may also be considered as alternatives when setting up a business in Turkey. Yet, branches and liaison offices are not considered to be legal entities.
It can be said that even if the financial thresholds (i.e., minimum capital) and organs differ from each other, the procedure to be followed for establishing a JSC or an LLC are the same. This article is written to give brief information about JSC and LLC.
Joint Stock Company
A joint stock company is a company, whose capital is determined and divided into shares, being liable for its debts only up to the amount of its estate. The shares of capital subscribed by them limit the liability of partners.
A single shareholder is sufficient to establish a joint stock company. Legal entities or real person could be founders or partners.
Joint stock companies can be established for any kind of economic purpose that is not prohibited by law.
The minimum amount of capital to establish a JSC is 50,000 TRY. (If the company’ shares are not publicly traded; it must be founded with a minimum 100,000 TRY of capital.)
The organs of a JSC are responsible for governing and operating the company. The managing and representative organ is the board of directors and the decision making organ is the general assembly. Audits of JSC is appointed to independent organs.
The board of directors must be composed of one or more persons assigned by the article of association. Unless otherwise stipulated in the articles of association or unless the Board of Directors comprises one member, representational authority shall be exercised by the Board of Directors by affixing two signatures. At least one member who represents the company must be a Turkish citizen domiciled in Turkey.
There is no obligation for the Board member to be a shareholder as well. Board members can include locals or foreigners.
Limited Liability Company
A limited liability company is a company established with at least one shareholder who is a real person or legal entity, shareholders’ liability is limited to the subscribed capital and paid by the shareholders.
Number of partners can be no more than fifty.
Limited liability companies are responsible for the debts and liabilities only of the assets it owns.
Limited liability companies can be established for any kind of economic objective and purpose.
The minimum amount of capital to establish a limited company is 10,000 TRY.
Nominal values of the basic capital shares can be determined in the articles of association as at least 25 TRY but can be set below this value in order to improve the company’s status.
Basic capital shares shall be paid as set forth in the articles of association, in cash or in kind, or by exchanging a receivable or, as in capital increase, by conversion of freely utilised equity into basic capital.
Using a trade name is mandatory for limited companies. Trade name must be Turkish.
The LLC is managed by managers who are foreigners or locals. At least one shareholder shall be appointed as manager.
If you decide to set up a business in Turkey, we are here to help you with the establishment procedures. Establishing a company takes appx. 5-10 days. Our office provides you following services:
Preparation of articles of association
Preparation of draft establishment application documents
Guidance during the preparation phase
Translation and notarization of documents
Application with local Trade Registry
Legalization of Company books
Preparation of Tax Office application petitions and documents
Contact us today to learn more what we can do for you !