Set up a company in Turkey

Please do not hesitate to contact with YMM Emrah Aygül if you require further information. ( [email protected] )

Steps of the establishment procedure are as follows;

Check the appropriateness of the chosen company name and the title to use.

Drown-up and sign an article of association to conform to the approved term.

Get the articles of association notarized by a Public Notary.

Prepare founders declaration signed by founders.

Make the payment of capital contribution if the capital is contributed by the shareholders at establishment.

Make the payment of Fund for Protection of Competition 0, 04% of the capital commitment.

Apply to trade registry office with company establishment form along with all other relevant documents and statements.

Application must be approved by Trade Registry Office for registry and the company becomes a “legal entity” following its registration.

Prepare the signature declaration of the authorized persons under the company name and notarized by a Public Notary.

Get the legal books certified by a Public Notary and apply for e-book to IRS.

Prepare invoices under the conditions required by law and print them by contracted printers.

After ‘legal entity’ status received, the company should apply for following entities;

Registration with district Tax Office must be done.

Entities engaged in trade must register with Chamber of Commerce or Chamber of Industry.

Permits to commence operations must be obtained from Municipal Authorities.

Registration with the provincial office of Social Security Institution required.

 

Required documents are as follows:

1. Petition

2. Enterprise notification form(4 copies)

3.Passaport copies of founders(translated and notarized)

4. Tax Office number of founders (taken from tax Office in Turkey)

4. Articles of association notarized by a Public Notary (4 copies)

5. Signature declaration of the BDO (2 copies)

6. Founders statement (signed by the founders)

7. Bank receipt of fund,  0,04 of the capital commiment.

8.Bank letter of capital payment.( At least 25 % of the nominal value of the shares subscribed in cash must be paid before registration with Trade Registry.)

9. Chamber registration statement (with pictures of founders)

Also to follow and complete all establishment process, founders should give us a notarized proxy.

There are two types of company.
 
“Joint Stock Company – AS
Joint Stock Company can be established any economic purpose and subject that is not prohibited by law. Joint Stock Company has a separate legal status from its shareholders with the result that they have limited liabilities for the debts and losses of the company and liabilities are limited to the subscribed capital and paid by the shareholder.
At least one shareholder that can be real person or legal entity and a minimum capital of TRY 50,000 are mandatory. At least 25 % of the nominal value of the shares subscribed in cash must be paid before registration with Trade Registry.
Joint Stock Company is governed by board of directors and they have been granted the authority to represent and bind the company. Board of directors can be constituted by one or more member and board members no longer need to be shareholders. Legal entity can be a board member too, but it must be represented by real person. There are no restrictions on nationality or residence of board members.
Limited Liability Company – LTD
It is a company established with at least one shareholder that can be real person or legal entity and the liability of the shareholders is limited to the subscribed capital and paid by the shareholder. The number of shareholders may not exceed fifty. Limited Liability Company can be established any economic purpose and subject that is not prohibited by law.
A minimum capital of TRY 10,000 is mandatory and per value of the each share cannot be less than 25 TRY. All of the capital should be committed to an unconditional by shareholders and at least 25 % of the nominal value of the shares subscribed in cash must be paid before registration with Trade Registry.
Limited Liability Company is governed by managers. At least one member of the partners must have right to represent and bind the company. Legal entity can be a manager, but must be represented by real person and that person must be registered. There are no restrictions on nationality or residence of manager. The responsibilities of manager start up with borne by the legal entity.”

SOME RESPONSIBILITIES OF STOCK CORPORATIONS

  • Stock corporations are subject to Corporate Income Tax and they pay a tax rate of %20 (this rate will be applied as 22% for the years 2018,2019 and 2020.)  out of their quarterly income. If there is a distribution of profit, taxation rate will be %15. This amount could be less according to double taxation agreements. General VAT rate is %18.
  • There are multiple controls over document order. Numeral and line numbers are under the cognizance of Revenue Administration Office. Accounting records should be written on empty journals, which are sealed by a public notary.
  • There is a legal liability to use the banking system for payments. Small amounts are excluded.
  • Within a range of %15 to %35 income tax is withhold from the income of the employee. Social Security contribution of %15 is also cut from the wage of an employee. Employer also pays another %15,5 to the Social Security Institution.
  • Severance allowance is calculated every year from the 30 days gross income of each employee. However, these amounts are paid if the employee leaves with fair cause or discharged by the employer.
  • Stock corporations must have at least one partner and must have a general annual meeting. If the company has foreign capital, General Directorate of Incentive Practices and Foreign Capital must be informed about the companies operations and changes.
  • A member of the board of directors is liable with all his/her assets for all public debts (Social Security contributions and tax etc.)
  • Stock corporations inform the Revenue Administration with a list of all companies, which they did commercial transaction, including the number of transactions and amounts.
  • %6 resource utilization support fund (KKDF) is paid for buying on account from foreign countries.