Company Formation in Turkey
Foreign investors can incorporate or participate in all types of companies in Turkey which are available for local investors in accordance with the "equal treatment principle".



In General



There are two kinds of limited liability companies in Turkey, namely Anonim Sirket ("AS") and Limited Sirket ("LS"). Similarities and differences between the two types are as follows;



- Both AS and LS are actually limited liability companies where the liability of shareholders of both the AS and the LS are limited to their respective capital commitment in the company.



- Both AS and LS can be established by sole shareholder.



- Under the current Turkish Commercial Code numbered 6102 (the "TCC"), minimum capital required for LS is 10,000.00 Turkish Liras (approximately €4000.- EUR as of 2015) and a minimum capital of 50,000.00 Turkish Liras (approximately €20,000.- EUR as of 2015) is required for the incorporation of an AS. As for the AS companies which has adopted the "registered capital system", minimum capital of 100,000.00 Turkish Liras is needed.



- AS is managed by Board of Directors and it is possible to have a single-person Board. In LS, there is no Board of Directors and instead it is managed by General Manager(s). If more than one Manager is appointed, a Board of Managers shall be formed.



If you cannot designate a Manager/Director at the beginning of incorporation process, we may provide a temporary manager who will work on a monthly service fee.

- Call for an assembly, general assembly without any calls, minutes, right to call and to make proposal of the minority, agendum, unauthorized attendance subjects which are held under articles relating to AS under TCC, shall also be applied to an LS in comparison when required.

- It is significant to note that LS shareholders and managers, unlike the ones in, may be held personally liable for public debts such as taxes, social security contributions etc., if the company fails to realize these. So we may say that the liability of shareholders/managers of an LS is not limited to their capital contribution in this respect,. However, legal representatives of an AS may also be liable for the non-paid public receivables.



- Any transfer of shares in LS must be approved by shareholders representing the simple majority of the company and the share transfer must be notarized and registered with the Trade Registry. Share transfer in an AS, on the other hand, is not subject to notarization and/or registration procedure.



It should also be noted that AS is recommended where shareholders with potentially conflicting interests come together, such as in a joint venture, since it is possible to establish classes on the shares of AS. On the other hand, LS may be preferable when the sole objective is to establish a wholly owned subsidiary of a foreign parent company with minimum capitalization and administration requirements.



Incorporation Process

1. Articles of Association ("AoA")

We will be drafting the AoA of the company, in accordance with your instructions on below;

- Company Title: The designated commercial title will be researched through Istanbul Trade Registry before establishment, against any inconveniency. In any case, final and binding confirmation will be obtained at the date of registration.

- Company Scope: The most important provision to be decided in AoA is the company operations. The desired operations to be carried out in Turkey should be listed in detail.

- Capital of the company may change in line with the business activity and needs of the company (minimum capital amounts for limited and joint stock companies are mentioned above). If we establish the company with minimum capital, it would always be possible to carry out capital increase in future transactions.

Please note here that ¼ of the cash capital is required to be paid before the incorporation and the remaining shall be paid within 24 months as of the incorporation date.

- Business Address: Rental agreement should be executed with respect to the business address to be stated in the AoA. Concluding a contract with a virtual office would be sufficient for the office headquarters as a lease agreement. We provide virtual office services as well.

2. Personal Data

For real person shareholders:

- Passport Copy

- Photographs

For legal person shareholders:

- Board Resolution resolving on formation of a company in Turkey

- Certificate of Business Activity issued by the relevant authority such as Chamber of Industry, Trade Registry etc., showing the active status of shareholder company

- Documents showing the signature authority of persons appointed to sign on behalf of the shareholder company

There are additional documents required for General Manager(s) of LS and Board Member(s) of JS. Please contact us for further information.

3. Power of Attorney ("PoA")

Each shareholder (and non-shareholder manager in an LS or Board member in AS) must either be present before the Notary Public and government offices in Turkey or provide us a PoA, for company establishment purposes. We prepare the required PoA samples for relevant transactions.

4. Further Documentation

There will be some official documentation which will be prepared by us and submitted to the relevant persons for signature, when needed.

5. Company Accountant

All companies are required to work with certified public accountants on a contractual basis in Turkey to conduct tax office application, obtain the tax plate, follow up tax tax-related matters and perform the basic accountancy obligations of the Company such as certification, notarization and keeping of official books (general ledger, inventory register etc.). The accountant may also provide payroll services for the employed personnel. In this respect, we work with our certified public accountants who offer a wide tax expertise.

Post-Incorporation

As in the case with the establishment procedure, we also offer services and consultancy after the completion of the formation process. Some of the transactions to be fulfilled at this stage are as follows;

1. Signature Circular

Following the incorporation, signature circular of the company shall be issued before the Notary Public, by the authorized signatories of the company.

2. Tax Account Opening

An officer from tax office will inspect the business address of company and will prepare a record in the presence of the General Manager or authorized signatory. This inspection usually takes place within approximately 3-5 days after the application to tax office. After the inspection of tax officer, tax plate of the company will be issued.

3. Bank Account

There is no standard procedure for bank account opening, since the rules may vary between different banks in Turkey. We will be opening the company account prior to the registration, before the desired Bank.

4. Notification to Foreign Investment General Directorate of Undersecretariat of Treasury ("FIGD")

Since the targeted company is considered as a "foreign investment" when foreign individuals/institutions are involved, required notifications to the FIGD shall be made.

5. Workplace Permit

The competent municipality issues "workplace permit" for business operations of the company, upon application with the required documentation.

6. Workplace Insurance Registry Number & Notification to Social Security Directorate

In case the company employs any personnel in Turkey, a workplace number shall be obtained and relevant notifications shall be made to the Social Security Directorate.

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