Turkey spans Europe and Asia. It is a top business and investment hub with longstanding trading traditions. Its economy is diverse, with strong industry, agriculture, and tourism. Business services and banking have expanded recently.
Advantages of Turkey for Business
Turkey encourages foreign investment. Registering and managing a company is straightforward. Foreigners have the same rights as Turkish residents. The standard corporate tax is 25%. Personal income tax (PIT) can reach 40%. VAT is 20%. Turkey’s financial sector is well-developed. Local banks open accounts for non-residents (individuals and legal entities).
Key features of doing business in Turkey:
- Developed logistics
- No residency conditions for key company personnel
- Tax incentives and privileges
- No substance requirements (no real economic presence required)
- You can set up a company in Turkey remotely using a power of attorney
- Investment residence permit is available (this option applies to Russian nationals)
- “Shelf” entities (created for later resale) are banned. Only new legal entities are allowed
- A legal entity cannot serve as a company director
- Officer registers are public (includes shareholders and beneficiaries)
Conditions for Registering a Company
Registration rules vary by legal form. Foreigners enjoy equal rights to Turkish nationals. Company formation in Turkey takes at least two weeks with our help. Opening a corporate bank account needs at least three weeks.
Corporate Requirements
| Criterion | Value |
|---|---|
| Shelf (ready-made) companies | Prohibited |
| Nominee service | Neither banned nor allowed |
| Registered address | Must be a physical address, not a virtual one. PO boxes or mailbox formats are prohibited. |
Forming the Share Capital
| Criterion | Value |
|---|---|
| Declared capital, paid-up capital | 50 thousand TRY (LLC), 250 thousand TRY (JSC) |
| Bearer shares or no-par-value shares | Prohibited |
Key Company Personnel in Turkey
| Criterion | Value |
|---|---|
| Director | Mandatory, any residency, individuals only, data appears in public sources |
| Secretary | Optional position, any residency, no qualification requirement, individuals only |
| Shareholders | Information is in public registers, any residency, can be individuals or legal entities |
| Beneficial owner | Data is private, beneficial owners can be individuals or legal entities |
Company Formation in Turkey
This process follows standard steps. Non-residents must fulfil typical requirements only. Specific details vary by business type and location (mainland or Free Zones). AML and CTF compliance is mandatory.
Roadmap for company formation in Turkey:
- Choose mainland or Free Zone registration
- Select a legal form
- Define the share capital, management, and share allocation
- Appoint the director (and secretary, if needed)
- Select the shareholders
- Reserve the company name
- Prepare and notarise documents, with translations if required
- Pick an office
- Get tax numbers for all founders
- Pay registration fees and await the registrar’s decision
After launching your company in Turkey:
- Register with the tax office
- Open a corporate account (banks, neobanks, or payment systems)
- Obtain any licences or permits
Taxation
Turkey is an onshore jurisdiction with possible tax breaks if certain conditions apply. It has 85 Double Tax Conventions. Turkey signed but not ratified MLI BEPS. It also follows CRS MCAA for automatic data exchange.
Personal taxation notes:
- Residents pay tax on global income. Non-residents pay only on Turkish income
- Progressive personal income tax rates
- Deductions and allowances apply
- No special regime for expatriates
- Some income sources incur withholding tax (0% to 20%)
Personal income tax rates in Turkey (excluding unearned income):
| Income Range (thousand TRY) | Tax (thousand TRY, % for amounts above threshold) |
|---|---|
| 0–158 | 0 (15%) |
| 158–330 | 23.7 (20%) |
| 330–1200 | 58.1 (27%) |
| 1200–4300 | 293 (35%) |
| Above 4300 | 1378 (40%) |
Corporate taxation in Turkey:
- Financial firms pay 30% on profits. Standard rate is 25%
- Taxable profit is net accounting profit minus deductions, allowances, and carried-over losses
- Resident companies pay tax on global income. Non-residents pay only on Turkish-sourced profits
- You tally 25% of adjusted profit or 10% of profit (before standard deductions), then pay the higher amount
- No municipal tax applies to corporate income
Corporate taxes in Turkey:
- Standard VAT is 20%. Reduced rates of 1% or 10% may apply
- Import VAT can be 1%, 8%, or 18%, depending on goods
- Some goods incur a special consumption tax, based on GTIP codes
- Stamp duty ranges from 0.189% to 0.948% of the document’s stated value
- Some foreign-currency loans may trigger the RUSF (Resource Utilisation Support Fund)
- Employers pay 20.75% social security plus 2% unemployment contributions
Company Reporting in Turkey
Companies must file reports. Accounting follows Turkish Accounting Standards (TMS) and International Financial Reporting Standards (IFRS).
Main reports:
- Balance sheet
- Profit and loss
- Cash flow statement
- Changes in equity
Companies need an audit if, over two consecutive years, they meet two of these three criteria:
- Assets of at least 35 million TRY
- Annual net sales from 70 million TRY
- Over 175 employees
Companies under the Capital Markets Board must also be audited. Late filings can incur fines of at least 50% of unpaid tax.
Contact us for a personal consultation on company formation in Turkey.