Step-By-Step Business Set-Up in Turkey
WHY WORK WITH VIYA TO SET UP YOUR BUSINESS IN TURKEY
ALL YOUR NEEDS
In 8 Steps: Start Your Business
8 Reasons to Invest in Turkey
TURKEY IS YOUR NEXT DESTINATION
-VAT refund for building, construction expenses.
-No customs duty for equipment, machinery.
-Corporate tax discount.
-Employer’s share of social security premium covered.
-Employee’s income tax is paid by government.
-Qualified personnel finding expenditures to be covered.
Turkey's Investment Zones
Technology Development Zones (TDZ) are areas designed to support R&D activities and attract investments in high-technology fields. There are 84 TDZs, of which 63 are operational and 21 have been approved and are currently under construction.
- Profits derived from software development, R&D, and design activities are exempt from income and corporate taxes until December 31, 2023.
- Sales of application software produced exclusively in TDZs are exempt from VAT until December 31, 2023. Examples include software for system management, data management, business applications, different business domains, the internet, mobile phones and military command and control systems.
- Remuneration for R&D, design and support personnel employed in the zone is exempt from all taxes until December 31, 2023. The number of support personnel covered by the exemption may not exceed 10 percent of the total number of those involved in R&D, though.
- 50 percent of the employer’s share of the social security premium will be paid by the government until December 31, 2023.
- Customs duty exemption for imported products and stamp duty exemption for applicable documents within the scope of R&D, design, and software development projects.
Free zones (FZ) are special sites deemed outside the customs area, although they are physically located within the political borders of the country. FZs are designed to boost the number of export-focused investments. There are a total of 19 Free Zones in Turkey located close to the EU and Middle Eastern markets, 18 of which are active and 1 is at the stage of establishment.
- 100% exemption from customs duties and other assorted duties.
- 100% exemption from corporate income tax for manufacturing companies.
- 100% exemption from value-added tax (VAT) and special consumption tax.
- 100% exemption from stamp duty for applicable documents.
- 100% exemption from the real estate tax.
- 100% income and corporate tax exemption for certain logistics services to be offered at the FZs, provided that they are export-oriented.
- 100% exemption from income tax on employees’ wages (for companies that export at least 85% of the FOB value of the goods they produce in the FZs.
- Goods may remain in FZs for an unlimited period.
- Companies are free to transfer profits from FZs to abroad as well as to Turkey, without restrictions.
- Exemption from title deed fees when acquiring and selling a property.
- VAT exemption during construction, design, settlement, and approval processes.
- Ready infrastructure exempt from VAT and other taxes.
- Import permit for second-hand, used machinery.
Organized Industrial Zones (OIZ) are designed to allow companies to operate within an investor-friendly environment with ready-to-use infrastructure and social facilities. Infrastructure provided includes roads, water, natural gas, electricity and other services. There are 331 OIZs in 80 provinces, 234 of which are currently operational, while the remaining 97 OIZs are being constructed.
- No VAT for land acquisitions.
- Exemption from real estate duty for five years starting from the date of completion of the plant construction.
- Low water, natural gas, and telecommunication costs.
- No tax is payable in cases of merging and/or separation of plots.
- Exemption from municipality tax for the construction and usage of the plant.
- Exemption from the municipality tax on solid waste if the OIZ does not avail of the municipality service.
Type of the Legal Entity
JOINT STOCK COMPANY
- Minimum 1 shareholder- unlimited maximum amount.
- Managed by appointed directors.
- Minimum Capital: ₺50,000.
- IPO-listing allowed.
- The company’s stock capital is divided into shares and the liability of the shareholders is limited to the subscribed capital and paid by the shareholder. A joint stock company can be established for any economic purpose that is not prohibited by law.
- There must be at least one shareholder (a real person or a legal entity) and a minimum capital of TRY 50.000 is mandatory; value per share cannot be less than TRY 0,01. At least 25% of the nominal value of the shares subscribed in cash must be paid before registration with the Trade Registry.
- Articles of association should include the trade name, list of shareholders, address and business purpose, the amount of capital and the amount subscribed by each shareholder, the amount of share capital, the nominal value of each share, the mode and terms of payments, the mode of convening the general meetings, dates and times of meetings, and conditions concerning voting. Articles of association either must be signed by the shareholders in the presence of trade registry officer or approved by a notary.
- Annual meetings must be held within 3 months of the end of the financial year and the board of directors calls the meeting. The quorum for an ordinary annual general meeting is 25% of shareholders, unless otherwise stated in the articles of association.
- Joint stock companies with more than 250 shareholders, or who issue stocks and bonds that are quoted in the stock exchange, are subject to the provisions of the capital market.
LIMITED LIABILITY COMPANY
- Minimum 1 shareholder- maximum 50 shareholders.
- Managed by the Board.
- Minimum Capital: ₺10,000.
- IPO-listing not allowed.
- A limited liability company is established with at least one shareholder (a real person or a legal entity); the liability of shareholders is limited to the subscribed capital and paid by the shareholder. The number of shareholders may not exceed 50. A limited liability company can be established for any economic purpose that is not prohibited by law.
- A minimum capital of TRY 10.000 is mandatory and value per share cannot be less than 25 TRY. All of the capital should be committed unconditionally by shareholders.
- Articles of association should include the trade name, list of shareholders, address and business purpose of the company, the amount of capital and the amount subscribed by each shareholder. Articles of association must be signed by the shareholders in the presence of trade registry officer.
- A limited liability company is governed by managers. At least one member of the partners must have the right to legally represent the company. The legal entity can be a manager, but must be represented by a real person, who must be registered. The responsibilities of manager start with legal establishment of the company. There are no restrictions on nationality or residence of managers.
- The annual partners’ meeting must be held within 3 months of the end of the financial year.
- Not considered a Turkish entity in the eyes of the legal system.
- Has to have parent company’s name & word “branch” in name.
- Subject to Ministry permit.
- A foreign company is required to obtain permission from the Ministry of Commerce and Industry to establish a branch in Turkey. A branch of a foreign entity is not a separate entity. Therefore, a branch has the same articles of association as its parent company, indicating the scope of activity of the Turkish branch.
- Every branch should use the name of the parent company and include the term ‘branch’. The branch is represented by a representative or branch manager with full authority, who resides in Turkey either as a Turkish citizen or as a foreigner with the appropriate work and residency permits.
- There is no minimum capital requirement for the establishment of a branch. While it must be funded by head office and is governed by the parent company’s internal regulations, a branch can act with some autonomy in its external relations.
- A branch is subject to corporate tax only for income generated in Turkey due to limited liability status. Furthermore, withholding tax is levied on after-tax branch profits remitted to headquarters.
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