Introduction
With the acceleration of the globalization process, Turkey has become an attractive country for foreign investors thanks to its strategic location, young population, and developing market structure. The establishment of foreign companies in Turkey has been both secured from the perspective of Turkish law and regulated in accordance with international investment principles. Within this scope, the processes of foreign investors establishing a company in Turkey are determined by the Law on Direct Foreign Investments No. 4875, the Turkish Commercial Code (TCC), and relevant secondary regulations.
Law on Direct Foreign Investments
Law No. 4875 regulates that foreign investors have equal rights and obligations with domestic investors in Turkey, forming the basis of investment freedom. Within this framework, it is free for foreigners to establish a company, become a partner, or open a branch in Turkey; foreign capital can freely enter and leave the country, and income such as profit and dividends can be transferred abroad. In addition, except for sectoral exceptions, there is no prior permission requirement for foreign company establishment, which makes the investment process simpler and faster.
Establishment of a Foreign Company in Turkey
Company establishment in Turkey can be done under the TCC through joint-stock, limited, collective, limited partnership, and cooperative companies, as well as ordinary company types in the TCO. In practice, joint-stock and limited companies are mostly preferred.
A joint-stock company can be established with one or more real or legal persons, and the liability of the partners is limited to their capital shares. The minimum capital is 50,000 TL. There is a general assembly and a board of directors, and the transfer of shares is subject to the approval of the general assembly. A limited company can be established with one or more real or legal persons, and the liability of the partners is limited to their capital shares (minimum capital 50,000 TL).
In both companies, there is no requirement for partners or managers to be Turkish citizens. Other company types are mostly of the nature of personal companies and their establishment and liabilities are different. Foreign investors must prepare their documents before establishment and apply through MERSIS.
Establishment Process
• Articles of Association and Signature Declarations
At the establishment stage, the company’s title, headquarters, field of activity, capital, and share distribution are determined. In addition, the duties and obligations of managers and representatives, as well as partners, are included in the agreement. Signature declarations of company officials are prepared and approved by the relevant authorities. This step allows the company to be officially represented.
• Capital Transactions and Competition Authority Share
0.04% of the company’s capital must be deposited as the “Competition Authority Share” into the relevant bank account of this authority. In addition, in joint-stock companies, at least 25% of the cash shares committed must be deposited into a bank account opened in the company’s name before the company registration.
• Application for Registration at the Trade Registry Office
If the founders apply to the registry office with the relevant documents, the trade registry office completes the registration process. In addition, the commercial books that joint-stock, limited, and cooperative companies will keep are approved by the trade registry office. After registration, they are delivered to the relevant party. By being registered in the trade registry, the company gains legal personality. Afterwards, a work permit may need to be obtained for foreign partners.
Then, Certification of Legal Books and Preparation of Signature Circulars are required.
Sectoral Restrictions and Special Permissions
In some sectors (e.g., banking, energy, defense), special permissions or licenses may be required to establish a company. It is important for investors to coordinate with the relevant ministry or regulatory authority, obtain the permissions in advance, and plan their applications accordingly. For example, in the banking sector, BRSA approval is required; in the energy sector, EPDK approval is required.
Conclusion
The establishment of foreign companies in Turkey can be carried out very quickly and transparently thanks to modern and investment-friendly legislation. The equal rights of foreign investors with domestic investors, the freedom of capital transfer, and the digitization of the company establishment process are factors that strengthen Turkey’s international investment environment. However, correct interpretation of the legislation and adherence to appropriate legal procedures at the establishment stage are important. Therefore, it is advisable for foreign investors to receive support from professionals who are proficient in both Turkish commercial law and foreign investment legislation.