Foreign Investor Guide to Company Formation in Turkey

Turkey has become an attractive destination for foreign investors with its geo-strategic location, qualified workforce, and growing domestic market. The number of foreign-capital companies in tourism, real estate, technology, and services sectors, particularly in Antalya, continues to rise. While the company formation process for foreigners in Turkey runs relatively orderly and quickly, choosing the right company structure and meeting compliance obligations fully prevents tax, legal, and operational issues later. This guide explains basic steps and key considerations.

General Framework of Foreign Investment

Turkey generally encourages foreign investment; under the direct foreign investment law, foreign-capital companies receive equal treatment with Turkish companies. In this framework, foreign investors may:

• Establish 100% foreign-capital companies,
• Become partners in Turkish companies,
• Open branches, liaison offices, or representative offices,
• Freely buy and sell company shares.

Additional permissions or restrictions may exist in some strategic sectors (defence, telecommunications, energy, media).

Company Types

Two company types most preferred by foreign investors in Turkish law:

Limited Liability Company (LLC)

• Flexible structure — suitable for small and medium-sized enterprises,
• Limited number of partners,
• Simpler and lower-cost formation,
• Relatively low capital commitment,
• Simple management structure.

Joint Stock Company (JSC)

• Scaled structure — suitable for large investment, IPO plans,
• Easy share transfer,
• Board of Directors structure,
• Higher capital requirement,
• Registered capital system possible.

Branch

A branch is extension of a foreign company in Turkey. The branch has no legal personality; it is legally one with the parent company. This creates different consequences for tax and liability.

Liaison Office

Liaison office is one that cannot conduct commercial activity in Turkey, only support activities like market research, coordination, promotion. Tax-advantageous since it cannot generate income; however, inability to make commercial sales is its main limitation.

Typical Company Formation Process

Step 1: Determining Company Type and Structure

By investor's purpose:

• Activity area,
• Partner structure (foreign/local, natural/legal person),
• Capital,
• Management model

are determined. At this stage, getting tax advisory together with legal advisory is important for right decision.

Step 2: Tax Number for Foreign Partners

Foreign natural or legal persons forming or partnering in a Turkish company must obtain Turkish tax number. Process is fast; completed quickly with passport or foreign company documents.

Step 3: Articles of Association

The company's articles of association are prepared. In this document:

• Company name, address, activity area,
• Capital amount and share distribution,
• Management structure, persons authorised to represent,
• Profit distribution and other internal arrangements

are included. Notary certification or consular authentication is required for foreign partners' signatures; apostille and sworn translation are required for foreign legal-person partners.

Step 4: Registration

Articles of association are registered at Trade Registry Directorate. Registration certificate:

• Establishes company's legal personality,
• Forms basis for tax office registration,
• Required for opening bank account,
• Published in Turkey Trade Registry Gazette.

In Antalya, Trade Registry Directorate processes can complete within days; electronic application via e-Registration is also possible.

Step 5: Tax Registration

By application to tax office:

• Company tax number,
• VAT obligation,
• Withholding obligation

are established. Inspector visits workplace for actual operation check.

Step 6: SGK and Employee Records

If company will employ workers, SGK employer registration is opened and employee declarations submitted.

Step 7: Bank Account and Capital Investment

Bank account is opened in company's name; committed capital is deposited to this account via bank. For foreign investment, Currency Purchase Document must be recorded — this is important for future profit transfer.

Tax Obligations

Newly formed company is subject to following main tax obligations:

Corporate Tax

Paid on company earnings; rate determined by prevailing legislation. Reduced rates apply in certain sectors and investment types.

VAT (Value Added Tax)

Tax calculated, collected, and offset on goods and services transactions. Monthly VAT declaration is mandatory.

Withholding

Tax deducted from employee salary, rent, freelance payment, and similar items.

Stamp Duty, Income Tax, and Others

Applies to contracts, payroll, invoices.

Working with an accountant is mandatory for tax and bookkeeping follow-up.

Employee Hiring: Foreign Personnel Topic

Foreign-capital company can hire Turkish or foreign workers. For foreign worker:

• Work permit application must be filed,
• Domestic employment ratios must be respected,
• Foreign worker's wage conditions must comply with regulation.

Work permit details are a separate compliance topic and require careful planning.

Investment Incentives

In Turkey, incentive certificate can be obtained for investments in certain sectors, regions, and sizes. Incentives can include:

• Tax reduction,
• Insurance premium employer share support,
• Investment site allocation,
• Interest support,
• Customs duty exemption.

In provinces with strong tourism and agriculture sectors like Antalya, incentives are configured differently.

Common Mistakes for Foreign Investors

1. Wrong company type selection — converting later becomes difficult,
2. Insufficient regulation of partnership relationship in articles of association — creates dispute later,
3. Capital entry without DAB document — issue in profit transfer and citizenship application,
4. Narrow definition of activity area — re-registration required for new business lines,
5. Formation without tax planning — unnecessarily high tax cost.

Post-Formation Compliance

After company formation:

• Monthly and annual tax returns,
• SGK and employee declarations,
• Annual general meetings (for joint stock companies),
• Trade registry updates,
• KVKK compliance processes,
• Possible incentive certificate follow-up

must be conducted regularly.

Legal Support

For foreign investors wishing to form companies in Turkey in Antalya, MONA HUKUK provides integrated advisory from company type selection to registration, from tax planning to employee hiring. With our accountant network, by managing legal and fiscal processes under single coordination; we aim for investor's safe and rapid entry into Turkish market.

Contact us at contact@monahukuk.com or call +90 (242) 606 14 32 to schedule a consultation in Antalya.