The terms of incorporation and share transfer are the same as those applied to local investors. Accordingly, international investors can establish all types of companies specified in the Turkish Commercial Code (TTK). TTK; It offers a corporate governance approach that meets international standards, encourages private equity and public offering activities, provides transparency in management transactions, and aligns Turkey’s business environment with EU legislation and the EU accession process.
Turkey has taken the ease of doing business as a basis with the reform to improve the investment environment, and thus the bureaucracy in company establishments has been removed, and the costs and procedures have been minimized. In this direction, company establishments are now carried out only in Trade Registry Offices operating in Chambers of Commerce and designed as a “one-stop office” and can be completed within the same day.
Company Establishment with Foreign Partners
Basically, for each company establishment, the title of the company, the scope of its field of activity, its headquarters, who will be the manager/representative, capital and shares must be determined. By opening a bank account on the potential Tax ID (which will depend on the type of company and the amount of capital) 1/4 (25%) of the New Partnership capital (excluding the limited company) should be deposited into this account.
Company documents must be registered in the central registry system (MERSİS) and an application must be made to the trade registry directorate regarding the documents listed below:
As can be seen at this point, since the originals of the documents to be submitted for real persons with foreign citizenship and legal entities residing in these countries will be issued outside of Turkey, the apostille annotation of these documents must be obtained and their translations must be approved by the consulate or notary public. For company partners who are not Turkish citizens, a potential tax number should be obtained from the relevant tax office.
Let’s Follow the Legal Processes in Company Establishment
The main legislation on foreign investment is Law No. 4875 on Foreign Direct Investments. [one]. With its adoption and entry into force on 17.06.2003, the current legislation on Foreign Direct Investment clearly guarantees two principles: freedom to establish commercial enterprises and equal treatment, according to article 3(a) of the Law on Foreign Direct Investments:
Foreign direct investment in Turkey by foreign investors is free.
Foreign investors are subject to equal treatment with domestic investors” Prior to the enactment of Law No. 4875, foreign investors who wanted to establish a business in Turkey were subject to Law No. 6224 on the Incentive of Foreign Capital. According to the old legislation, which was abolished by Law No. 4875, foreign companies were subject to a series of strict opening procedures.
Among the most controversial were the pre-approval from the Department of the Treasury and a capital requirement of US$50,000 per foreign partner. In addition, the law numbered 4875 removed the restriction on the commercial activities of foreign investors. Previously, foreign investors were allowed to form joint stock companies, Limited Liability Companies and Branches. As a result of Law No. 4875 and importantly, with the reforms envisaged in the new Turkish Commercial Code, foreign investors, regardless of having a legal personality, can establish any company and engage in commercial activities in Turkey.
Being a citizen of Turkey, which has a more effective administration on the one hand and political stability on the other, means being a partner in this success story.
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