Registration of a Local Company (Joint-Stock Company / Anonim Şirket) in Istanbul, Turkey. Service offer

The most optimal option is to register a joint-stock company (Anonim Şirket).

A joint-stock company (JSC) can be formed with one shareholder and one director. These positions can be held by foreign individuals. In accordance with Turkish law, one of the directors acts as signatory to the bank account.

Every company in Turkey must have a name. The requirements for the company name are as follows:

• it must be distinct from the names of all other companies;
• the name must contain a suffix denoting a company type: Anonim Şirket;
• it must contain a wording to indicate the business activity of the company (main business objective);
• the company name cannot contain the words such as Turkey or Turkish;
• the presence of foreign words in the company name is permitted unless such words contradict the law, the national, cultural and historical heritage of Turkey and where the name or brand promoting the goods or services constituting the business activity is in a foreign language or the investment is made by foreign shareholders;
• it is permitted to use one word in English, the rest of the name must be in Turkish.

• A Turkish JSC is managed by the board of directors appointed by the general meeting of shareholders.
• The director may be an individual or a legal entity, including a resident of another state.
• The Board of Directors consists of at least one member, but must include one of the founders of the business (shareholders). If such a director (authorised signatory) is a foreign citizen and does not reside in Turkey, he does not need to obtain a work visa in the case of an JSC, unlike with limited liability companies. However, if the director, being a foreign citizen, does reside in Turkey, having a work visa is mandatory (and the company will be subject to increased requirements for the size and payment of the share capital to apply for a work visa).
• The Board of Directors of a Turkish JSC decides all business matters other than those reserved to the general meeting of shareholders (by the JSC’s Articles of Association or by law).
• It should also be noted that the director of the company is liable to the government for the company’s debts.

• A shareholder can be an individual or a legal entity. There are no residency requirements.
• Liability of shareholders is limited to the capital commitment. However, the shareholders and directors are liable with their own assets for amounts owed by the company to government authorities that cannot be collected from the company itself(such as taxes, administrative fines and social security premiums).
• Shareholders are not publicly listed in the Trade Registry.
• Shareholders must annually hold a general meeting to approve accounts for the previous year.

• The minimum capital of a Turkish joint-stock company is TRY 50 000 (Turkish lira).
• 25% of the capital must be deposited in a company’s account (temporary account created prior to filing a company formation application with the Chamber of Commerce). The funds in this account can be freely used for JSC’s expenses after the company is formed.
• The remaining 75% must be paid in within 24 months.
• Shares with no par value and bearer shares are not permitted.

1. company name check;
2. entering the territory of Turkey;
3. obtaining a Turkish TIN (can be obtained remotely on condition of prior entry to Turkey);
4. depositing 25% of the capital in a temporary bank account (payment can be made from the founder’s account or in cash at the bank);
5. having the documents of the founder and director translated and certified at a local notary, issuing a power of attorney to a representative to perform the registration;
6. signing a lease agreement for the company’s office;
7. having the company registration documents submitted to the Chamber of Commerce by a representative by power of attorney;
8. signing an agreement and a power of attorney for accounting services to the company.

After electronic documents on company registration are received, one can start opening a bank account at a local bank. To start the procedure, the director must personally visit the bank together with a representative holding the power of attorney.

• Notarized and apostilled copy of the founder’s passport;
• Residential address of the founder in the country of nationality, as well as a notarized copy of the proof of this residential address (utility bill / national passport / ID card);
• 4 photos of the founder in electronic form or on paper;
• TIN of the founder;
• Email address;
• Telephone;
• Full name of the founder’s mother and father;
• Company name;
• Types of business activities (up to 5 activities can be specified);
• Office lease agreement.

*This list is made for the simplest case when a joint-stock company is registered with a single founder who will also be the JSC’s director. If the company has several founders and/or directors, the list of required documents and information will grow.

If not all the founders can be present at the registration of the company, at least the founder who will be appointed as director of the company is required to be present. The other founders will need to provide an apostilled set of documents.

• Notarized and apostilled articles of association of the company (if the founding company is incorporated in a state that is not party to the Hague Convention of 1961 on Apostille[1], consular legalization of the articles will be required);
• Resolution of the directors of the founding company to open a company (JSC) in Turkey;
• Resolution on appointment of a director in the new company;
• Consent of the individual who will be appointed as director of the new company;
• Power of attorney for a representative;
• Name of the new company;
• Types of business activities (up to 5 activities can be specified);
• Office lease agreement;
• TINs of the founder and of the director;
• Notarized and apostilled copy of the director’s passport;
• Notarized copy of the proof of the director’s residential address (utility bill / national passport / ID card);
• 4 photos of the director in electronic form or on paper;
• Residential address of the company director in the country of nationality, email and telephone.

It is possible to register a company without visiting Turkey – using an apostilled power of attorney issued to our employee.

The estimated time of company registration without a personal visit is 3-4 weeks.

A company is a resident of Turkey if its registered office or place of management is located in Turkey. Resident companies are taxed on their worldwide income, and non-resident companies – on income received in Turkey.

The standard corporate income tax rate is 20%. Certain groups of taxpayers may be subject to increased or, vice versa, reduced corporate income tax rates.

By default, all resident companies have an obligation to pay all types of taxes and fees, including VAT.

The standard VAT rate in Turkey is 18%. Reduced rates of 8% and 1% apply to certain goods and services.

Dividends are subject to withholding tax at a rate of 10%. This rate applies to dividends paid by a resident company to an individual (wherever resident) and a non-resident company. However, no withholding tax applies to dividends paid by a resident company to another resident company.

Royalties are subject to withholding tax at the rate of 20%.

Different tax rates apply to interest payments. For example, interest on bank loans granted by foreign banks is subject to 0% withholding tax, interest on other loans is taxed at the 10% rate, interest on deposits – at a rate from 0% to 18% (depending on the currency and period of the deposit). The tax rates may be reduced under double tax treaties (DTAs).

Stamp duty is levied on a variety of documents, including agreements and financial statements, at the rates ranging from 0.189% to 0.948%. Stamp duty is normally levied on salaries at the rate of 0.759%. In some cases, fixed duties in Turkish liras are charged.

Turkey has some restrictions on foreign exchange transactions. In particular, individuals are prohibited from attracting foreign-currency loans, and Turkish companies are subject to restriction on attracting such loans. Transactions between residents must be made in Turkish lira. Turkey also has a special levy on borrowings from abroad. The rate depends on the loan currency and period. The highest rate for borrowings in foreign currency for a period up to a year is 3% of the loan amount. This levy does not apply to banks or other financial institutions.

Turkish companies are required to keep accounting records and prepare financial statements in accordance with Turkish Financial Reporting Standards. Financial statements must be presented at the annual meeting of shareholders and need not be submitted to any government authorities.

Joint-stock companies are only subject to audit of their financial statements if they meet two of the following criteria in two consecutive financial periods:

• total assets are or exceed TRY 35 000 000;
• net annual sales are or exceed TRY 70 000 000;
• number of employees is or exceeds 175.

There is no requirement to file the annual return for Turkish companies. This return is usually prepared and filed annually by the company secretary. It normally includes: corporate identification data (date of registration, registered office address); details of the directors and their resignations; details of the secretaries and their resignations; information about the share capital, par value of shares, number of shares issued; details of the shareholders and share transfers.

As a general rule, the tax period for corporate income tax is the calendar year. The tax return is filed by the 30th day of the fourth month after the reporting period end-date (usually this is 30th April). Quarterly advance payments are made throughout the year. The final tax is paid on the tax return filing deadline date.

[1] It is a multilateral Convention that abolishes the requirement of legalization for foreign public documents.

[2] The fees are valid as of May 2023.

[3] An apostilled copy of the founder’s passport is required for the registration of a company (both remote and with a visit to Turkey), but the client can prepare it without our help.

[4] It is required in the case of remote company registration (without vising Turkey). The client can prepare an apostilled power of attorney and submit it to us (we will provide the required text of the power of attorney).

[5] The minimum fee for keeping accounting records and preparing financial statements for a Turkish company is USD 500 per month (this fee does not include the audit of financial statements).