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

Turkey has a civil law system, which has been wholly integrated with the continental European system. For instance, the Turkish civil law system has been modified by incorporating elements of the Swiss Civil Code, the Code of Obligations and the German Commercial Code. The administrative law bears similarities with the French counterpart and the penal code with the Italian counterpart.

The principal forms of business organization in Turkey

sole proprietorship;

partnership;

limited liability company;

joint-stock company;

сommandite company;

cooperative.

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

A joint-stock company can be formed with one shareholder and one director, and they might as well be foreign individuals. In accordance with Turkish law, one of the directors acts as signatory to the bank account.

Company Name

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

  • The company name must be distinct from the names of all other companies.
  • It must contain a company type as a suffix: Anonim Sirket.
  • 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 1 word in English, the rest of the name will be in Turkish.

Company structure

Director

  • A Turkish JSC is managed by the board of directors appointed by the general meeting of shareholders.
  • The director may be a shareholder of a JSC, an individual/legal entity, or an independent member of the board of a corporation, 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 (shareholder).
  • The quorum of a directors’ meeting is ½ of all the board members, which, in case of an odd number, is rounded up.
  • The Board of Directors of a Turkish JSC decides all business matters other than those reserved by the Articles of Association and the Law to the general meeting.
  • It should also be noted that the director of the company is liable to the government for the company’s debts, which does not affect the shareholders of the company.

Shareholders

  • 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 (such as taxes, administrative fines and social security premiums).
  • Shareholders are publicly listed in the Trade Registry.
  • Shareholders must annually hold a general meeting to approve accounts for the previous year.

Share Capital and Shares

  • The minimum capital of a Turkish joint-stock company is TRY 50.000 (approx. USD 3410).
  • 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 company expenses after the company is formed.
  • The remaining 75% must be paid in within 24 months.
  • Shares with no par and bearer shares are not permitted.

Company registration procedure (with personal visit)

  1. Entering the territory of Turkey;
  2. Obtaining a Turkish TIN (obtained remotely, after entering Turkey);
  3. Depositing 25% of the capital in a temporary bank account (payment can be made from the founder’s account / in cash at the bank);
  4. 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;
  5. Having the company registration documents submitted to the Chamber of Commerce by a representative by power of attorney;
  6. Preparing a set of apostilled corporate documents after they are received from the Chamber of Commerce.

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.

Documents for JSC registration

  • Notarized copies of the founders’ passports;
  • 4 photos;
  • TIN of the founder;
  • Office lease agreement;
  • Company name;
  • Types of business activities (up to 5 activities can be specified);
  • Residential address in the country of nationality;
  • Email address;
  • Telephone.

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.

Documents for registration with a legal entity as a founder

  • Notarized and apostilled articles of association of the company (an apostille is needed if there is an agreement on apostille in place between the countries, if not, then they must be certified at the embassy);
  • Resolution of the directors of the company to open a company in Turkey;
  • Resolution on appointment of a director in a new company;
  • Consent of the individual who will be appointed as director of the company;
  • Power of attorney for a representative;
  • 4 photos in electronic form or on paper;
  • TIN of the founder;
  • Company name;
  • Types of business activities, up to 5 activities can be specified;
  • Residential address in the country of nationality, email and telephone (of an individual who will be appointed as director of the company).

Remote company registration

It is possible to register a company without visiting Turkey – using an apostilled power of attorney issued to a representative of a local service provider.

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

Subsequent administration of a company

Corporate Income Tax

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

All profits derived from the earning of income are included in taxable income, except for dividends qualifying under the participation exemption. Expenses incurred in the course of business are generally deductible.

The standard corporate income tax rate as at 2022 is 23%.

VAT

The standard VAT rate is 18%.

Reduced rates of 8% and 1% apply to certain goods and services.

Withholding Tax

Dividends are subject to withholding tax at a rate of 15%. Royalties are subject to withholding tax at the rate of 20%. Different tax rates apply to interest payments. For example, interest on bank loans 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 are reduced under double tax treaties (DTAs).

Stamp Duty

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 generally levied on salaries at the rate of 0.759%. In some cases, fixed duties in Turkish liras (TRY) are charged.

Exchange Control

Turkey has some restrictions on foreign exchange transactions. In particular, individuals are prohibited from attracting foreign-currency loans, and Turkish companies are restricted from attracting such loans. Transactions between residents must be made in Turkish lira (TRY). 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.

Audit and Accounts

Financial Statements

Turkish companies are required to annually prepare financial statements and present them at the annual meeting of shareholders. Financial statements must be drawn up in accordance with the requirements of the Turkish Commercial Code and Turkish Accounting Standards. They need not be submitted to the Registry.

Audit

Limited liability companies/joint-stock companies are only subject to audit if they exceed two of the following criteria in two consecutive financial periods:

  • Total assets: TRY 150 million +
  • Net sales: TRY 200 million +
  • Number of employees: 500+

Annual Return

It is prepared 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.

There is no requirement to file the annual return for Turkish companies.

Tax Returns

Generally, 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.

Fees*

Services
Fees, USD
Registration of a Joint-Stock Company
Includes:
Ø Payment of fees to the Trade Registry
Ø Registered agent services:
- Registration of a company with 1 business activity;
- Preparation of notarization of the Articles of Association in accordance with the Turkish Commercial Code;
- Making of all necessary documents for submission to the Trade Registry;
- Approval of the company’s legal books by the Istanbul Chamber of Commerce;
- Preparation and notarization of the signature Circular for a company in Turkey;
- Notarization and translation of documents for 1 individual;
- Provision of a registered office address for 1 year;
- Preparation of an apostilled set of corporate documents.
Other options are available upon request
7 100
Registration of a Joint-Stock Company with a legal entity in its structure
8 250
GSL fee for finding an office for a company and registering the lease agreement with the authorities
10% of the rent (one-time fee)
Virtual registered office address
990 +18% VAT per year
Assistance with opening a local bank account
3 950
Adding a new director to the company
950
Adding a new founder to the company
850
Adding a new business activity
650
Compliance fee
Payable in the cases of:
- renewal of a company,
- liquidation of a company,
- transfer out of a company,
- issue of a power of attorney to a new attorney,
- change of director/shareholder/beneficial owner, except the change to a nominee director/shareholder)
250 (standard rate, includes the check of 1 individual);
+ 50 for each additional individual (director, shareholder, or beneficial owner) or legal entity (director or shareholder) if such legal entity is administered by GSL;
+ 100 for each additional legal entity (director or shareholder) if such legal entity is not administered by GSL;
350 (rate for high-risk companies, includes the check of 1 individual)
Keeping the company’s accounting records.
Maintaining a systematic archive of company documents and providing them to the client upon request
Upon request
Preparing financial statements, conducting an audit, and submitting financial statements to the Regulator
Upon request
Tax advice on VAT and other matters
300 / hour

*The fees are valid as at the date of sending of the offer. The stated cost of creating a company is approximate. The cost may even be slightly smaller than indicated, which will largely depend on the number of pages for translation and notarization.

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7100 USD
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