Turkey is a strategic bridge between Europe and Asia, providing access to markets in the Middle East, Europe, and North Africa. Its geographical location offers advantages for logistics, transportation, and extensive trade.
It is one of the largest economies in Europe, with a large domestic market, developed infrastructure, energy resources, low labor costs, and real estate opportunities. In recent years, steps have been taken in its jurisdiction to simplify business registration procedures and improve the business climate, including reducing bureaucracy, enhancing the legal system, and stimulating foreign investment.
Collectively, these factors make Turkey an attractive jurisdiction for company registration and business development, offering a wide range of opportunities and potential for success in various industries.
In Turkey, the establishment of companies is regulated by the following legislative acts:
In Turkey, several types of companies can be established, and the choice of a specific type depends primarily on the investor's goals and needs. The main types of companies that can be formed in Turkey are:
Non-residents most commonly incorporate Limited Liability Companies and Joint-Stock Companies, which provide flexibility in ownership and control of the company.
Turkey has a fairly simple and common tax system. Resident companies pay taxes on their worldwide income, while non-resident companies only pay taxes on their local income in Turkey. A company is recognized as a resident if it has a legal address or local management in Turkey.
Corporate tax is set at 20%. It is paid on optimized profits, which means operational expenses are deducted from the revenues. The financial sector, including banks and insurance organizations, faces an increased rate of 25%.
Value Added Tax (VAT) has a standard rate of 20%, while other rates depend on the category of goods or services (1%, 10%). VAT is not applicable when receiving payments from abroad; it is only considered when working with Turkish companies. VAT reports are submitted monthly.
Dividends are taxed at 15%. Dividends from Turkish companies are exempt from taxation, and there are also certain exemptions for foreign dividends based on bilateral agreements.
Royalties are subject to a 20% tax rate.
It's important to note that companies are required to pay taxes even when they are not engaged in any activities or earning income. Thus, Turkey has established minimum tax contributions, sometimes referred to as stamp duties, which are paid by legal entities with zero balance:
The country imposes certain restrictions on currency transactions. Specifically, rules and limits on currency exchange for individuals and legal entities are regulated, and there are restrictions on the ownership, sale, and transfer of foreign currency for investment purposes.
Additionally, currency loans are available only to companies, and all transactions between Turkish residents must be conducted in the national currency.
Moreover, all Turkish banks report currency operations and accounts in foreign currency.
Turkey has an extensive range of double taxation agreements, which significantly reduce the tax burden. Agreements have been signed with 87 countries, including Ukraine.
Please note the following features regarding company registration in Turkey. The founding documents, including the articles of association and the minutes of the founding meeting, must be prepared in the form of a notarial deed. Usually, a local notary handles the preparation and formalization of these documents.
After registering the legal entity with the Trade Registry of Turkey, the company must undergo the procedure of tax registration and obtain a taxpayer identification number (Vergi Kimlik Numarası) from the tax office (Gelir İdaresi Başkanlığı).
It is also important to know that after opening a bank account in a Turkish bank, the company must provide proof of the account opening to the local tax office.
If you wish to successfully establish a business in Turkey and avoid concerns about the documentation and ongoing support, please seek the qualified assistance of our lawyers at +38098-737-88-88.
The cost of registering a company in Turkey is determined specifically for each business and its features, so get the final price in a commercial offer after all the details have been clarified by our lawyer.