The Foreign Direct Investment Law of Türkiye is based on the principle of equal treatment, giving international investors the same rights and liabilities as local investors.
Türkiye has initiated reforms aimed at making it easier to do business in order to improve the investment environment by removing red tape in the establishment of a business and reducing costs and procedures. To that end, forming a company is now only done at Trade Registry Directorates, which are located in Chambers of Commerce and are designed to be a “one-stop shop.” The procedure can be completed in a single day.
If you are considering forming a new limited company for your commercial activities in Türkiye, you have come to the right place. On this page, we will go over how to set up a new limited company from scratch, as well as the stages of its establishment.
What is a Limited Liability Company (LLC)?
A limited company is one that has a fixed capital divided into shares and is only responsible for its debts with its property holdings. Limited Liability Company (LLC) is the most common type of business in Türkiye, as it is throughout the world.
Capital
Shareholders are responsible for capital debts incurred as a result of uncollectible public debts at the rate of their capital shares. The limited company’s capital must be at least 10,000 Turkish Liras. It is possible to pay off the entire cash capital brought in within 24 months of the company’s registration. The payment schedule can be specified in the company contract or determined by the board of directors.
Shareholders
An LLC shareholder can be both real persons and legal persons. Non-residents can also become shareholders of a Turkish LLC. According to Turkish law, the maximum number of shareholders for an LLC is 50 and the minimum is 1.
Director
Director is the one who constitutes the managing body of an LLC. A foreigner with a work permit in Türkiye can be appointed as director. A person who is not a shareholder of the LLC may also be appointed as a director.
Liability
Unless otherwise stated in the articles of association, an LLC’s liability for debts and obligations is limited to its assets. The shareholders are not liable for the LLC’s debts. However, there is an exception:
“The shareholders of an LLC are personally responsible for the public debts of the company. They are jointly responsible for the taxes in proportion to their shares in the capital. On the other hand, their responsibility towards the social security premium payments for the employees of the LLC is for the whole debt and not in proportion to their shares in the capital. However, such liability will only occur if such debts cannot be collected from the assets of the company.”
Articles of Association
The articles of association, which serve as the company’s constitution, must be prepared in order to establish an LLC. The following provisions must be included in the articles of association:
- The names and surnames of the founders, as well as their addresses and citizenship information
- The commercial name and the address of the company
- The main area of activity and subject matter of the company
- The capital of the company, number of shares, the nominal value of each share, how the capital will be subscribed
- The names, surnames, and nationalities of the director(s)
How to Establish an LLC Company in Türkiye?
In Türkiye, company formation establishment procedures can be completed in one hour if all necessary documents are submitted to the relevant trade registry offices. Establishment procedures are performed electronically on the Central Registry System (MERSİS).
The shareholders’ commercial name for the LLC must be submitted via MERSİS, and its approval will be taken in principle electronically. The commercial name must not be deceptive or offensive.
Once the articles of association have been attested by the trade registry office or a notary public, the company must apply to the relevant tax office for a potential tax identity number. This potential tax identity number is required for opening a bank account in order to deposit the Company’s share capital.
A letter must be obtained from the bank where the company’s subscribed share capital is deposited. This letter should include the company’s and its shareholders’ names, as well as the amounts deposited by each of them.
0.04% of the Company’s capital must be deposited in the bank account of the Competition Authority as a “Share of the Competition Authority.”
Documents Required for Registration of Limited Company
- Company agreement with approved signatures of founders
- Written statements of non-partner members of the board of directors that they accept this duty
- Signature declarations of company directors
- Document of payment indicating that the Competition Authority’s share has been paid
- In the case of a legal person on the board of directors, the name and surname of a real person determined by the legal person on behalf of the legal person and the notarized copy of the decision of the competent body for determination
- If any, valuation reports prepared by the court-appointed expert for the determination of the committed capital other than cash, the assets to be taken over during the establishment, and non-cash assets
- If capital other than cash has been committed, a letter is to be taken from the relevant registry stating that there is no restriction on the capital in kind
- If capital other than cash is committed, a document showing that the immovable, intellectual property rights and other values put as capital in kind are annotated to the registries in which they are registered
- If any, contracts with the company being established and with its founders and other persons about the establishment, including those related to the takeover of non-cash assets and corporation
Conclude
The registration of the LLC is announced in the Turkish Commercial Registry Gazette once the registration process is completed. Also, the LLC must be registered with the relevant tax and social security offices. For more information, check the website below: you can find it here.
Establish Your Company Faster!
If you want to establish a company in Türkiye, Gini Talent can help you quickly set up a company and start your operations in Türkiye. We also provide services to handle accounting, payroll, audit and reporting to the government authorities.
Our experts will assist you in avoiding risks that may arise if intricate processes and deadlines are not strictly followed, as well as saving you a significant amount of time and money.
