A Guide On Setting Up a Limited Liability Company (LLC) in Turkey
Establishing LLC in Turkey, known as a “Limited Şirket” (Ltd. Şti.), involves several key steps. A limited liability company is a popular business structure for foreign investors due to its flexibility, limited liability, and relatively simple formation process. Here’s a step-by-step guide on how to establish a limited liability company:
1.Choose a Company Name
- The first step is to decide on a unique company name.
- The name must not conflict with existing businesses and should be approved by the Turkish Trade Registry Office (Ticaret Sicili).
- It is recommended to check the availability of the name via the Trade Registry’s online system.
2.Decide on the Company Structure
- A limited liability company must have at least 1 shareholder (can be an individual or a legal entity) and no more than 50 shareholders.
- The shareholders can be Turkish or foreign citizens.
- Minimum Capital Requirement: The minimum capital requirement for a limited liability company is TL 50,000 (Turkish Lira). However, the company must be fully paid-up in 24 months after the time of registration.
3.Prepare the Articles of Association
The Articles of Association (Ana Sözleşme) outlines the company’s internal rules and structure, including the following:
- Business objectives and activities
- Shareholders and their shares
- Capital structure
- Management and representation
This document must be signed by the company’s shareholders and must be submitted during registration.
4.Prepare Necessary Documents
For the registration process, you will need:
- Passport or Turkish ID of the shareholders and directors
- Proof of Address of shareholders (such as utility bills or lease agreements)
- Company’s Articles of Association (prepared and notarized)
- Tax Identification Number for all shareholders and directors (this can be obtained from the local tax office)
- Residence Permit for foreign nationals (if applicable)
- Signed Power of Attorney for the person who will handle the registration on behalf of the company
5.Open a Bank Account
- You must open a corporate bank account at a Turkish bank in the company’s name. The capital amount (TL 50,000) should be deposited in this account.
- The bank will issue a document confirming the deposit.
6.Register the Company
- With all the necessary documents (including the bank deposit confirmation, Articles of Association, and ID/passports), you can register the company at the Turkish Trade Registry Office in the city where your company will be based.
- The registration process also includes paying the registration fees and submitting the required paperwork.
7.Obtain a Tax Identification Number (TIN)
- After registration, the company will be assigned a Tax Identification Number (VKN) by the Turkish Revenue Administration (Gelir İdaresi Başkanlığı).
- This is essential for conducting business operations and filing taxes.
8.Notarize the Signature of Directors
The signatures of the company’s directors (if applicable) need to be notarized by the Trade Registry.
9.Social Security and Employee Registration (if applicable)
- If the company will have employees, it is mandatory to register the company with the Social Security Institution (SGK).
- You will need to submit a Notification of Employment for each employee and register the company for social security contributions.
10.Tax Registration
- Register the company for the relevant taxes (such as VAT, corporate tax, and income tax) at the local tax office.
- If your company will be liable for VAT, you must obtain VAT registration.
11.Obtain Necessary Permits or Licenses (if applicable)
- Depending on the type of business, you may need to obtain specific licenses or permits to operate (e.g., in industries like food, health, or construction).
- Check with the local authorities to see if any additional permits are required.
12.Register for e-Fatura and e-Defter
- Turkey requires some companies to use e-invoices (e-Fatura) and e-ledgers (e-Defter) for tax reporting.
- If your company’s annual revenue exceeds a certain threshold, you may need to register for these electronic systems to comply with tax regulations.
Key Considerations for Foreign Investors
- Foreign Ownership: Foreign investors can own 100% of a limited liability company, although certain industries (such as media, defense, or transportation) may have restrictions.
- Residence Permit: Foreign entrepreneurs wishing to live in the country and run their business may apply for a business residence permit once the company is established.
- Language: All official documents, including the Articles of Association, must be in Turkish. It’s advisable to have a legal expert or translator for assistance.
Costs Involved
- Notary Fees: The cost for notarizing the Articles of Association and signatures can vary.
- Trade Registry Fees: Registration costs depend on the city and size of the company.
- Legal and Consulting Fees: If you choose to hire a lawyer or consultancy, expect additional fees for their services.
After these steps are completed, your limited liability company will be legally registered and you can begin operating your business. Would you like further details on any of the steps, or need help with finding legal advisors or accounting services ?
Establishing LLC in Turkey is easy and fast for foreign investors. Please feel free to contact us for more information and further inquiries about our unique services. You can also subscribe to Tacirsoft Hukuk Bilgi Sistemi, that is Turkey’s only Corporate Law and Organized Industrial Zones Law database.