Business Registration in Turkey: Setting Up Your Business with GEOS

This article is apart of our weekly series associated with the The Global Subsidiary Index. The series is designed to help businesses identify the best countries for establishing a subsidiary based on key operational factors. GEOS provides a data-driven ranking of jurisdictions worldwide, assessing across 40+ criteria to bring you insights into global expansion opportunities.

Each country on the index is scored on an overall score out of 100, with each individual criterion out of 5 or 10. Higher scores indicate a more favorable environment for businesses. By leveraging these insights, companies can make informed decisions on where to establish a legal presence.

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Starting a company in Türkiye places you right at the junction of the Balkans, Caucasus, Middle East, and eastern Mediterranean. It’s a unique spot that connects you to major markets in every direction. At its heart is Istanbul, the only city in the world that spans two continents and serves as Türkiye’s economic and cultural hub.

The economy is pushing hard on digital growth. High-tech exports are nearing $10 billion, with a target of $117 billion by 2025. IT services are set to grow steadily through 2029, adding even more strength to a diverse market.

In this guide, we’ll cover Türkiye’s advantages, industry hotspots, regulatory requirements, and cultural insights. We’ll also show how GEOS can help you set up quickly and run smoothly from day one.

Why Should You Expand to Türkiye?

If you’re thinking of starting a company in Türkiye, there are a few things you’ll want to keep in mind before making the move.

A Strategic Bridge Between Europe and Asia

Türkiye sits where Europe meets Asia, giving businesses a direct link to both regions. Its position between Russia and the Mediterranean boosts its importance in trade and energy transit.

A wide range of commercial activities is possible in Türkiye, including establishing companies, joint ventures, branch offices, and liaison offices. Businesses must follow specific legal and regulatory procedures, such as licensing and registration, to operate within the country’s framework.

The country has a large, growing market and a young, skilled workforce. These factors drive innovation and open doors for new investment. Key sectors like automotive, textiles, agriculture, and construction materials provide resilience and strong export potential.

Opportunities include:

• Access to European, Middle Eastern, and Central Asian markets.
• A diverse economy with strong manufacturing and export capacity.

GDP growth remains steady despite global volatility. Urban centers offer solid consumer demand, even with moderate purchasing power overall.

Challenges exist. Political shifts, high inflation, and policy unpredictability require careful planning. Yet, the government’s reforms, infrastructure spending, and focus on green transformation aim to boost competitiveness.

Favorable & Challenging Financial Conditions

Starting a company in Türkiye offers clear advantages but also presents a few challenges. Most companies pay a corporate income tax rate of 25%, while those in the financial sector face 30%.

From January 2025, a new minimum tax rule will apply, ensuring at least 10% of income is taxed before certain deductions and exemptions. Businesses must calculate their liability under both methods and pay whichever amount is higher. With no provincial or municipal corporate taxes, the system is simpler than in some other markets.

Operational costs are competitive compared to Western Europe, which appeals to cost-conscious businesses. Still, currency swings and shifting banking regulations can make planning more difficult. Consultancy fees, along with legal and accounting costs, are part of the overall expenses for business registration in Turkey.

Foreign ownership is generally welcome, although certain sectors still require special approvals. Annual UBO declarations are mandatory for companies and specific entities, focusing on:

• Individuals with more than 25% ownership or ultimate control.
• Top executives when no clear beneficial owner is identified.

Türkiye’s financial systems are reliable, with the Central Bank’s electronic funds and securities networks handling most transactions efficiently. However, market volatility and regulatory changes can sometimes cause disruptions.

Business Entity Options in Türkiye

When starting a company in Türkiye, foreign investors have several business entity options to choose from, each with its own advantages and requirements.

The most popular choice is the limited liability company (LLC), which is favored for its flexibility and straightforward structure. Limited liability companies in Turkey can be established with as few as one shareholder and up to 50, making them ideal for both small and medium-sized enterprises.

For larger ventures or those planning to access capital markets, the joint stock company (JSC) is a preferred structure.

Joint stock companies require at least five shareholders and offer the ability to issue shares and list on the stock market, making them suitable for businesses with growth ambitions.

Both LLCs and JSCs are governed by the Turkish Commercial Code, which sets out the legal framework for company registration, minimum capital requirements, and ongoing compliance.

Foreign companies looking to conduct business in Turkey can also establish a branch office or a wholly owned subsidiary. These entities must be registered with the relevant trade registry office, and their formation is officially recorded in the Turkish Trade Registry Gazette.

The registration process ensures that all legal entities, whether domestic or foreign, meet the necessary requirements for minimum capital and corporate income tax obligations. This transparent system helps attract foreign investors by providing a clear path to establishing a company in Turkey and participating in its dynamic economy.

Company Registration, Incorporation & Compliance Essentials

Starting a company in Türkiye means meeting clear governance and compliance requirements. Some steps are simple, while others require more time and preparation.

Business registration in Turkey involves following specific legal procedures, preparing the required documentation, and utilizing digital registration platforms such as MERSIS to officially establish your company.

Limited Liability Company Directors and Governance

Every company must have at least one director, earning Türkiye a Resident Director Score of 3/5. There’s no nationality requirement, and directors can be individuals or legal entities. If a legal entity is appointed, it must name a real person to act on its behalf. 

A shareholder must be appointed to manage and represent the company. Appointing or removing directors requires notarized shareholder resolutions and filings with the Trade Registry. Directors hold broad management powers unless limited by the articles of association, and these powers can be shared or delegated internally.

Registered Address

A registered business address is mandatory, and the process is straightforward, reflected in a Registered Address Score of 4/5. However, the location you choose can affect licensing and regulatory approvals, so selecting the right address early helps avoid later complications.

Paperwork and Documentation 

Document preparation can be one of the more time-consuming steps, which is why Türkiye’s Original Paperwork Score is 2/5.

The required documents for company registration, bank account opening, and establishing different types of business entities in Turkey typically include notarized passports, proof of address, tax identification numbers, articles of association, and board resolutions.

The country requires extensive notarization and apostilles for incorporation documents, board resolutions, and certain contracts. Building extra time into your setup plan is essential to avoid registration and licensing delays.

Tax Registration and Compliance

All companies must register for corporate tax and VAT, giving Türkiye a Tax Registrations Score of 3/5.

This process includes obtaining a Tax Identification Number (TIN), registering with the Trade Registry and the relevant tax office, and filing a tax registration form with notarized supporting documents. Obtaining a tax number is essential for opening bank accounts and fulfilling tax obligations.

Once registered, businesses must display their tax certificate and meet ongoing obligations, including timely tax filings, accurate recordkeeping, and prompt payments. The relevant tax office is responsible for company tax registration and managing official correspondence after registration.

Türkiye’s tax system covers corporate income tax, VAT, and other levies such as withholding tax on dividends, interest, royalties, rental income, and professional services.

Compliance is strict, and penalties apply for late or inaccurate filings. The tax implications of different business structures should be carefully considered, as the legal form of the company impacts both taxation and liability for shareholders.

Opening a Bank Account in Türkiye

Setting up a bank account is a fundamental step for starting a company in Türkiye. It enables fast, reliable transactions and keeps you compliant with local regulations.

For a limited liability company, opening a bank account requires submitting all the necessary documents, including the trade registry certificate and tax identification number, to a local financial institution. This account will be used for depositing the minimum share capital—currently set at 10,000 TL for LLCs—and for managing day-to-day business expenses, payroll, and tax payments.

Foreign companies establishing a presence in Turkey, whether as a branch office or subsidiary, must also open a bank account. In these cases, additional documentation is required, such as the parent company’s registration documents and a notarized power of attorney.

The process is overseen by the Banking Regulation and Supervision Agency, which ensures that all financial institutions adhere to strict standards for security and transparency.

Having a local bank account is not only a legal requirement for company registration but also essential for conducting business in Turkey. It streamlines interactions with the tax office, facilitates compliance with the supervision agency, and supports the efficient management of all financial operations for foreign investors and local businesses alike.

Employment & Labor Market

Türkiye’s labor market offers competitive salaries, moderate legal complexity, and manageable labor costs, though some rules remain rigid. As part of the legal procedures for hiring employees, employers need to obtain a Social Security number for the company from the relevant Social Security Institution.

Employment Law and Working Conditions

With an employment law complexity score of 4/10, Türkiye’s legal framework is clear but can be inflexible in certain sectors. It draws on the Constitution, the Employment Law, the Turkish Code of Obligations, and sector-specific regulations. 

Changes to working conditions must be in writing, and employees have six business days to respond. Mediation is required before most disputes go to court. Trial periods last up to two months for individual contracts and four months under collective agreements. 

Overtime applies after 45 hours per week, with up to 270 hours annually often included in white-collar salaries. Strict occupational health and safety rules also apply, with penalties for breaches.

Union Activity

Union complexity stands at 2/5, reflecting a presence in some industries but limited overall influence. Organizing and bargaining can be challenging due to legal hurdles, and certain sectors have faced strike bans. Public and private sector unions operate under different rules, with public servants unable to strike but enjoying stronger job security.

Employer Costs and Payroll Contributions

With a payroll contributions score of 3/5, labor costs include social security and unemployment insurance payments. Employers contribute 20.75% to social security, with possible reductions to 16.75% or 5% for manufacturing.

Employees pay 14%, while unemployment insurance adds 2% from the employer, 1% from the employee, and 1% from the state.

Salaries and Market Position

Türkiye’s salary benchmarking score of 8/10 reflects a strong competitive edge, particularly in technology and services. Employers can attract skilled talent at lower rates than in many EU countries, although rigid rules in some sectors mean compliance planning is essential.

Talent Availability

Türkiye’s talent market is growing, but comes with hiring challenges to be mindful of if you’re starting a company in Türkiye.

Developer Talent

The Developer Talent Score is 2/5, showing a strong yet limited tech pool. Most developers are based in Istanbul, Ankara, and Izmir. Competition in these hubs is intense.

Government support for AI, robotics, and startups has helped the sector expand. Istanbul already has three unicorns and aims for 100 by 2030. Demand still outpaces supply, especially in multinational firms.

Marketing, Sales, and Finance Talent

Marketing, sales, and finance roles each score 3/5. Talent is available, but many professionals need extra training to meet global standards. This is especially important for companies working across international markets.

Recruitment Dynamics

The Difficulty of Recruiting Score is 4/10, reflecting the challenge of securing top candidates. Senior and specialized roles are the hardest to fill. With 89 technoparks, over 1,000 active startups, and $1.7 billion in 2022 investments, competition for skilled workers is fierce.

Opportunities and Challenges

Türkiye’s startup scene and the Digital Türkiye Road Map create space for growth. But limited developer numbers, the need for upskilling in commercial roles, and competitive hiring mean companies must plan carefully and offer strong incentives to attract talent.

Operational & Regulatory Considerations

Operational and regulatory requirements in Türkiye are getting easier to manage, but they still need attention. Selecting the appropriate business structure is crucial to ensure compliance with Turkish regulations and to align with your business objectives.

In-Person Travel Requirements

The In-Person Travel Requirements Score is 2/5, as many setup and compliance steps still need someone on the ground or a local representative. Some formation tasks, notarizations, and regulatory filings can be done online, but in-person follow-up is still common.

Compliance Reporting

The Compliance Reporting Score is 3/5, with filings that aren’t overly complex but happen often. Corporate, tax, and regulatory submissions need to be tracked carefully. Having a solid compliance calendar helps avoid unnecessary headaches.

Government Portal Sophistication

With a Government Portal Sophistication Score of 4/5, digital systems are improving fast. There are tools that make certain processes more efficient.

Online company registration in Turkey is now possible through official digital platforms such as MERSIS, allowing entrepreneurs to register a business remotely and benefit from a streamlined, electronic process. Still, not everything is online yet, and you may need to submit physical documents in some cases.

Data Management Laws

Türkiye’s Data Management Laws Score is 4/5, showing strong alignment with GDPR. Under the Personal Data Protection Law No. 6698 (KVKK), any company handling personal data linked to Türkiye must follow the rules. 

Registration with VERBIS is mandatory, and the KVKK Authority fines companies for late or missing filings, sometimes for each year out of compliance. Even liaison offices with no direct commercial activity have to register.

Changes in September 2024 tightened the rules for cross-border data transfers. Now, companies must notify the KVKK Authority using approved methods like standard contractual clauses or binding corporate rules. These updates bring Türkiye even closer to EU standards and increase oversight.

Understanding Turkish Business Culture

Successfully navigating the Turkish business environment requires a solid understanding of local business culture and legal procedures. Building trust and long-term relationships is central to doing business in Turkey, and foreign investors are often welcomed with hospitality and respect.

Business meetings tend to be formal, with punctuality and clear communication highly valued. Taking the time to develop personal connections can be just as important as presenting a strong business case.

The Turkish government actively encourages foreign investment through a range of incentives, including tax benefits and government subsidies, to attract foreign investors and foster a dynamic economy.

However, the registration process and legal framework can be complex, with multiple steps involving the trade registry, Turkish Trade Registry Gazette, and Central Registry Record System. Working with a certified accountant or local consultancy can help foreign investors navigate these legal procedures and ensure full compliance with Turkish law.

Transparency and accountability are supported by the Turkish trade registry and the publication of company information in the Turkish Trade Registry Gazette. This system, combined with a skilled workforce and a growing middle class, creates a promising environment for business in Turkey.

By understanding the nuances of Turkish business culture and leveraging local expertise, foreign investors can maximize their success and take full advantage of the country’s unique opportunities.

Unique Türkiye Expansion Insights

• Geographic Advantage: Türkiye sits between Europe, the Middle East, and Central Asia. This position gives it strong logistics links and broad market access. It also makes the country an influential player in Black Sea geopolitics.
• Industry Hotspots: Istanbul leads in finance and tech, attracting companies like Google, IBM, Microsoft, and SAP. Universities keep the talent pipeline strong, helping the sector grow quickly. Bursa is known for automotive manufacturing, while Izmir is a hub for trade and industrial production.
• Banking Nuances: Türkiye offers both conventional and Islamic banking. Foreign-owned companies may face extra checks when opening accounts. Building trust and maintaining good relationships with local banks helps keep operations smooth.
• Cultural Business Etiquette: Trust and personal relationships matter in business. Meetings should be scheduled one to two weeks ahead, avoiding holidays, Ramadan, and peak summer months. Arrive on time, be patient with decisions, and present proposals that are short, clear, and visual.

How GEOS Simplifies Your Expansion into Türkiye

GEOS handles the heavy lifting, from notarization-heavy incorporation steps to tax registration. We provide full entity setup, registered address services, and ongoing compliance so your business can establish a secure and efficient presence in Türkiye. Reach out to learn more about starting a company in Türkiye.

This article does not constitute legal advice.