Setting Up a Company in Turkey: A Practical Legal Guide for Foreign Investors 2026

Key Information

• Foreign investors may establish companies in Turkey with 100% foreign shareholding.
• The most common company types are limited liability companies and joint stock companies.
• The minimum share capital is TRY 50,000 for limited liability companies and TRY 250,000 for joint stock companies.
• If the documents relating to the foreign shareholders are duly prepared, incorporation can generally be completed within a few business days.
• After incorporation, companies remain subject to ongoing compliance obligations in areas such as tax, accounting, employment law, data protection and foreign investment reporting.

Introduction

Turkey is an important investment destination for foreign investors due to its strategic geographical location, customs union with the European Union, large domestic market, advanced production capacity and qualified workforce. With the entry into force of the Foreign Direct Investment Law No. 4875, Turkey adopted the principle of equal treatment for foreign investors and transformed company incorporation, as a rule, from an approval-based system into a notification-based system.

However, foreign investors wishing to set up a company in Turkey need reliable legal guidance on various matters, including the choice of the appropriate company type, preparation of incorporation documents, trade registry procedures, minimum capital requirements, tax and accounting obligations, foreign exchange regulations, work permits and post-incorporation compliance.

This guide provides a practical legal overview of the company formation process in Turkey for foreign investors under the current legislation applicable in 2026.

1. Company Types: Which Structure Is Right for You?

Foreign investors in Turkey most commonly choose one of four legal structures. Each structure has different advantages, obligations and practical use cases.

1.1. Limited Liability Company

A limited liability company is one of the most commonly preferred company types for foreign investors in Turkey. It is functionally comparable to a German GmbH, a UK private limited company, a French SARL and an Italian Srl.

Main features

• Minimum share capital: TRY 50,000. Cash capital must be paid within 24 months following incorporation.
• It may be established by one or more shareholders, up to a maximum of 50 shareholders.
• The liability of the shareholders is limited to their capital commitment.
• At least one manager must be appointed. At least one of the managers must also be a shareholder of the company. Managers are not required to be Turkish citizens or residents in Turkey.
• The transfer of shares is subject to approval by the general assembly and notarial procedures.
• It is suitable for small and medium-sized investments, sales offices and service companies.

1.2. Joint Stock Company

A joint stock company is generally preferred for larger investments, multi-shareholder structures or businesses that may consider a public offering in the future. It is comparable to a German AG, a UK PLC and a French SA.

Main features

• Minimum share capital: TRY 250,000. At least 25% of the cash capital must be paid at incorporation and the remaining amount must be paid within 24 months. For non-public joint stock companies adopting the registered capital system, the initial capital must be at least TRY 500,000.
• It may be established by one or more shareholders, with no upper limit on the number of shareholders.
• A board of directors must be established. One board member is sufficient.
• Share transfers are generally more flexible, particularly for bearer shares. However, restrictions may apply to registered shares and under the articles of association.
• It may conduct public offerings and issue bonds.
• In certain regulated sectors, such as banking, insurance and capital markets, incorporation as a joint stock company is mandatory.

1.3. Branch Office

A branch office is an extension of the foreign parent company in Turkey and does not have separate legal personality.

Main features

• Registration with the trade registry is mandatory.
• Since the branch does not have separate legal personality, the foreign parent company is directly liable for the debts and obligations arising from the branch’s activities.
• A Turkish branch of a foreign company is not a separate legal entity, but an extension of the foreign parent company in Turkey. Therefore, rights and obligations arising from the branch’s activities generally belong to the parent company. Nevertheless, although the branch does not constitute a separate legal entity in Turkey, it is subject to trade registry registration, bookkeeping, document issuance, tax registration, tax filing and reporting obligations under the Turkish Commercial Code, the Tax Procedure Law and the relevant tax legislation. Although a branch does not have legal personality, it is subject to corporate income tax in the same way as limited liability companies and joint stock companies.
• It may conduct commercial activities in Turkey, enter into contracts and issue invoices.
• A fully authorised commercial representative resident in Turkey must be appointed for the branch.

1.4. Liaison Office

A liaison office is established for market research, promotion, representation, communication or coordination purposes and may not conduct commercial activities.

Main features

• No capital investment is required.
• It may not generate income or engage in profit-making activities.
• All expenses must be covered from abroad.
• Permission must be obtained from the Ministry of Industry and Technology.
• It is a preliminary step for companies wishing to explore the Turkish market.
• Permission is generally granted for a period of three years and may be extended.

Comparison Table

Criterion	Limited Liability Company	Joint Stock Company	Branch Office	Liaison Office
Legal personality	Yes	Yes	No	No
Minimum capital	TRY 50,000	TRY 250,000	None	None
Commercial activity	Yes	Yes	Yes	No
Share transfer	Requires general assembly approval and notarial procedures	Depends on the type of shares and the articles of association; generally more flexible	—	—
Public offering	No	Yes	No	No
Liability	Limited to capital contribution	Limited to capital contribution	Parent company	Parent company
Ideal use	SMEs, services, sales	Large investments, industry	Commercial operations	Market research

2. Incorporation Process: Step by Step

The company incorporation process in Turkey is carried out through MERSİS, the Central Registration System. If notarised and apostilled documents relating to the foreign shareholders, together with their sworn Turkish translations, are duly prepared and tax identification numbers are obtained for the foreign shareholders, the official incorporation process can generally be completed within 3 to 5 business days.

Step 1: Preliminary Preparation

• Checking and reserving the company trade name through MERSİS.
• Preparing the articles of association, including the company name, purpose, scope of activity, capital, shareholding structure, management and representation rules.
• Obtaining tax identification numbers for foreign shareholders.
• Preparing the documents relating to foreign shareholders, such as passports, trade registry extracts and authorisation documents, in notarised, apostilled and sworn translated form.

Step 2: MERSİS Application

• The articles of association are entered into the MERSİS system.
• A potential tax number is obtained.
• At least 25% of the capital must be deposited with a bank for joint stock companies.

Step 3: Trade Registry Registration

• The MERSİS application is submitted to the relevant Trade Registry Directorate.
• Signature declarations of the persons authorised to represent and bind the company are prepared.
• The company acquires legal personality upon registration.
• The registration is announced in the Turkish Trade Registry Gazette.

Step 4: Tax Office Registration and Other Formalities

• Tax registration is completed with the tax office where the company’s registered address is located.
• If the company employs personnel, workplace registration with the Social Security Institution and payroll processes must also be completed.
• Opening certifications of statutory books are completed during incorporation before the trade registry directorate or, where required, before a notary, in accordance with the applicable legislation.

Step 5: Activity Permits Depending on the Sector

• Additional permits or licences may be required in certain sectors, such as food, healthcare, energy, mining and tourism.
• If foreign personnel will be employed, work permit procedures must be handled separately.

3. Costs: General Overview

The main cost items for company incorporation in Turkey are summarised below. The exact amounts vary depending on the company type, share capital, the scope of the foreign document set, the field of activity and the nature of the required legal advice.

Cost Item	Explanation
Trade registry fees and chamber dues	Vary depending on the company type, capital amount and relevant chamber registration.
Notary, translation and apostille costs	Vary depending on the documents of the foreign shareholder or foreign parent company.
Statutory books and incorporation documents	Certification and registration procedures are completed during incorporation.
Accounting and payroll services	Determined according to the volume of business and number of employees.
Legal advice	Determined separately according to the company structure, foreign document set, sector permits and contractual requirements.
Sector-specific permits and licence costs	Assessed separately depending on the field of activity.
Competition Authority contribution	Payable at the rate of 0.04% of the company’s share capital.

4. Legal Issues Specific to Foreign Investors

4.1. Equal Treatment Principle

Under the Foreign Direct Investment Law No. 4875, foreign investors have the same rights as domestic investors. Companies may be established with 100% foreign shareholding and there is no requirement to have a Turkish shareholder.

4.2. Foreign Exchange Restrictions under Decree No. 32

Under Decree No. 32 on the Protection of the Value of Turkish Currency, certain contracts between persons resident in Turkey, including real estate sale and lease agreements, service agreements and employment contracts, are subject to restrictions on determining the contract price in foreign currency or indexed to foreign currency.

However, depending on the residency status of the parties, the type of contract, the place of performance and the exceptions provided under the relevant Communiqué, it may be possible to determine the contract price in foreign currency or indexed to foreign currency for certain contracts. Therefore, foreign currency-based contract structures must be assessed separately for each specific contract.

4.3. Employment of Foreign Personnel

The employment of foreign personnel in Turkey is subject to work permit requirements under the International Labour Force Law No. 6735 and secondary legislation. In practice, general assessment criteria include the employment of a certain number of Turkish citizens for each foreign employee, the financial capacity of the workplace and the qualifications of the foreign employee.

Special assessment criteria or exceptional practices may apply to foreign shareholders, specific foreign direct investments, key personnel and certain sector-specific situations.

4.4. Acquisition of Real Estate

Foreign individuals may acquire real estate in Turkey provided that they are citizens of countries designated by the President and comply with the statutory restrictions. As a rule, the total area of real estate that may be acquired by foreign individuals may not exceed 30 hectares nationwide and 10% of the privately owned area of the relevant district. Additional restrictions may apply to special security zones, military prohibited zones and strategic areas.

4.5. Investment Incentives

Turkey offers various incentive mechanisms to foreign investors, including VAT exemption, customs duty exemption, tax reductions, employer social security premium support, interest support, land allocation and energy support. The scope of incentives varies depending on the type, size and location of the investment.

5. Post-Incorporation Obligations

After incorporation, companies remain subject to ongoing legal and administrative obligations that require careful attention from foreign investors.

5.1. Bookkeeping and Financial Reporting

Companies in Turkey are generally required to keep their statutory books in Turkish and in Turkish Lira under the Tax Procedure Law. Whether a company is subject to international financial reporting standards, IFRS or TFRS, depends on whether it is subject to independent audit.

5.2. Independent Audit Thresholds

With the amendment dated 17 March 2026, the threshold values for companies subject to independent audit were updated. For companies subject to the general audit criteria, the following thresholds apply for financial years beginning on or after 1 January 2026: total assets of TRY 500 million, annual net sales revenue of TRY 1 billion and 150 employees. If at least two of these three criteria are exceeded for the periods specified under the relevant legislation, an independent audit obligation may arise.

5.3. Protection of Personal Data

The processing of personal data in Turkey is regulated under the Personal Data Protection Law No. 6698. Newly established companies should assess, depending on the nature of their activities, their obligations regarding privacy notices, data processing inventories, data security measures, agreements with data processors and, where required, registration with VERBİS.

For foreign-invested companies, data sharing with group companies and cross-border transfers of personal data are of particular importance. The Regulation on the Procedures and Principles Regarding the Transfer of Personal Data Abroad provides for appropriate safeguards such as standard contractual clauses and binding corporate rules. Therefore, foreign-invested companies should separately structure their data protection compliance processes after incorporation, particularly regarding intra-group data transfers, human resources processes, customer data and data sharing with the foreign parent company.

5.4. MASAK Compliance

Depending on the company’s field of activity, it should be assessed whether the company qualifies as an obliged party under the legislation of MASAK, the Financial Crimes Investigation Board. Know-your-customer requirements, suspicious transaction reporting and compliance programme obligations may arise in sectors such as finance, payment services, crypto asset service providers, real estate brokerage, precious metals and certain high-risk sectors.

5.5. Employment Law Obligations

Employment relationships in Turkey are governed by the Labour Law No. 4857.

For 2026, the monthly gross minimum wage has been set at TRY 33,030. Since this amount may change periodically, current wage, social security and payroll obligations should be checked separately when planning to employ personnel.

Turkish employment law may differ from the systems foreign investors are familiar with in relation to issues such as severance pay after at least one year of service, notice periods, annual leave rights and overtime rules.

5.6. Foreign Investment Reporting and E-TUYS

Foreign-invested companies and branches are required to report certain information through the E-TUYS system of the Ministry of Industry and Technology under the Foreign Direct Investment Law and the relevant implementing legislation. These reports are important with respect to company activity information, capital movements, changes in shareholding structure and other relevant foreign investment information. Therefore, after incorporation, foreign investment reporting obligations must be monitored and fulfilled accurately and on time.

6. Frequently Asked Questions (FAQ)

Do foreign investors need a Turkish shareholder?

No. Under Law No. 4875, companies may be established with 100% foreign shareholding.

How long does the incorporation process take?

If notarised and apostilled documents relating to the foreign shareholders, together with their sworn Turkish translations, are duly prepared, the official incorporation process generally takes 3 to 5 business days.

Is the company manager required to reside in Turkey?

As a rule, board members of joint stock companies and managers of limited liability companies are not required to be Turkish citizens or residents in Turkey. In limited liability companies, at least one shareholder must have management and representation authority. By contrast, for Turkish branches of foreign companies, a fully authorised commercial representative resident in Turkey must be appointed.

Does the foreign investor need to come to Turkey to set up a company?

Generally, no. If the documents are duly prepared, apostille, registration and translation procedures are completed, and the required powers of attorney are issued, many steps can be handled through a representative. However, physical presence may be required in practice for bank account opening, signature procedures or sector-specific permits.

Is it possible to obtain Turkish citizenship through investment?

Yes. It is possible to apply for Turkish citizenship through routes such as real estate investment of at least USD 400,000, capital investment of USD 500,000 or bank deposits. Since citizenship by investment is a separate and technical matter, the current legislation and administrative practice should be assessed before applying, particularly in relation to investment amounts, holding periods, conformity certificates, foreign currency conversion obligations and title deed or banking procedures.

Can company profits be transferred abroad?

Yes. Provided that tax obligations are fulfilled, dividends and capital may be freely transferred abroad.

7. The GEMS Schindhelm Advantage

Company formation in Turkey is not merely a technical registration process. It requires an integrated approach to several interconnected areas, including the choice of the appropriate company structure, contract design, tax planning, employment law compliance and data protection obligations.

As GEMS Schindhelm Istanbul, we offer foreign investors the following advantages:

Cross-border coordination

We are part of the Schindhelm Alliance, a network consisting of 26 offices in 13 countries. By coordinating with the Schindhelm office in the investor’s home country, we manage the company formation process comprehensively from both Turkish law and home country law perspectives.

Trilingual legal services

We provide full legal services in Turkish, German and English. Contracts, official correspondence and client communication can be conducted in all three languages.

Integrated legal and tax support

Together with our in-house tax department, we provide legal advice and tax planning in a coordinated manner and manage investors’ incorporation and compliance processes with an integrated approach.

International experience

Through our experience with Austrian, German and other international investors, we provide comprehensive advice for market entry into Turkey, taking into account both local legislation and the expectations of investors in their home jurisdictions.

Contact

If you would like to receive legal advice for your investment plans in Turkey, please contact us.

This guide has been prepared for general information purposes only and does not constitute legal advice. We recommend obtaining professional legal advice for an assessment of your specific situation.

Author: Gürkan Erdebil