Incorporating in Turkey: A Comprehensive Guide by Corpheroes.

We are pleased to announce that Corpheroes now assists your businesses to be domiciled in Turkey – a country with numerous opportunities for local and international trade on goods and services. Turkey is not just a popular destination for tourism purposes, it is a place offering a range of strong arguments to consider this country for company set up purposes. Doing business in Turkey is about opportunities to enter larger local together with Eastern and Western regional markets.

It is also about a business-friendly environment, secured protection for foreign direct investments, serving as a financial and R&D Hubs, and having modern civil and tax legislative frameworks (many laws are adopted based on Swiss and German national practice while being periodically updated to stay in line with the EU legislation).

The most popular and the most widespread type of legal entity is LLC or Limited Şirket. For obvious reasons, such popularity is explained by the limited nature of members’ liability within the amount invested into the company. Therefore, the general public prefers to incorporate a limited liability company in Turkey. Turkish businesses are subjected to a flat corporate income tax at a rate of 25% while financial sector companies have a tax burden of 30%.

The withholding tax rates are set up at 10%/10%/20% for dividends, interest, and royalties’ payouts respectively. As can be noticed, the tax burden of the business companies in Turkey is approximately at the same rate as from other European countries.

Another prominent advantage for foreign investors is that there are around 75 double tax treaties signed to ensure that Turkish companies will have an adequate taxation regime. In particular, these include countries from all parts of Europe, Central and Eastern Asia, the Middle East, some African countries, the USA, Canada, Australia, New Zealand, and others.

To incorporate a Turkish limited liability company, it is required to follow several simple steps:

• Select the most suitable type of legal entity to be incorporated in Turkey;
• Identify the company’s business name, objectives, and intended nature of business;
• Register a limited liability company or Joint Stock company with the local Trade Registry; and
• To perform a registration with tax authorities in order to acquire a TIN or Tax identification number.

Depending on the complexity of the intended business operations, the timeframe to get the Turkish limited company ready for operation may vary. However, in most cases, the whole process takes approximately 10 business days. No matter how complex your case is, Corpheroes guide and assist at each and every step to ensure our clients receive the desired result.

It is also important to bear in mind that all incorporated Turkish companies are subjected to certain reporting requirements in order to ensure their compliance with the local regulatory framework on corporate law matters. In general, the mentioned submissions can be divided into a) Annual (corporate income tax return), b) Quarterly (WHT return, Provisional CIT return), and c) Monthly (VAT and WHT returns, SSI declarations, and others). The final point we would like to draw your attention to is about threshold for conducting an independent audit report. Turkish local legislation sets three main criteria to identify whether a Turkish limited company is obliged to perform an independent audit. To make it simple, if a company in Turkey matches two out of the three below criteria for 2 consecutive years, it will have to perform an annual audit:

• Company’s NET assets equal or exceed TRY75 million;
• Net Sales Revenue is TRY150 million or more;
• There are employed 150+ employees.

To summarize, it is worth mentioning that Turkey provides a well-developed legal framework regulating business operations and also ensuring their protection by law. Having its strategic location between European, Middle East, and Asian regions together with direct access to the Black Sea and Mediterranean Sea, local limited companies are granted excellent opportunities to enter large markets.

On top of it, there is a wide network of local and international banks compliant with modern international standards allowing Turkish businesses to stay connected with the major part of the world. Corpheroes would definitely recommend this location to be considered as a place to domicile business there. Contact us today to get the details on how to incorporate a limited company in Turkey.