📌 What Will You Find in This Guide?
Under Foreign Direct Investment Law No. 4875, Turkey grants foreign investors rights fully equal to those of Turkish citizens: a company can be set up with 100% foreign capital, with no prior permit, sector restriction, or minimum investment ceiling. In this guide, we walk through every stage of company formation, A to Z, with current figures, for individuals and legal entities abroad who want to invest in Turkey.
- ✔ Turkey's concrete advantages for foreign investors
- ✔ Who this structure is suitable for
- ✔ The differences between a Limited Company and a Joint Stock Company
- ✔ Documents required for a foreign partner/shareholder
- ✔ The step-by-step formation process from MERSIS to the trade registry
- ✔ KOSGEB, the Ministry of Trade, the Investment Incentive System, and free zones
- ✔ Corporate tax, VAT, the service export deduction, and formation costs
- ✔ The bank account opening process and the link to residence permits
📑 Table of Contents
1. Turkey's Advantages for Foreign Investors
With its position between Europe, the Middle East, the Caucasus, and Central Asia, its young and dynamic workforce, and its developed industrial infrastructure, Turkey functions as a regional base for foreign capital. Foreign Direct Investment Law No. 4875 grants foreign investors exactly the same rights as domestic investors; there is no separate permit regime or minimum capital ceiling.
In recent years, tax deductions aimed at service exports, digital incorporation systems, and an expanding free-trade network have made Turkey an increasingly attractive hub not only for manufacturing but also for service-driven foreign investment such as software, engineering, consulting, and e-commerce.
Strategic Location and the Customs Union
As the only candidate country that has been part of the EU Customs Union since 1996, Turkey offers duty-free access to the EU market for industrial products. It also has a network of free trade agreements (FTAs) with nearly 30 countries and regions.
Young Population and Competitive Workforce
With a population of nearly 85 million and an average age of around 34, Turkey is one of Europe's major manufacturing and service hubs; labor costs are noticeably lower than in Western Europe.
Equal Treatment for 100% Foreign Capital
A foreign individual or legal entity can own 100% of a company without needing a Turkish partner, and can also serve on the board of directors or as a manager.
Production and Operating Cost Advantage
Core operating expenses such as energy, rent, and labor are more competitive than in many European countries; this creates a clear cost advantage particularly for business models focused on manufacturing, exports, and service exports.
Link to Residence and Citizenship by Investment
Setting up an actively operating company can lay the ground for an investor residence permit application; if certain investment thresholds are exceeded, Turkish citizenship by investment can also be considered.
Digitalized and Fast Formation Process
Thanks to MERSIS (the Central Registry Recording System), most of the company formation process is carried out electronically; if the documents are complete, registration can be finalized within days.
2. Who Is It Suitable For?
The decision to set up a company in Turkey makes sense for different investor profiles for different reasons, depending on the business model and target market. The profiles below are the ones most commonly seen among investors who consider Turkey as a base for structuring their business.
🏗️ Manufacturing and Production Investors
For industrial investors seeking a cost-competitive production base close to Europe and the Middle East, Turkey stands out through the advantage of the Customs Union.
💻 Software and Service Exporters
For digital entrepreneurs and agencies that will provide software, engineering, design, or consulting services abroad, the 80% earnings deduction makes a significant difference.
🛒 E-Commerce and Retail Companies
For e-commerce, brand, and retail companies wanting to sell directly into the 85-million-strong local market, the Limited Company structure offers a fast, low-cost entry point.
🌐 International Companies Building a Regional Hub
For groups wanting to operate across Europe, the Middle East, the Caucasus, and Central Asia, a company in Turkey can be positioned as a regional headquarters or branch.
🛂 Individuals Planning Residence/Citizenship Through Investment
A suitable path for individual investors who want to establish an active economic tie in Turkey by setting up a company, and on that basis pursue a residence permit and, later, citizenship by investment.
📦 Businesses Looking to Bring Their Supply Chain Closer
For manufacturers wanting to reduce dependence on the Far East and bring their supply chain closer to the European market (nearshoring), Turkey offers a balanced alternative in terms of logistics and cost.
3. Company Types: Limited or Joint Stock?
The main company types foreign investors can set up in Turkey are the Limited Liability Company (Ltd. Şti.) and the Joint Stock Company (A.Ş.). Opening a branch office and setting up a sole proprietorship are also options, but the vast majority of foreign-capital investments are set up as Limited Companies because of their flexible structure and low capital requirement.
| Criterion | Limited Company (Ltd. Şti.) | Joint Stock Company (A.Ş.) |
|---|---|---|
| Minimum Capital | TL 50,000 | TL 250,000 (TL 500,000 for a non-public A.Ş. that has not adopted the registered capital system) |
| Number of Partners | 1 - 50 partners; single-partner formation possible | 1 or more partners; no upper limit |
| Management | Manager/board of managers; a foreign partner can be a manager directly | Board of directors; a foreign individual or legal entity can be a member |
| Capital Payment Schedule | Committed capital can be paid within 24 months | At least 25% of the cash capital before registration, the remainder within 24 months |
| Share Transfer | Requires notarization and trade registry registration, relatively more bureaucratic | Can be transferred more flexibly and quickly via share certificate/ledger entry |
| Public Offering | Not possible | Possible; suitable for structures planning growth and investor exit |
| Best Fit For | SME-scale ventures, trading, service, and consulting companies | Large-scale investments, holding structures, manufacturing projects requiring an investment incentive certificate |
Opening a branch allows the parent company abroad to operate directly in Turkey without setting up a separate legal entity; however, since the branch's profit is deemed to belong to the head office, it is not as flexible, from a tax and administrative standpoint, as an independent Turkish company. A sole proprietorship is suitable for low-volume, one-person activities, but is rarely chosen by institutional investors because it carries unlimited liability.
The vast majority of foreign investors choose the Limited Company because of its low capital requirement, flexible management structure, and lower formation/operating costs. For large-scale manufacturing investments, high-value investment incentive certificate applications, or projects targeting a multi-partner/institutional structure, a Joint Stock Company offers a more suitable framework. We help you decide together which type fits your business model, based on your line of activity and growth plan.
4. Required Documents
The documents required differ depending on whether the partner is an individual or a legal entity (a company established abroad). Since most documents can be prepared abroad through the notary and apostille process in the relevant country, being physically present in Turkey is not mandatory.
👤 For a Foreign Individual Partner
- Notarized Turkish translation of the passport
- Tax identification number (VKN) obtained from a Turkish tax office
- Residential/business address in Turkey (the address of the company being set up)
- 2 passport-style photographs
- An apostille for documents to be signed outside Turkey
- A notarized power of attorney if the process will be handled through a proxy
🏢 For a Foreign Legal Entity Partner
- The company's current certificate of activity (registry excerpt)
- A board resolution designating the authorized representative
- An apostilled, notarized Turkish translation of the articles of association/incorporation document
- A power of attorney for the person handling matters in Turkey on the company's behalf
- A VKN application for the company (tax identification number for the legal entity partner)
- An ultimate beneficial owner (UBO) declaration
Renting a physical office for the company's headquarters/ address is not mandatory; many service and consulting companies use virtual office or shared workspace addresses at the formation stage. It is enough for the address to be valid before the trade registry and the tax office.
After formation, the company's authorized representative must obtain a financial seal/e-signature; mandatory digital processes carried out through e-Government, such as e-invoice, e-ledger, and e-notification, are run through this e-signature. This application can also be handled through a power of attorney and is followed by us as part of your formation file.
An apostille is valid for documents issued in countries that are party to the Hague Apostille Convention, of which Turkey is also a member; in countries that are not party to the Convention, the documents must be certified by the relevant Turkish consulate. We organize this document preparation and translation process on your behalf as part of your formation file.
5. Step-by-Step Formation Process
When the documents are prepared completely and correctly, the process from MERSIS pre-registration to trade registry registration is generally completed within 1-2 weeks. With bank account opening and operational preparations included, the total process can extend up to 3-4 weeks.
Tax Number (VKN)
MERSIS Pre-Registration and Trade Name
Articles of Association and Capital
Notary Approvals
Trade Registry Registration
Tax Office, Chamber, Bank
5.1. Obtaining the Tax Identification Number (VKN)
The first step of formation is obtaining a tax identification number from the relevant tax office for each foreign partner. This process is free of charge and can be carried out through a proxy with a passport and a notarized power of attorney; the partner does not need to be physically present in Turkey.
5.2. MERSIS Pre-Registration and Determining the Trade Name
Through the Ministry of Trade's Central Registry Recording System (MERSIS), the company's trade name, line of activity, address, and partnership and capital structure are entered into the system. MERSIS forms the digital backbone of the formation file, and every subsequent step proceeds through this record.
5.3. Drafting the Articles of Association and the Capital Commitment
The articles of association created on MERSIS, in accordance with the Turkish Commercial Code, set out the company's trade name, scope of activity, headquarters, capital and share distribution, and its managers or board members. In a Joint Stock Company, at least 25% of the cash capital must be blocked before registration, whereas in a Limited Company the committed capital can be paid within 24 months.
5.4. Notary Approvals: Signature Declaration and Power of Attorney
The signature declaration of the company's manager/ authorized representative is issued at a notary. If the foreign partner will not be physically present in Turkey, it is enough to grant an apostilled power of attorney at a Turkish consulate or at a notary in their own country to the proxy who will handle the transactions; this way, the entire process can be managed remotely from start to finish.
5.5. Trade Registry Registration and the Gazette Announcement
All documents are submitted to the relevant Trade Registry Directorate (within the Chamber of Commerce). If the documents are complete, registration is generally finalized the same day or within a few business days, and the formation is announced in the Turkish Trade Registry Gazette, at which point the company acquires legal personality.
5.6. Tax Office Registration, Statutory Ledgers, and the Bank Account
After registration, the company is automatically registered as a taxpayer by the tax office; an inspection officer verifies the address. The statutory ledgers (journal, general ledger, inventory ledger) are opened at a notary or electronically through the trade registry, e-notification and e-ledger applications are completed, and the process of opening a corporate bank account in the company's name begins.
6. Government Incentives and the Investment Incentive System
Under Law No. 4875, foreign-capital companies are subject to the same support and incentive legislation as domestic companies. The presence of foreign capital in the partnership structure does not, in principle, prevent access to the following support items.
✅ KOSGEB Support Programs
- Any business established under the Turkish Commercial Code that fits the definition of an SME (micro/small/medium-sized) can register with the SME Information System (KBS), regardless of its ownership structure, and apply for KOSGEB support programs.
- A large number of support items fall within this scope, such as the Entrepreneurship Support Program, the KOBİGEL - SME Development Support Program, the R&D, Innovation, and Industrial Application Support Program, and the Digital Transformation Support Program; supports consist of grant (non-repayable) and repayable loan components.
- For some support items (for example, certain personnel expense supports), the newly employed personnel may be required to be Turkish citizens; this condition should be confirmed on a per-support basis before applying.
🏛️ Investment Incentive Certificate (Ministry of Industry and Technology)
- For manufacturing or certain service investments, the Investment Incentive Certificate obtained from the Ministry of Industry and Technology includes items such as VAT exemption, customs duty exemption, tax reduction, employer's social security premium support, and interest/profit-share support.
- As of 2026, the minimum fixed investment amount is around TL 15.1 million in regions 1 and 2, and around TL 7.5 million in regions 3-6; these thresholds rise significantly for special categories such as high-technology manufacturing and the Strategic Move Program.
- The incentive system is divided into regional, priority, large-scale, and strategic investment categories; which supports apply in which province and sector depends on the region where the investment will be made.
✅ Ministry of Trade Export Supports
- Foreign-capital companies established in Turkey that focus on exports can benefit, under the same conditions as other Turkish companies, from support items for market entry, trademark registration, participation in overseas trade fairs, and digital marketing aimed at exporting Turkish-origin products/services.
- For technology- and R&D-intensive projects, the TÜBİTAK 1501/1507 support programs and technopark tax exemptions can also be considered; for details, see our articles on TÜBİTAK 1501 and 1507 R&D Grants and What Is a Technopark? Advantages.
🇹🇷 Presidency Investment Office
The official body tasked with attracting foreign direct investment to Turkey, the Presidency Investment Office (Invest in Türkiye), offers foreign investors free guidance through sector reports, investment guides, and permit/license processes. The Office does not directly carry out the company formation process; it is positioned as a contact point that facilitates coordination with public institutions for large-scale or strategic investment projects.
7. Free Zones: An Extra Advantage for Exporters
Alongside classic onshore company formation, Turkey's free zones offer a separate alternative for foreign investors planning export-oriented manufacturing, warehousing, or logistics activities. Supervised by the Ministry of Trade and operating under Free Zones Law No. 3218, there are nearly twenty free zones active in provinces such as Istanbul, Izmir, Mersin, and Gaziantep. A foreign investor can set up a company here by obtaining an operating license from the relevant free zone directorate and either leasing land/a building within the zone or having a ready-built factory building allocated; the legal steps of formation (VKN, MERSIS, trade registry) are largely the same as for an onshore company, with the addition of a usage license from the zone operator.
🏗️ The Main Advantages Free Zones Provide
- No customs duty applies on entry to or exit from Turkey or EU member countries; nor is customs duty collected on goods of third-country origin entering the zone.
- VAT and other import-related taxes are not collected on goods brought into a free zone; deliveries from Turkey into the free zone are treated as exports and invoiced without VAT.
- Earnings that manufacturing-licensed producer companies derive from export-oriented sales can benefit from an income/ corporate tax exemption; as of January 1, 2025, this exemption has been limited solely to earnings from exports abroad, with domestic sales earnings excluded from its scope.
- Profits and income earned in a free zone can be freely transferred tax-free to any country desired, including Turkey, in accordance with foreign exchange legislation.
The free zone structure provides a meaningful cost advantage for manufacturing, warehousing, and logistics-focused projects whose activity is largely export-based; for business models weighted toward direct sales in the local market, the classic onshore company structure is generally more suitable. We evaluate together which structure fits your line of activity; the official sources of the Ministry of Trade should be relied on for the current scope of the exemption.
8. Tax System and Facilitations (2026)
Foreign-capital companies are subject to exactly the same tax regime as domestic companies; there is also no separate foreign capital tax. On the other hand, significant deductions and exemptions are available in certain fields of activity.
| Tax/Item | Rate | Explanation |
|---|---|---|
| Corporate Tax | 25% | 30% applies to banks and financial institutions |
| VAT (General Rate) | 18% (reduced 1% / 10%) | Reduced rates apply to basic food items and certain housing deliveries; export deliveries are exempt from VAT |
| Dividend Withholding | 15% (can be reduced under a DTA) | Applies to dividend distributions abroad; Turkey has Double Taxation Avoidance Agreements with more than 90 countries |
| Service Export Earnings Deduction | 80% | 80% of earnings derived from services provided to non-residents of Turkey, such as software, engineering, architecture, design, data processing, call centers, education, and healthcare, is deducted from the corporate tax base |
For investors planning to provide software, engineering, design, medical reporting, or call center services abroad in particular, the 80% service export deduction under Article 10/1-ğ of the Corporate Tax Law is one of the strongest incentives making Turkey a regional service export hub. In addition, under Article mükerrer 20/D of the Income Tax Law, effective from January 2026, individuals who have not been resident in Turkey for the past 3 years and settle in Turkey can obtain a 20-year income tax exemption on their foreign-sourced earnings; this exemption is a separate regulation aimed not at the company itself but at the personal income of the founder or partner. The Revenue Administration official source should be relied on to confirm current rates.
Corporate tax is paid in advance during the year in quarterly installments as provisional tax, at the same rate, and is offset in the annual return. No minimum profit condition applies to newly established companies in the first year; the return is prepared according to the actual profit/loss for the period. Regular follow-up of this calendar is part of our post-formation accounting service.
9. Formation and Operating Costs
Formation cost consists of notary fees, trade registry charges, chamber registration fees, the gazette announcement fee, and translation/apostille expenses. The figures below are indicative; they may vary according to current fee and notary tariffs, the company's capital amount, and the volume of activity.
| Item | Limited Company | Joint Stock Company |
|---|---|---|
| Minimum Capital | TL 50,000 | TL 250,000 (non-public, outside the registered capital system) |
| Formation Transaction Fee (indicative) | Approx. TL 50,000 - 80,000 | Approx. TL 65,000 - 100,000 |
| Formation Time | Generally 1-2 weeks | Generally 1-2 weeks |
In addition to formation, regular monthly accounting, VAT and corporate tax returns, payroll (if there are employees), and annual financial statement preparation are required after registration. The cost of this service varies according to the company's transaction volume, number of invoices, and number of employees. For a clear formation and monthly accounting proposal suited to your company's profile, you can get in touch with us.
10. The Bank Account Opening Process
Once trade registry registration is complete, a corporate bank account can be opened in the company's name. Corporate account opening practice in Turkey is more predictable than in many structures abroad, but there are a few practical points to be aware of.
🏦 What You Need to Know About the Bank Account Opening Process
- For a corporate account to be opened, the company must be registered, its tax certificate must have been issued, and the authorized signatory must have been determined; the account comes as the step after registration.
- Most banks require the authorized signatory to appear physically at a branch at least once for corporate account opening; the number of banks that open a fully remote (video-based) corporate account is limited.
- Under anti-money laundering (AML) legislation, banks apply due diligence regarding the ultimate beneficial owner (UBO) declaration, the line of activity, and the source of funds; a clear and consistent business plan speeds up the application process.
- Until the bank process is complete, fintech solutions such as Wise Business can be used as a temporary interim step for international collections and payments during the first period; however, these solutions do not replace a fully authorized corporate bank account in Turkey.
11. The Link to Residence and Work Permits
Setting up a company in Turkey does not, on its own, automatically create a residence or work permit; these are separate processes. However, owning an actively operating company forms a strong basis for applying for these permits.
🛂 Short-Term Residence Permit
Foreigners who are founders/partners of a company can apply for a short-term residence permit from the Provincial Directorate of Migration Management with documents showing that the activity is genuine and demonstrating the connection to the workplace. The evaluation takes into account the company's actual activity, address, and capital structure. The application is made through the e-Residence system together with the company's tax certificate, documents proving the capital commitment has been paid, the address registration document, and health insurance; the residence permit card is generally delivered within 1-2 weeks.
💼 Work Permit (Independent Work Permit)
A work permit is required for foreign partners who will actually act as managers in the company or work on their own account. As a rule, employment of 5 Turkish citizens is required for each foreign employee; if the applicant is a company partner, this condition applies only to the last 6 months of the 1-year permit to be granted.
If certain investment thresholds are exceeded (for example, one of the investment routes involving a minimum of around USD 400,000-500,000 through fixed capital investment, real estate acquisition, job creation, or a bank deposit), Turkish citizenship by investment can also become an option. Since current thresholds and conditions are updated from time to time, the relevant legislation should be confirmed before applying.
12. Who Manages Your Formation and Accounting Process?
For foreign investors wanting to set up a company in Turkey, one of the most critical questions is who will handle the regular accounting, payroll, and tax filing obligations after formation, and how.
🤝 We Handle the Entire Process, From Formation to Monthly Accounting
From obtaining the VKN to MERSIS registration, from drafting the articles of association to trade registry registration, from tax office and chamber registration to the bank account opening process, we manage your company formation in Turkey from start to finish. Once formation is complete, we also provide your monthly accounting, VAT and corporate tax returns, payroll, and statutory reporting service, without you needing to look for a separate local accountant or consulting firm. You can contact us for the entire process.
13. Points to Watch Out For
Although the formation process is legally the same as for a domestic investor, there are certain points foreign investors commonly run into in practice that should be planned for in advance to speed up the process.
14. Frequently Asked Questions
Can a foreign individual set up a company 100% owned by themselves in Turkey?
Yes. Under Foreign Direct Investment Law No. 4875, a foreign individual or legal entity can own 100% of a company without needing a Turkish partner, and can take a direct role in its management.
Do I need to be physically present in Turkey to set up a company?
No. Obtaining the tax number, MERSIS registration, drafting the articles of association, and trade registry registration can all be carried out remotely through a proxy with an apostilled power of attorney. The need for physical presence generally arises only when opening the bank account.
Which is more suitable, a Limited Company or a Joint Stock Company?
For SME-scale trading, service, and consulting activities, a Limited Company is generally preferred because of its low capital requirement and flexible structure. A Joint Stock Company may be more suitable for large-scale manufacturing investments, investment incentive certificate applications, or multi-partner institutional structures.
Does setting up a company automatically provide a residence permit?
No. Setting up a company and obtaining a residence/work permit are separate processes. Owning an actively operating company forms a strong basis for a residence permit application, but the application is separately assessed by the Provincial Directorate of Migration Management.
Can foreign-capital companies benefit from KOSGEB and Ministry of Trade supports?
Companies established in Turkey that meet the relevant criteria (SME definition, export activity, etc.) can apply for support programs regardless of the ratio of foreign capital in their ownership structure. Some support items may have specific conditions relating to the nationality of the personnel to be employed; these conditions should be assessed on a per-support basis.
Is setting up a company in a free zone more advantageous than setting up onshore?
This depends on the line of activity. For export-heavy manufacturing, warehousing, or logistics activities, a free zone provides a clear cost advantage thanks to customs and VAT exemptions and the export earnings tax exemption. For companies that will sell directly into the local market, a classic onshore company structure is generally more suitable.
How much do formation and annual operating costs amount to?
As an indicative formation transaction fee, depending on the company type and capital amount, this can range from TL 50,000-80,000 for a Limited Company to TL 65,000-100,000 for a Joint Stock Company. In addition, the monthly accounting service is priced separately according to transaction volume and number of employees; we recommend contacting us for an exact figure.
How long does the formation process take?
When the documents are prepared completely, the process from MERSIS pre-registration to trade registry registration is generally completed within 1-2 weeks. When bank account opening and operational preparations are included, the total process can extend up to 3-4 weeks.
What ongoing obligations arise after formation?
A monthly VAT return, a quarterly provisional tax return, an annual corporate tax return, e-ledger/e-invoice records, and payroll (if there are employees) are the main obligations that must be tracked regularly. We take on the entirety of these processes after formation; you will not need to look for a local accountant either.
Conclusion
With its equal legal status for foreign capital, strategic location, competitive cost structure, and strong tax incentives aimed at service exports, Turkey offers a serious formation alternative for foreign investors. However, choosing the right company type and structure (classic onshore company or free zone), preparing the documents completely and correctly, planning the bank account process realistically, and running post- formation accounting obligations regularly are decisive for the process to proceed smoothly. Get in touch with us to make these decisions in line with your business model and manage the entire process with professional support.