Business in Turkey

5.1. Time required for establishment

- Limited: app. 15 days

- Anonym: app. 15-20 days

5.2. Incorporation fees

Cost of formation of such companies varies depending on the capital involved and the number of the shareholders. These costs are mainly:

• Notary charges 0.4% of the capital, which cannot exceed a certain amount,
• Charges for registration and announcements,
• Fees for legal and tax consultants etc.

5.3. Minimum number of founders required

- For limited company: 2 shareholders.

- For anonym company: 5 shareholders.

5.4. Permissible types of shareholders

- Limited and anonym company shareholders may be individuals or companies, either resident or non-resident. Shareholders are only liable to the extent of the nominal value of the shares.

- An anonym company is managed by the board of directors. A manager can be appointed either from among the shareholders or from outside. Each share has one voting right. Preference shares which provide a preferred fixed dividend or the right to exercise control over aspects of management may be established in the articles of association.

- Bearer shares may be issued when the capital is fully paid. Bearer shares can be transferred freely, while the others must be recorded in the shareholders’ register.

5.5. Directors

5.5.1. Number of Directors

1. Limited: A minimum of one. Individual shareholders and the representatives of company shareholders are accepted as Directors. Directors who are not shareholders can be appointed.

2.   Anonym: A Minimum of three.

5.5.2. Nationality and Responsibilities

The first board members are appointed by the founders and afterwards by the annual general meeting of shareholders. The board members do not have to be Turkish residents.

Directors’ powers and responsibilities are laid down in the articles of association including the day-to-day management of the company and preparation of the annual report. Approval of the balance sheet and income statement ratifies the performance over the preceding financial year.

(Directors) Board members may be appointed for up to three years and may be re-elected.

5.6. Initial capital requirements

- For a limited company: minimum YTL 5.000 (minimum nominal value per share, YTL 25).

- For an anonym company: minimum YTL 50.000. 

5.7. Annual requirements

5.7.1. Financial Statements

Annual balance sheet, income statement and the other financial tables, showing the results of the year and the situation of the company at the end of the accounting year should be prepared.

Financial statements are presented to the shareholders for approval in the annual meeting.

5.7.2. Meetings

Board meetings should be held at least once every 3 months and an annual shareholders’ meeting must be held once a year before the end of the third month of the following financial year.

An extraordinary shareholders’ meeting can be held at any time. The shareholders may be represented by proxies.

Only a general meeting of shareholders may amend the articles of association. The quorum and the majority needed, for important changes of the articles of association such, as the name of the company and capital increases, may need higher majorities.

5.7.3. Audit requirements

At least one auditor is appointed with the power to audit the accounts and transactions of the company. The auditor’s report is presented to the annual shareholders’ meeting.

Several transactions and the financial reports of the company are subject to ratification by authorized external auditing bodies.

5.7.4. Other

1. Accounting requirements

All business enterprises must have an accounting system with a general, standard, and chart of accounts, adapted to the needs of the business in accordance with Turkish Standard of Accounting Plan.

Books and related documents must be kept for a minimum of five years for taxation purposes, and for ten years under the Commercial Code and Social Security legislation.

2. Reporting requirements

Annual reports prepared by the board and ratified by the shareholders’ meeting are submitted to the Ministry of Trade. Companies with foreign investment also prepare an additional financial report to the Treasury summarizing the activities of the previous year.

5.8. Technology transfer

5.8.1. Technology transfer

All kinds of technology transfers into Turkey are welcomed. Imports and exports are unrestricted and exchange control is limited to certain formalities. Proceeds are freely transferred from Turkey.

5.8.2. Royalty payments

After the approval of such agreements by the Treasury all kinds of royalty payments can easily and freely be transferred outside Turkey by simply stating the reason and the source.

5.8.3. Summary

The commercial banks can arrange payments for all imports and exports, and currency transfers.

There is no restriction on importing bank notes, coins and other means of payment in Turkish Lira and foreign currencies.

In Turkey, non-residents may pay, receive and deposit freely using Turkish currency.

Residents may hold foreign currency, open foreign exchange accounts in banks, make payments and cash withdrawals (in foreign bank notes) from these accounts and accept foreign exchange for transactions held in Turkey.

Non-residents may invest, engage in commercial activities, purchase shares and engage in partnerships without any permission. To open branch offices, representative offices and agencies permission is required to be obtained from Treasury. These provisions also apply to intangible rights such as patent rights, production licenses and know-how.

Transfer requests of proceeds and repatriation of foreign capital should be met immediately by the banks.

All kinds of securities may be imported or exported. Foreign currency denominated securities issued in Turkey may be sold to non-residents. Proceeds of domestic securities purchased by converting foreign exchange may be transferred through banks.

Non-residents may purchase real estate and related real rights in Turkey by converting foreign exchange and transfer all proceeds through a bank.