Business Entities and Company Structures in Turkey

Turkey offers a dynamic and investor-friendly environment with various legal structures tailored to different business needs. At Atlas Global Audit and Accounting LLP, we provide expert guidance to help you choose and establish the most suitable entity for your operations.

1. Limited Liability Company (LLC / Limited Şirket)

The LLC is the most popular choice for small to medium-sized enterprises due to its flexible and straightforward administrative structure.

• Shareholders: Minimum 1 (individual or legal entity, 100% foreign ownership allowed).
• Minimum Capital: 50,000 TRY.
• Governance: Managed by a Board of Managers and the General Assembly.
• Liability: Shareholders’ liability is limited to their subscribed capital.
• Key Note: Unlike JSCs, an LLC cannot issue stock certificates, and share transfers must be notarized.

2. Joint Stock Company (JSC / Anonim Şirket)

The JSC is the most prestigious corporate form, ideal for large-scale operations and companies aiming for a future public offering.

• Shareholders: Minimum 1 (can be entirely foreign-owned).
• Minimum Capital: 250,000 TRY.
• Governance: Requires a Board of Directors and a General Assembly.
• Advantage: JSCs can issue registered or bearer stock certificates. This provides significant tax advantages and ease of share transfer after a certain holding period.
• Liability: Shareholders are liable only to the extent of their capital contribution.

3. Holding Company

A Holding Company is a strategic umbrella structure designed to own and manage the shares of other corporations.

• Purpose: Its primary function is to facilitate the free flow of capital between subsidiaries and centralize ownership management.
• Operation: Generally, holding companies do not produce goods or services themselves; they focus on investment, risk management, and administrative coordination.

4. Branch Office (Şube)

A Branch Office serves as an extension of a foreign parent company, allowing it to engage in commercial activities without forming a new legal entity.

• Legal Status: It is not a separate legal entity; the parent company is fully liable for the branch’s obligations.
• Management: At least one managing director must be appointed. If the director is a foreign citizen, a residence permit is required.
• Requirement: The branch must operate under the same trade name as the parent company, with the addition of “Turkey Branch.”

5. Liaison Office (İrtibat Bürosu)

For companies wishing to conduct market research or represent their brand without engaging in trade, a Liaison Office is the ideal low-cost entry.

• Restriction: Strictly prohibited from conducting any commercial or profit-generating activities.
• Permit: Granted by the Ministry of Industry and Technology, usually for a duration of 3 years.
• Purpose: Strategic planning, feasibility studies, and representing the parent company.

6. Free Trade Zone Company (FTZ / Serbest Bölge)

Establishing a company in one of Turkey’s Free Trade Zones offers unparalleled tax incentives, specifically for export-oriented businesses.

• Benefits: Includes 100% exemption from corporate tax (for manufacturers), VAT, and customs duties.
• Focus: Ideal for companies aiming to use Turkey as a manufacturing and logistics hub for global markets.

7. Commandite Company (Limited Partnership)

A hybrid structure used for specific business models under a trade name.

• Liability: In a Commandite company, some partners have unlimited liability (Commandite), while others have limited liability (Commanditaire) based on their capital contribution.
• Capital: There is no minimum capital requirement.

8. Collective Company

Similar to partnerships, Collective companies are typically formed by individuals.

• Ownership: Only real persons (individuals) can be shareholders.
• Liability: All partners have unlimited joint and several liability for the company’s debts. This structure is less common for foreign investors due to the high-risk nature of personal liability.

9. Non-Profit Organizations (Foundations, Associations, NGOs)

Turkey supports social and philanthropic initiatives through Foundations and Associations.

• Foundations: Asset-based entities governed by the Foundations Law.
• Associations: Membership-based entities (minimum 7 founders) governed by the Associations Law.
• Foreign Participation: Foreigners can establish or join these organizations to carry out social responsibility and humanitarian projects.

Why Choose Atlas Global Audit and Accounting LLP?

Navigating the legal and financial landscape of a foreign country requires local expertise. Atlas Global CPA provides “one-stop-shop” solutions for your business journey in Turkey, including:

• Company Formation & Registration
• Tax Planning & Compliance
• Accounting & Payroll Services
• Liaison and Branch Office Management

Start your business in Turkey with confidence. Contact us today for a professional consultation.