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#Company in Turkey

Yes, as a foreigner you can establish a business in Turkey. It is irrelevant what nationality you are or your place of residence.

The major steps to establishing a limited company are;


- To prepare and notarize the articles of association
- Deposit 0.04% of the capital with your bank
- Register the company at the Trade Registry Office and the Chamber of Commerce

*The original and two notarized copies of the Articles of Association must be submitted to the Trade Registry Office within 15 days from the date of notarization together the documents listed in the Documentary Requirements section below .

*For Limited Companies, the Articles of Association must conform to Article 279 of the Turkish Commercial Code.

Please note; The articles of association are published in the Trade Registry Gazette. 



Once established, the company must be registered with the local tax office and after you will receive the companies ‘tax certificate’, which must be clearly displayed at the place of business.
You local tax officer will make a visit to your office or shop within a few days to verify this information.

The Registry Office will notify the 'Ministry of Labor and Social Security' of the incorporation and both the company and its employees must be registered with that administration. The company's registered address is stated in the articles of association and any changes must be registered.

The legal books of the company must be certified by a notary on the day the company is registered.

They are as follows;

The journal, ledger, case book and inventory.

Please note that a company in Turkey can be managed by foreign directors. (Work permits will be required) And there is no requirement to have a Turkish director.

Please note; foreigners can establish a Turkish company and own it as a full 100% shareholder.

Please see YellAli's guide to setting up a company in Turkey

Confused? Contact us for professional assistance



Turkish Residence Permit



Disclaimer: The information on this site is provided as a general guide. Information published to YellAli is confirmed by official government departments in Turkey. Whilst every effort is made to ensure that the site is up to date and accurate, information may be subject to change at any time. YellAli does not accept any responsibility or liability for inaccuracies in this information.



Tags: Company in Turkey, work permit

A) DIRECT TAXES

The Turkish taxation system contains two main direct taxes;
income tax and corporate tax.

Individuals are subject to income tax on their income and earnings. Companies are subject to corporate tax on their income and earnings.

1) INCOME TAX

a) Taxation of Income
Income tax is levied on the income of individuals. Partnerships are not accepted separately and each partner is taxed individually on their shares. An individual’s income may contain one or more of the income items listed below:

  • Business profits
  • Wages and salaries
  • Income from independent professional services
  • Agricultural incomes
  • Income from immovable property and rights (rental income)
  • Income from movable property (income from capital investment)
  • Other income and earnings without considering the source of income
  • b) Tax Liability
    An individual who is a resident of Turkey is liable to pay for his income worldwide; meaning unlimited liability. A person who stays in Turkey more than six months in a (calendar year) is accepted as a resident of Turkey. On the other hand, a person who stays in Turkey for six months or more for a specific job, business or special purpose is not as a resident. For this reason unlimited tax liability is not applied to them.

    c) Income Types

    • Business profits
    • An individual needs to have a permanent establishment or representative in Turkey, income must be    earned through the business and carried out by the establishment or representatives. The taxable income of a business enterprise is the difference between its net assets at the beginning and at the end of a calendar year.
    • Wages and salaries
    • Employees are subject to income tax. The income contains employee’s salaries and wages as well as associated supplementaries such as allowances, bonuses, commissions, premiums, compensations, etc. They are all subject to income tax.

    Income tax rates applied for wages and salaries are as follows:
    15% up to   10,000 TL
    20% up to   25,000 TL
    27% up to   88,000 TL
    35% more than 88,000 TL

    • Income from independent professional services
      Independent professional services means the activity which is done by a person who is self-employed. It includes services of lawyers, doctors, accountants, consultants and engineers. These independent professionals need to get an the “acceptance certificate” for their degree obtained abroad from an the Turkish  Council of Higher Education.
    • Agricultural incomes
      Income derived from agricultural activities are subject to income tax. It contains activities are done on which land, sea, rivers and lakes in forms of cultivating, planting, breeding, fishing, hunting, etc
    • Income from immovable property
    • Immovable property includes land, buildings and permanent leaseholders rights. Trucks, boats, aircrafts and other transportation vehicles are accepted as immovable property. Rental income from them is subjected to income tax.
    • Income from movable property
    • Interest, dividend, rent, capital in cash, capital in kind are included in income from movable property and are subjected to income tax.
    • Other income and earnings

    2)  CORPORATE TAX

        a) Taxation of Income
    Corporate tax is levied on the income and earnings arising from corporation activities.   Companies which are subject to corporate tax are listed below:

    • Capital companies and similar companies
    • Public enterprises
    • Cooperatives
    • Enterprises owned by foundations, societies and associations
    • Joint ventures

        b) Tax Liability
    Corporations, which have their legal headquarters located in Turkey or effective management placed in Turkey, are taxed on their income worldwide. They are subjected to unlimited liability.

        c) Net Taxable Income
    Net income is defined as the difference between the net worth of an asset owned at the beginning and end of a fiscal year. Expenses in Income Tax Law article 40, are allowed to be deducted from revenue. The following expenses may also be deducted in order to determine the tax base:

    • Expenses related to the issuance of stock and shares
    • Initial organization and establishment expenses
    • Expenses incurred for general board meetings, expenses made during mergers, dissolutions and liquidations
    • In the case of insurance companies, technical reserves required for the insurance contract still valid at date of inventory
    • Profit shares accrued to partners by participation banks for participation accounts
    • Profit shares accrued to active partners of partnerships in commendams limited by shares
    • Research and development deductions calculated as 40% of new technology and the research expenses realized within business

         d) Corporate Tax Return
    Every taxpayer must file only one tax return, including corporations. The corporate tax return must be filed by the 25th of the fourth month following the end of the fiscal year and assessed taxes are paid until the end of that month.
    In Turkey the corporate tax rate is 20% of corporate earnings.

    B) INDIRECT TAXES

  • Value Added Tax (VAT)
    In Turkey, VAT is the most important indirect tax. VAT is levied on the supply and importation of goods and services. VAT is applied in different rates of 1%, 8% and 18%.  The payment of VAT is made by the 26th of the following month after the current month.
  • Stamp Tax
    Stamp tax is applied for documents such as agreements, contracts, financial statements, payroll, letter of guarantee, etc. Stamp tax is levied as a percentage of value on the documents.
  • Motor Vehicle Tax
  • Banking and Insurance Transactions Tax
  • Property Tax
  • Communication Tax
  • Customs Tax
  • Inheritance Tax
  • Gambling Tax
  • Special Consumption Tax


  • Original Source: http://www.ozbekcpa.com/en/law/tax-system-in-turkey

    The above Guide was written and produced by OzbekCPA - (Partner of YELLALI)

    (i) If you would like to speak to an advisor about Tax Systems or Establishing a Company, please contact us ozbek@yellali.com

    About OzbekCPA - Based in Istanbul, Turkey OzbekCPA was founded in 2002 to offer accounting, financial consultancy, auditing, company formation, tax advisory and investment advisory services to the whole of Turkey. Our approach is to provide financial and management guidance, as well as direction for our clients by expanding their knowledge base regarding their operation in Turkey.

    Important (All Copyright is protected and owned by OzbekCPA - This content may NOT be copied & distributed by another third party)




    Disclaimer: The information on this site is provided as a general guide. Information published to YellAli is confirmed by official government departments in Turkey. Whilst every effort is made to ensure that the site is up to date and accurate, information may be subject to change at any time. YellAli does not accept any responsibility or liability for inaccuracies in this information.



    Tags: Company in Turkey

     

    JOINT STOCK COMPANY

    LIMITED COMPANY

    SHARE HOLDER

    Joint stock company can be set up with a single shareholder.There is no restriction about the share holder amount.

    Limited Company can be set up with a single shareholder .There will be no more than 50 shareholders.

    SHARE HOLDER'S NATIONALITY CAPITAL

    free

    between 50.000 TL and 100.000 TL

    at least 25% of the capital should be paid during the registration process and the unpaid amount should be paid within 24 months after registration.

    free

    10.000 TL

    at least 25% of the capital should be paid during the registration process and the unpaid amount should be paid within 24 months after registration.

    SHARE HOLDERS LIALIBITY

    In Joint stock companies, liabilities of shareholders are limited to the amount of capital subscribed by shareholders for both tax and legal purposes.

    According to 6183 legislation Shareholders are liable to the company only with the amount of subscribed capital and in proportion to their capital contribution with regards to third party receivables. LLC shareholders are jointly and severally liable against public receivables such as taxes with their own/personal assets. Such liability occurs only if the tax office cannot collect outstanding taxes from the assets of the company.

    MANAGEMENT

    There are two administrative bodies in the A.S. as the Board of Directors and the General Assembly.

    General Assembly is the supreme body of the limited liability company which consists of the shareholders of the company. The company is represented and managed by the manager or managers appointed by the general assembly. At least one of the shareholders of the LLC shall be appointed as manager.

    WEB SITE

    Capital companies that are subject to independent auditing will be required to establish an Internet site within 3 months of their registration at the trade registry and to reserve a part of this site for publishing the announcements that the company is legally required to make.

    Capital companies that are subject to independent auditing will be required to establish an Internet site within 3 months of their registration at the trade registry and to reserve a part of this site for publishing the announcements that the company is legally required to make.

    THE TITLE OF THE COMPANY

    Companies must state the nature of business in the company name.

    companies must state the nature of business in the company name.When the company name consists of a name of real person, the words that refer to the company

    type cannot be abbreviated such as Ltd.

    PUBLIC OFFERING FOR SHARES

    Joınt stock companies can be listed with stockexchanges. There is an opportunity to go public.The company shares can be on the stock market.

    There is no opportunity to go public.

    INDEPENDENT AUDIT

    Companies that exceed the limits designated by the decision of the governmental authorities are subject to independent audit.

    Companies that exceed the limits designated by the decision of the governmental authorities are subject to independent audit.

    ATTORNEY

    JCS with the capital of 250.000 TL and above must have a consulting agreement with an attorney.

     

    There is no attorney requirement.

     



    NEED HELP? Contact YellAli for professional assistance setting up your Turkish Company



    Turkish Residence Permit



    Disclaimer: The information on this site is provided as a general guide. Information published to YellAli is confirmed by official government departments in Turkey. Whilst every effort is made to ensure that the site is up to date and accurate, information may be subject to change at any time. YellAli does not accept any responsibility or liability for inaccuracies in this information.



    Tags: Advice, Company in Turkey, work permit

    Legal documents from abroad must be translated and notarised in Turkey (such as Power of Attorney, judgments, civil status documents) and must have an apostille stamp from the country of origin in order to be accepted by Turkish authorities. YellAli offers a full translation service.

    Tags: Company in Turkey, Expat advice, Legal, Property