How Foreign Investors Can Set Up a Company in Turkey

Foreign individuals or legal entities wishing to establish a company in Turkey are, for the most part, subject to the same conditions as Turkish nationals; the process mainly differs in the documentation and identity-verification stages.

The Principle of Equal Treatment

Under Foreign Direct Investment Law No. 4875, foreign investors are, as a rule, entitled to the same rights as Turkish investors when it comes to establishing a company and holding shares in Turkey. Because certain sectors (such as media or aviation) may have specific limits on the ratio of foreign capital, it is necessary to assess in advance whether the intended activity falls under such a sector-specific restriction.

How Does the Formation Process Work?

Company formation is carried out through MERSİS (the Central Registry Record System) in accordance with the provisions of the Turkish Commercial Code. For foreign individual partners, a copy of the passport and, where required, a sworn translation are requested; for foreign corporate partners, a certificate of activity (the equivalent document in their home jurisdiction), apostilled or consular-certified, along with its translation, is requested.

Tax Identification Number and Residence Permit

A foreign partner is not required to reside in Turkey to establish a company; however, a tax identification number obtained from the tax office is required. For foreign individuals who will actually take an active role in managing the company, a work permit should be separately assessed — this is a process independent of company ownership.

Choosing the Company Type

The most commonly chosen company types for foreign investors are the limited liability company (for small and medium-sized structures) and the joint-stock company (for structures with potential for going public or with multiple shareholders). A foreign company already operating abroad may also choose to establish a branch office ("Şube") in Turkey rather than a separate Turkish entity; a branch is not a distinct legal person from its parent company and is generally used where the foreign company wants to carry out the same activity in Turkey under its own name. The choice between these structures should be assessed in advance in terms of liability limits, ease of share transfer, and tax consequences.

Practical Recommendations

Since the apostille/consular certification and sworn translation processes for the formation documents can take time, start preparing these documents well ahead of your intended formation timeline. Consulting a lawyer in advance to determine whether the intended activity is subject to a sector-specific restriction and to identify the most suitable company type speeds up the process.

This article is for informational purposes only and does not constitute legal advice. Please contact our team regarding your specific situation.