News: Registration of company in Turkey L.S.

Turkey is located in two parts of the world: larger part of it is situated in the south-west of Asia and occupied the Anatolian peninsula, and smaller one is in southern Europe. The official name is the Republic of Turkey. Turkey shares the eastern border with Iran, Georgia, Azerbaijan and Armenia, the southern border - with the territory of Iraq, Syria, and the western border - with Greece and Bulgaria.

The Turkish coast is washed by four seas, namely: the Mediterranean Sea, the Aegean Sea, the Black Sea and Marmara Sea.

The capital of Turkey is the city of Ankara. The area of the state is just over 780 thousand km². The population is about 73 million people.

Nowadays, registering or buying company or business in Turkey has become popular service in our company. Let's consider the main aspects concerning doing business in the country. 21 free trade areas in Turkey are very attractive for companies which have good opportunities to enjoy tax benefits.

Advantages of doing business in Turkey:

- simplicity of all the procedures. The state apparatus works clearly and coherently. The abovementioned fact allows to obtain permits, licenses, certification of goods, and submit reports, etc. quickly and without any problems.

- low level of economic risks. Stability and predictability when starting business provide the foreigner with the same rights, benefits, and grants, which Turkish entrepreneurs have. But the liability is the same as that of the Turkish citizen. Another measure to stimulate business development in Turkey is the establishment of various special investment zones.

• Zones of technological development (ZTD). These are special investment zones established in different cities of the country. In total, 39 of such Technoparks are planned to be opened, and nowadays 27 of them are in operation (for example, in Antalya, where all conditions exist to support conducting research activities, as well as investing in high technologies).
• Organized industrial zones (OIZ). These are sectoral associations, among which there are hundreds of enterprises from the sphere of small and medium business. Each of them conducts its activities in the particular territory. In this territory there are benefits on taxation, credit granting, and cost of energy resources. 148 of corresponding zones are in operation today.
• Free zones. These are specially designated territories outside the customs zone, but within the territory of Turkey. They are designed to increase export-oriented investments. Standard administrative rules operate partially herein or do not apply at all. Now, 19 of such zones, located close to the ports, are already operating in Turkey.

Forms of doing business in Turkey

The simplest and most convenient forms of companies in Turkey for foreigners are:
- Limited Liability Company (LS);
- Joint Stock Company (AS).

The legislative framework

Registration and activities of the companies in Turkey are regulated by the Law №4875 "On Foreign Direct Investments".

What do you need to know in order to register the AS company in Turkey?

Registration of business in Turkey is cost-efficient and easy, if you apply for the services of our professionals.

• The authorized capital of the company is divided into shares.
• The liability of all shareholders is limited to the subscribed capital and is subject to payment by the shareholder.
• At least one shareholder (natural person / legal entity) and minimum capital that equals to 50000 Turkish liras are mandatory requirements for the company's formation in Turkey.
• The statutory fund should be contributed in full on the day of submission of the application for registration.
• The general meeting and the board of directors are also mandatory requirements for the company.
• The Board of Directors can include one participant (natural person / legal entity), and at the same time he can not be the real shareholder of the company.

Formation of the Turkish LS company

• Registration takes about 10 days.
• Only one director of any nationality is necessary for the company.
• Two shareholders of any nationality are sufficient.
• The required authorized capital equals to 5,000 Turkish liras.
• It will be necessary to come to Turkey in order to register the company (so the company's directors can sign the documents).

In general, it may be said that the registration procedure of the company in Turkey has been considerably simplified up to date. Business in Turkey is constantly growing and developing. For example, the rules requiring Turkish participation in the capital or the management of the company are no longer applied. The company can be registered with 100% foreign capital.

Today, the Limited Liability Company is the most common form of business in Turkey. Let’s consider additional information about the registration process.
In order to obtain the selected name, it is necessary to go through special  verification in the registration authorities.
The company name should contain the reference to the sphere of business activity of the enterprise.
The name shall contain the word Limited.

The presence of foreign words in the company name can be allowed only in cases when it does not contradict the law.
Upon completion of the registration procedure, the amount of the authorized capital of the enterprise should be accrued to the account in the Turkish bank.
In order to register company in Turkey foreign investor shall have the Certificate on the activities of the company, which is previously issued by the relevant authority in the country of residence of the investor. This certificate contains information regarding the current active status of the signature of the company’s executives.

Turkish rules require the registration of the company's office. Therefore, you will need to either personally conclude rental contract for premises or use the services of virtual office.
Pay attention that legal entities should register legal address with the tax authority before or on the day of registration. The obtained tax number will be officially certified by the notary. Since that moment the company in Turkey can start its operation.

The list of documents that foreign founders should have for the registration of SL company in Turkey.

The following will be required from foreign natural person:

- Notarized translation of international passport;

- Individual tax number obtained in Turkey;

- Notarized copies of residence permit (or work permit), if any;

- If the founder has already obtained the residence permit in Turkey (for the period of not less than 6 months) and he has the individual number of the foreign citizen in Turkey, he will need to provide the certificate in which this number is indicated. The certificate shall be authenticated by the Civil Status Registration Office or by the Turkish notary.

The following will be required from foreign legal entity:

- Certificate on registration of the legal entity;

- Extract from the Unified State Register of Legal Entities (USRLE);

- Decision of the Founders' Board on participation in the Turkish company. It should indicate the type of company and the representative of the parent company in this procedure;

- Power of attorney for participation in the formation of the Turkish company issued by the parent company;

- Translation of the passport of the authorized person, who is the representative of the parent company;

- Notarized copies of the residence permit (or the work permit), if any;

- Photos of the founders.

The documents shall be initially certified in the country of issue, and then they should be verified in Turkey following by subsequent translation and certification by the Turkish notary.

Taxes in Turkey

The tax system in Turkey can be classified as follows:

- taxes:

• On expenses;
• Value added tax;
• On banking transactions and insurance operations;
• Tax on wealth;
• Inheritance tax and gift tax;
• Property tax;
• Corporate income taxes;
• Stamp duty.

All enterprises in Turkey pay taxes depending on their legal status of either company or partnership.

Corporate tax at the aggregate rate of 33% is paid by corporations and limited liability companies.

The average amount of VAT in Turkey is 18%.

The stamp duty is levied on various documents, namely: contracts, bills payable, letters of credit for the major deposits, agreements, indemnity letters, financial statements and payroll records. The stamp duty is incurred as interest of the document's determined value.

The items received as gift or as inheritance are taxed at the rate from 4% to 30% of the item's value.

The property tax should be paid annually proceeding from the value of land parcel and real estate and is approximately 0.3%-0.6%. In case of sale of property, the seller and the buyer pay fee in the amount of 4.8% of the assessed value of the property being sold. The rate can be reduced to 2.4%, if the property is inserted in specie.

We will register ready made company in Turkey for you within the shortest time possible. It is now easier than ever to buy company, business in Turkey. Registering company in Turkey is one of the simplest and cheapest ways to start a legitimate international business. Registration of companies in Turkey is one of the main directions of our work.