HOW TO ESTABLISH A CORPORATION IN TURKEY AS A FOREIGNER?

“Corporation” is a type of commercial company which can be established based on the 269. Artc. of Turkish Commercial Law no 6762. It is a no-liability type company which can be established with at least 50.000 Turkish Lira.

With the “Foreign Investment Law”, foreigners are able to form and own corporations in Turkey with the same procedure as Turkish investors. In this article, we will explain to our clients how to establish a corporation in Turkey in a step-by-step manner.

1- PREPARING AND SIGNING ARTICLES OF INCORPORATION

According to the Turkish commercial Law, every corporation must have its articles of incorporation prepared and agreed by the founder parties. The law states that this document is “the Constitution of the Company”. The content of the articles of incorporation include; Official name of the incorporation, shareholders and number of shares, company’s address, the CEO of the corporation, the capital (which ¼ of it has to be paid upfront).

2- APPLYING TO THE REGISTRY OF COMMERCE

With the documents explained above, the formal application can be carried through in the Office of Registry of Commerce. First, the entire articles of incorporation must be installed to the central registry system of MERSIS. Then, the authorized personnel will go to the Office of Registry of Commerce and sign the articles. Of course, the authorized person must bring the necessary document which proves that he/she is indeed authorized by the shareholders. This document is called “Statement of Signature”.

3- OBTAINING A POTENTIAL TAX NUMBER

After applying to the Registry of Commerce, MERSIS system will automatically provide the client with a potential tax number. The reason for this number is that since the corporation is still does not exist on paper, it technically does not have tax number and can not open a bank account. With the potential tax number, the client will be able to open a bank account for the corporation. After establishing the company completely and obtaining the real tax number, the potential tax number will be invalid.

4- DEPOSITING THE CAPITAL OF THE CORPORATION TO A BANK ACCOUNT

At this stage, the founders of the incorporation must deposit at least %25 of the agreed capital to the bank account of the corporation. The remaining %75 of the capital has to be paid by the owners in 24 months. While the necessity of depositing %25 of the capital upfront does not exist for Limited liability companies, the law brings this obligation to the corporation founders. The reason for this is that this type of company provides no liability to the owners. So, the law aims to protect the commercial environment in the country by eliminating the risky corporations.

5- CONFIRMATION OF THE COMMERCİAL LEDGERS

In Turkey, all corporations must have certain ledgers which are confirmed by the either the official in the Office of Registry of Commerce, or a notary. These ledgers are the general journey ledger, general ledger, inventory ledger, stamp duty ledger, Management decisions ledger, shareholder’s ledger, general assembly ledger and negotiations ledger. These ledgers contain important information regarding the management and commercial activity of the company. Since it is a very important topic, the content of these ledgers will be explained in another article.

6- OBTAINING AUTHORIZED SIGNATORY LIST

After the registry of the corporation in the registry Office, the company is officially formed. So, at this stage, the general manager of the company can obtain the authorized signatory list from a notary. This document is mandatory for every formal action that the management takes. The document have two goals: Firstly, the signature samples on the document will help determine fraud; secondly, it will form a written and legally confirmed basis for corporate decisions.

7- APPLYING TO THE RELEVANT TAX OFFICE

After completing the registry and obtaining authorized signatory list, the application to the tax office must be made. Every corporation in Turkey must obtain a tax certificate for proper taxation of the economic activity. The application requires articles of corporation, authorized signatory list, rent contract, ID cards, place of residence documents.

8- OUR SERVICES

As Alfa Law Fir, we provide our clients with full-scope legal consultancy regarding establishing corporations. With the Power of Attorney document signed by you, we will be able to complete every one of the above steps without you having to personally coming to Turkey. Some individuals trust accountants for establishing companies but these people lack the proper legal knowledge. Therefore, we strongly recommend everyone to hire a lawyer for establishing corporations and LLCs.