Foreigners establishing a company in Turkey

Turkey has become an attractive market for foreign investors in recent years. The main factors behind the desire of foreigners to establish companies in Turkey are as follows:

• Strategic location of the country: Proximity to European markets, advantages offered under free trade agreements.
• Large market volume: Both population density and penetration to other important markets.
• Skilled labor force: Globally recognized Turkish workforce and sectoral experience.

You can learn what you wonder about foreign nationals establishing a company in Turkey from this article.

Establishment of companies by foreign persons

According to the Law on Foreigners and International Protection, a foreigner is a person who has no citizenship ties with the Republic of Turkey. Within the scope of company establishment procedures in Turkey, foreign natural and legal persons are subject to the same rules as domestic investors.

Company Establishment Stages in Turkey

The steps to be followed for the establishment of a company are as follows:

• Drafting the company agreement and certifying the signatures of the founders: In the company establishment process, which is initiated by creating a free membership on the MERSIS website, Turkish citizens can make transactions with their ID numbers and foreigners can make transactions with their passport numbers.
• Preparation of signature declarations of company officials: The signatures of authorized persons are approved by the competent authority. In Turkey, this can be done at any trade registry office.
• Payment of the competition authority share and cash capital: The "Competition Authority Share" of the company capital at the rate stipulated by law may be paid at the trade registry office together with other company establishment procedures. This rate may vary according to the type of company to be established.
• Registration procedures: Registration procedures can be completed with the relevant documents at the trade registry office. It is also possible to complete the incorporation procedures through a representative authorized by a power of attorney.

Conditions for foreigners to open a company/business in Turkey

This issue is regulated under the "Regulation on Workplace Opening and Operation Licenses". Accordingly, foreigners who will open a workplace must obtain a work permit from the Ministry of Labor and Social Security before starting to work.

Foreigners who want to open a workplace and work on their own behalf can apply for a work permit after the establishment procedures are completed according to the planned workplace. Foreigners who are granted a work permit apply to the relevant municipality with this document and request a workplace opening and work license.

How to obtain a foreign work permit?

The steps to obtain a foreign work permit are as follows:

• Create an employer registration in the e-permit system. There are three types of employer registration in the system:
  • Employer of domestic services: Apply with the Turkish ID number of the employer.
  • Self-employed foreigner: The application is made with the foreigner's Turkish ID number starting with 99.
  • New workplace: In this option, which covers all company types, transactions can be made with the 26-digit SSI registration number of the workplace.
• Work permit application: After the employer registration is created, the work permit application for the foreigner to work is made through the e-izin system. Application types are as follows:
  • First domestic application: It is made for foreigners who are in Turkey and have a residence permit for at least 6 months.
  • First application abroad: Foreigners without a residence permit apply for a work visa at the Turkish foreign representative offices. They will be given a 16-digit reference number.
  • International protection application: This is applied for foreigners in this status.
  • Temporary protection application: For foreigners of Syrian nationality with this status.
  • Extension application: It is made for the extension of an ongoing work permit.

Advantages of setting up a company in Turkey

The establishment of a company in Turkey by foreign investors provides various country-specific advantages. Some of the situations that may provide advantages for foreigners considering establishing a company in Turkey are as follows:

• Government incentives: According to the information provided by the Investment Office of the Presidency of the Republic of Turkey, new and expansion investments are supported by the government with incentives. Encouraging new investments by minimizing start-up costs is a significant advantage for foreigners considering starting a business in Turkey. Incentives offered by the government include VAT exemption on machinery, customs duty exemption, land allocation, interest rate support, infrastructure support, training support, purchase guarantee, and many more.
• Strong economy: Based on the average annual growth rates recorded in recent years, Turkey is considered one of the fastest emerging economies among developing countries.
• Large domestic and regional markets: Turkey's population -together with its dynamic young population- offer a favorable market environment for foreign investors. In addition, thanks to the free trade agreements to which Turkey is a party, foreign investors establishing companies in Turkey have access to a vast market environment where they can reach approximately one billion consumers.
• The country's strategic location: For multinational companies, the country's strategic location offers a crucial advantage when it comes to establishing global connections.
• Young and dynamic population: Turkey has a dynamic population, with half of the population aged 33 and under. This factor underlines its strong purchasing potential.
• Skilled and competitive labor force: The labor force available in Turkey is considered highly productive and well-educated.
• Political support: A new generation of reforms, strengthened by uninterrupted reform processes and cooperation between the public and private sectors, provides a favorable business environment for foreign investors in Turkey.