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A Complete Guide to Starting a Business in Turkey

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Are you a Turkish or a foreigner planning to start a business in Turkey? The first thing you should do is to know what to do and who to involve, such as a translation agency in Istanbul. Such an agency can help you translate your business content into the Turkish language. In return, you can reach out to a large audience.

Future Trans, a language service provider (LSP), believes that starting a business in Turkey has an array of prerequisites. Future Trans has been for a quarter-century providing Turkish translation services. For this reason, they have come up with a complete guide to starting a business in Turkey. Also, we have highlighted some benefits that you can derive after starting a business in Turkey. So, let’s get started.

How to Start a Small Business 

The steps of opening a small business in Turkey differ slightly from the steps of opening a corporate company. To start a small business, you need to follow the following steps:

Step 1: Acquire a tax number

Notably, all official procedures in Turkey require a tax number. To acquire the number, visit a tax office within the country. Alternatively, you can engage a business consultant to aid you in getting the tax number.

Step 2: Find an ideal business location

You cannot set up your business anywhere in Turkey and expect it to thrive. For this reason, you have to identify your target market. Such a market should have customers willing to buy your products and services. In other words, find a location with people that need your products and services as a solution to one or more of their social problems.

You should also have a legal address for the location that you choose. The same applies to any virtual office that can open online. If you opt to rent a physical place for your business, you should have a tax number and pay your rent through a business bank account but not your bank account.

Step 3: Select your business structure

You can either open a limited liability company or a corporate company. For small businesses, a limited liability company is the best option. Also, opening a limited liability company in Turkey is easy, cheap, and fast.

Notably, one of the benefits of opening a limited liability company is that the company debts do not extend to your assets. In other words, your creditors can only dispose of your company assets when the company becomes insolvent.

Step 4: Engage an accounting company

If you want your company set-up process to run smoothly in Turkey, engage an accounting company. Doing so brings in a partner who will walk you into an unforeseeable future. An accounting company can help you prepare the master agreement, apply for the trade registry, prepare tax documents, and prepare your power of attorney.

Notably, the setting up process of a small business in Turkey is not an easy process. However, partnering with an accounting company connects you to a professional partner with vast experience setting up a company.

Step 5: Register your small business

Your small business should have a legal nature. For this reason, you have to register it from legal offices. After engaging an accounting company that prepares all the necessary legal documents, you should sign the documents and take them to a notary office for signature. However, you are the one to sign a power of attorney on behalf of your business.

Step 6: Open a bank account

You need a business bank account when running a business in Turkey. The account enables you to carry out all financial transactions. If you do not know the demands of Turkish banks, your accounting partner or consultant can inform you about them. Alternatively, you can follow the following simple procedure:

  1. Have the necessary documents, including an identity card or passport; proof of address, such as a utility bill; and tax id number.
  2. Visit your preferred Turkish bank.
  3. Fill out the application form.
  4. Provide your Articles of Association if you are opening a bank account for a company
  5. Have the bank open an account for you.

How to Start a Company in Turkey

Now that we have discussed how to open a small business in Turkey, let’s find out how to open a company in the same country.

Notably, you can open the following types of companies in Turkey: Joint-stock company, limited company, collective company, cooperative, and limited partnership (ordinary limited partnership or shareholding limited partnership).

The following are the steps to follow when opening a company in Turkey:

  1. Prepare the company contract

The first step entails the preparation of the company contract. Notably, the founding shareholders should sign the contract. Foreigners should affix their passport numbers on the contract, while the residents should include their ID numbers.

  1. Prepare the signatures of the officials

All company officials should prepare a signature declaration. Afterward, a competent authority should approve the signatures. This exercise takes place at the Turkish trade registry office.

  1. Pay the competition authority cash and share capital

You should deposit 0.04% of your company’s capital to the competition authority’s bank account. This amount represents the competition authority share. You don’t need to go to a bank to make this payment. Instead, pay it with other establishment costs from the trade registry office.

If opening a joint stock company, you should also make a cash deposit of 25% of your company’s share capital. This payment should take place before the registration of the company.

  1. Apply for registration from the trade registry directorate

The trade directorate registry is the body that completes company registration in Turkey.

Documents Needed for Registration of Companies in Turkey

Each company structure has a set of documents that it should submit to the trade registry directorate for consideration of registration. Some of the documents are as follows:

Joint Stock Company

  • The Articles of Association
  • A proof of the 25% cash share deposit
  • A proof of the payment of the Competition Authority’s share
  • Valuation reports (if any)
  • A non-restriction letter if there is any capital paid in kind
  • Documents showing any capital paid in kind
  • Signature declarations of the officials

Limited Company

  • An approved company agreement
  • A non-restriction letter if there is any capital paid in kind
  • Documents showing any capital paid in kind
  • Company contract
  • A proof of the payment of the Competition Authority’s share

Cooperative

  • Company contract
  • Authorization letter of establishment
  • Signature declarations of the officials

Limited Partnership and Collective Company

  • Company agreement
  • An approved copy of signatures
  • A valuation report of in-kind capital
  • A non-restriction letter if there is any capital paid in kind
  • Documents showing any capital paid in kind

Advantages of starting a Business in Turkey

There are several reasons why starting a business in Turkey is beneficial. Let us look at some of the benefits:

Low Cost of Operation

Every year, a large number of students who graduate from Turkish universities start looking for jobs. In return, the cost of labor is low. Also, the cost of supplies in Turkey is relatively low. For this reason, you can operate a business in Turkey at low operation costs compared with the UK and US.

High Consumer Spending

A high percentage of the Turkish population consists of young people who are zealous in spending. Young Turkish people like spending on what is trending in the market, including fashion, technology, and popular brands.

If you incline your business to the needs of the young people in Turkey, you can operate a successful business. However, you should ensure that your business aligns with the prevailing trends.

Availability of Local Manufacturers

Turkey has several local manufacturers. Additionally, the manufacturers are always willing to support budding businesses. The other positive aspect of the local Turkish manufacturers is that they are always ready to supply small quantities of goods. For these reasons, you can operate a successful business in Turkey because of the support from the local manufacturers.

Government Incentives

The Turkish government always supports new investors by reducing investment costs. This move is quite a relief to any new investor willing to start a business in Turkey. If you acquire the Investment Incentive Certificate (IIC), you can get the following incentives from the Turkish government:

  • Income tax withholding relief
  • Interest rate relief
  • Land allocation
  • Social security premium relief
  • Tax deduction
  • VAT and customs duty exemption
  • VAT refund

Given all these incentives, the Turkish government does all it can to create a friendly business environment.

Turkish Citizenship

If you establish a business in Turkey, there is a high probability of becoming a Turkish citizen. The government rolled out this program in 2017. To acquire Turkish citizenship, you have to meet the following requirements:

  • Invest over $500,000
  • Employ 50 people
  • Purchase immovable assets worth over $250,000
  • Maintain a bank deposit of over $500,000 for over three years
  • Buy government debt securities worth over $500,000 and keep them for over three years

The Bottom Line

Turkey is a globally-known business hub. For this reason, you can get value for your investment after starting a business in this country. If you follow the steps that we have discussed, you are on your way to starting a thriving business in Turkey.

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