FOREIGNERS WHO ESTABLISH COMPANY IN TURKEY

If foreign nationals want to establish a company in Turkey, many laws must be considered. For this reason, foreign nationals should contact a foreign company lawyer who is an expert in the field before establishing a company. One of the problems we frequently encounter in practice is that foreigners cannot contact lawyers who are experts in their fields before establishing a company. Foreign investors accept the articles of association and other works presented to them in ready-made format by contacting non-lawyers. However, the issue of establishing a company by foreigners should proceed in the same direction with each desired business and purpose. It should not be forgotten that the same articles of association, which are in a ready-made format, stereotyped and presented to each company in this way, may cause legal problems in the future.

Since 2003, many regulations have been made in the field of establishing companies by foreigners in the Republic of Turkey. The most important of these regulations is the law numbered 4875. The purpose of the Law No. 4875 is to regulate the principles regarding the promotion of foreign direct investments, the protection of the rights of foreign investors and compliance with international standards in the definition of investment and investor, the transformation of the permit and approval system into an information system in the realization of foreign direct investments, and the increase of foreign direct investments through the determined policies. The mentioned law covers the business and transactions to be applied to foreign direct investments and investors. In addition to this law, there are many laws that apply to foreigners. Some of these are the Law No. 4875, which regulates the company establishment and commercial activities of foreigners, as well as the Turkish Commercial Law No. 6102, the Turkish Law of Obligations No. 6098, the Regulation on the Implementation of the Law No. 4875, and the Law No. 4817 on Work Permits of Foreigners.

Can Foreign Nationals Establish a Company in Turkey?

Foreign nationals can establish a company in Turkey. The law to be applied to foreign nationals in the Republic of Turkey is the Foreign Direct Investment Law dated 05.06.2003 and numbered 4875, which was published in the Official Gazette dated 17.06.2003.

Previously, the Foreign Capital Incentive Law No. 6224, which entered into force on 18.01.1954 regarding foreign investors within the borders of Turkey, was being implemented. However, with the enactment of Law No. 4875, Law No. 6224 was repealed.

Can Foreigners Establish All Types of Companies in Turkey?

Foreigners could only establish joint stock companies and limited liability companies with Law No. 6224. However, with the law numbered 4875, foreigners are treated the same as Turkish companies in Turkey and can establish all types of companies.

What Types of Companies Can Foreigners Establish in Turkey?

Foreign investors in Turkey are subject to equal treatment with domestic investors. For this reason, they can establish all types of companies that Turks can establish. Types of companies that foreigners can establish: Sole Proprietorships; Collective Company, Limited Partnership, Ordinary Partnership, Cooperative Companies

Capital Companies: Joint Stock Company, Limited Liability Company, Limited Partnership in which the Capital is Divided into Shares

However, it should be noted that these types of companies require detailed explanation. For this reason, we will not go into detail about the types of companies in this article.

How Can Foreigners Establish a Company? What should foreigners do when establish a company? What should foreigners who want to establish a company in Turkey do? How Does the Legal Procedure Proceed?

• Firstly, preliminary preparation should be made regarding the establishment of the company.
• The type of company to be established by foreigners should be determined.
• The main contract regarding the activities of the company should be prepared.
• An application for establishment should be made through the Central Registration System.
• Preparation of all documents and notarization
• Obtaining a tax number of the company to be established
• The process of depositing a certain percentage of the capital into the account of the Competition Authority.
• Depositing a certain amount of the committed capital into the company bank account
• Documentation of the amount deposited into the bank account.
• Making applications for the registration of the company to the relevant directorates
• Obtaining a tax plate by going to the relevant tax office
• Obtaining a social security number
• Certification of the books that must be in the name of the company.
• Follow-up of the Company Establishment Statement by the Registry of Commerce
• Requesting a Company Establishment Statement from the relevant tax office
• Creation of specimen of signature
• Uploading company-related documents to the system
• Creation of the record in the Data Controllers Registry Information System (VERBIS)
• Foreign companies opening branches in Turkey (When necessary)

As we briefly mentioned above, the procedures for establishing a company in Turkey by foreigners involve complex procedures. All transactions must be in accordance with current legislation. For this reason, it would be beneficial for foreign investors to agree with a lawyer who is an expert in the field for company formation. Foreigners who want to establish a company in Turkey should be informed about the process and should execute this complex system in accordance with the law. For this reason, it is important to act in accordance with the laws of the Republic of Turkey in order not to encounter legal problems, loss of money, loss of time and not to impose some penalties on foreigners.

IMPORTANT WARNINGS – INFORMATION ON BENEFITS

• The issue to be considered is that the company should act in accordance with the Turkish Legal System from the beginning to the end during the establishment phase. It is necessary to work with lawyers who are experts in their field. It is important that the company establishment procedures are carried out by lawyers who are well-versed in the Turkish legal system and legislation. Companies that are not established in full compliance with Turkish laws and regulations face legal problems in the future. It will cause loss of time and money as well as legal problems.
• Foreign persons who want to establish a company must also be a data controller in certain conditions and situations. It is obligatory to register them in the system called VERBIS. This process, which took its place in the Turkish Legal System in 2016, is mandatory. Otherwise, serious sanctions may come to the agenda for foreigners who want to establish a company in Turkey.
• According to the laws of the Republic of Turkey, the expropriation or nationalization of foreign direct investments is limited.
• Foreign investors have the assurance of freely transferring their profits and some other income abroad.
• Foreigners who want to establish a company in Turkey have the right to resort to national or international arbitration and other dispute resolution methods due to possible legal problems.
• Foreigners who want to open a company in Turkey have the right to open a foreign company liaison office and a foreign company branch, just like a domestic investor.
• The Republic of Turkey has signed many international agreements to protect the rights of foreign investors.
• There are tax advantages for foreign investors. There are several advantages for young investors under the age of 29, such as not paying taxes for 1 year.
• Foreign companies opening branches in Turkey and foreign companies establishing liaison offices in Turkey should be carried out by lawyers who are experts in their field. Otherwise, it is obvious that legal problems will be encountered.

As we briefly mentioned above, some documents must be prepared and submitted in the legal procedures required for foreigners to establish a company in Turkey. Information regarding these documents must be made correctly. For this reason, it is necessary to obtain information from lawyers who are experts in the field in the process of establishing a company for foreigners. We provide services in subjects such as Ankara Foreign company lawyer, Istanbul Foreign company lawyer, Antalya foreign company lawyer and Izmir Foreign company lawyer, which are frequently sought in this field.