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Foreign Investments in Turkey: Why and how should I invest?

Foreign Investments in Turkey: Why and how should I invest?

Before the pandemic, Turkey saw $4.6 billion in foreign direct investment in January-November 2020, official data collected from the Turkey Trade Ministry and Central Bank.

The main sectors to invest according to the data collected is shown the top 5 list as IT, construction, textile, energy and recycling, shipbuilding. One of the strong points of Turkey for the investors is the country’s strategic geographical location that allows to be the bridge between Europe and Asia.

Also, Turkey’s incentives program allows many benefits for the investors such as customs duty exemption, VAT (value added tax) exemption and VAT refund.[1]

Once investors decide to form a company, they have the same rights and liabilities as local investors which means conditions for launching a business are the same that applied to local investors.

Setting up a company: Foreigners launching a company in Turkey

The foreign investors can establish a company according to the principles stated under the Turkish Commercial Code (TCC). Under the TCC there are corporate and non-corporate forms of companies that you can establish.

Corporate forms are divided into three: joint stock company, limited liability company, cooperative company. On the other hand, non-corporate forms are divided into two as collective and commandite company.

The common types of the companies are joint stock company (JSC) and Limited Liability Company (LLC).

Which documents are required to establish a company in Turkey?

  1. A petition of Trade Registration Office
  2. 5 copies of Establishment Statement to Ministry of Chamber of Commerce
  • 3 copies of notarized articles of incorporation
  1. Signature declarations of persons authorized to represent the company (2 copies)
  2. Letter of commitment prepared in accordance with Trade Registry Regulation Art. No. 29
  3. Originals of bank receipts indication that 4/10.000 of the amount of the paid in capital of company, is paid to bank account of Competition Council at Turkey Ziraat Bank.
  • For real person resident abroad: The copy of passport (apostilled).
  • For legal entities resident abroad: Certificate of Activity apostilled and approved by Turkish consulate or prepared in accordance with the Convention Abolishing the Requirement of Legalization for Foreign Public Documents within the Framework of the Hague Conference on Private International Law by the Chamber of Industry and/or Commerce or an authorized Court. (original and a copy of notarized Turkish translation)
  1. The letter of Ministry of Industry and Commerce given permission to establish company. According to the Law No. 4884 Art No.2 and the TCC Art. No. 273 the establishment of banks, private finance institutions, insurance companies, leasing companies, factoring companies, holding companies, foreign exchange offices and retails, governed by the Law of Capital Market, requires the letter of permission to be provided by the Ministry of Industry and Commerce.

Other Documents Required After the Formation (if necessary)

Companies which are subject to the provision of the Foreign Investment Law have to make the following declarations to the General Directorate of Foreign Investment

  1. Information regarding the capital and operations of the company by means of the “FDI Form for Operations” on annual basis every year until the end of May
  2. Information regarding the payments made to the share capital accounts of the company by means of the FDI Capital Date Form, within one month following each payment
  • Information regarding the share transfers made by domestic or foreign shareholders among each other or made to any domestic or foreign investor outside the company, by means of the FDI Share Transfer Data Form within one month following the share transfer.

How can we help you?

  1. Determining company title, company subject of activity, scope, centre, company representative, capital and shares.
  2. Notarization of Articles of Formation,
  • Delivery of Required Documents to Trade Registry together with Company Establishment Form,
  1. After Company established, registration at Tax Office,
  2. Start Operation.

[1] More detailed information can be found at https://www.invest.gov.tr/en/investmentguide/pages/incentives-guide.aspx.