What is Company Registration in Turkey?
Turkey has an emerging market economy as stated by the International Monetary Fund (IMF). The country is among the world’s leading producers of agricultural products, textiles, motor vehicles, ships and other transportation equipment, construction materials, consumer electronics and home appliances. The main economic sectors of Turkey like agriculture and industry are explored well and advance technology are still to be fully used to get higher economic return. The policy and strategy followed by Turkish government is appreciable and more lucrative for foreign investors as well as local. The country possesses good source of energy to fuel the growth of other aspects of economy. It is not wrong to state that the growth the country achieved is the combined effort of policy, technology, rules and regulation, transparency and good governance of government.
Types of Company
- Joint Stock Company
The stock capital is divided into shares. It’s a well-known fact that this kind of company’s shareholder’s liability is limited to the capital they subscribed and paid. A minimum of five shareholders and TRY 50,000 is needed to start the company. A stock certificate is issued to shareholders.
- Limited Liability Company
Set up with between two and 50 people or legal entities. Shareholder liability is limited to the capital they paid. A minimum investment of TRY 5,000 is needed to start the company. No stock certificate is issued.
- Collective Companies
Set up to operate under a trade name. None of the shareholders have liability limited to the capital they paid. There is no minimum investment to start a collective company
- Partnership limited by shares
- Cooperative Association
- Branch & Liaison Office
Foreigner have two ways of investment in Turkey either to Incorporate Turkish Company or to register the Branch or Liaison office for trade/business in Turkey. Foreigner can set up Branch office and liaison office, any one for the presence in Turkey.
Branch office registration in Turkey:
It does not require any shareholding. It is not an independent legal entity. No capital requirement. Repatriation of branch profit allowed subject to Dividend Withholding tax at 15%, which may reduce by Double taxation prevention treaties (DTAA). It required to be register at the Trade registry office.
List of requirements to be submitted to Trade Registry Office (TRO) for registration of Branch Office are:-
- Petition signed either by an authorized signatory under the company seal or proxy. If signed by proxy same has to be original and notarized copy of power of attorney must be attached with petition.
- Resolution of Board Meeting of the parent company to open a branch
- Certified original copy of parent company’s Article of Association (AOA)
- Power of Attorney (POA) granted by parent company in favor of its resident representative, assigning full representation and accountability.
- Five copies of Establishment Declaration Form signed by Authorized person
- Two Copies of POA stating the representative in Turkey
- If Branch Representative is a Turkish National, then notarized copy of his/her ID Card. If not, notarized copy of authorized representative’s passport translated into Turkish
- Two copies of signature declarations of branch representative under branch title.
- A letter of commitment signed by authorized person
- A chamber registry declaration from statement to be obtained from Trade registry office
Liaison Office registration in Turkey
Its main activities is to conduct market research and feasibility studies and to oversee investment opportunity in Turkish Market on behalf of the parent company. They are not allowed to carry out any commercial activities. It is mandatory to obtain approval from Ministry of Economy, General Directorate of Incentive Implementation and Foreign Investment.
If not this two form of business structure is not choose then the company need to be incorporated in Turkey as per the applicable law. So moving forward as the availability of Business form is there, applicant can choose any one form of business if the commercial activities to be undertaken in territory of Turkey.
Procedure formation of Company in turkey?
As a pre-requisite of company registration in Turkey, applicant has to maintain the proof of identity, articles of association, bylaws, memorandum of association, receipt issued by the bank verifying the payment of capital contribution, signature declaration, photos of founding shareholders, rental contract for company office address and so on as the applicable commercial law of country.
Thereafter on a complete set of requirements of incorporation of company, submit the memorandum and articles of association online at MERSIS (it is Central Registry Record System). Then execute and notarize company documents for registry at the relevant Trade Registry Office (TRO). Following documents to be submitted to TRO after incorporation of company:-
- Notarized articles of association (four copies, one original)
- In case the foreign partner is a real person, then each real person shareholder, two copies of their passports to be submitted. And Certificate of Activity from Investor’s country, board resolution from parent company, disclosure of current status and signature of company in Certificate of Activity, if proxy is doing then notarized copy of Power of Attorney has to be filed with TRO.
- Notarized signature declarations (two copies)
- Notarized identity cards of the company managers (one copy)
All the documents listed above except first item outside Turkey must be notarized or alternatively ratified by the Turkish consulate where they are issued. The original executed, notarized, and apostilled documents must be officially translated and notarized by a Turkish notary.
After all this, now the company is required to obtain tax identity number from the relevant tax office.
Further as and when required basis, company may require to obtain the other approval and permits for specific task/trade/business to be carried out in Turkey. Company is obliged to notify the establishment of trade/ business in Turkey to authority. Moreover company also require to certify the legal books like journal, ledger, inventory books, share ledger, manager’s meeting minutes book, general assembly meeting minutes books etc. by a notary public. The notary public is mandate to notify the relevant tax office about the commercial book certification.
On perusal of Turkey Trade and commercial act, it observed that the incorporation of company is easy, fast and quick process provided the applicant is ready with the prerequisite and other legal draft of requirement on registration of business. Hence it is good to have presence in Turkey for trade/business in order to cater the growing and most promising market of Middle East.