Pursuant to the Turkish Commercial Code (“TCC”) numbered 6102, the corporations consist of collective company, commanded company, ordinary partnership, joint stock company and limited liability company. Within the scope of the TCC, collective and commanded company are deemed as partnerships whereas joint stock, limited liability and commanded company limited by the shares are deemed as corporations.

Many important amendments were introduced by the TCC which entered into force in 2012 such as single shareholder joint stock and limited liability company, single member board, repealing the necessity of being a shareholder for the board members and the application of ultra vires principle.

In practice, limited liability and joint stock companies are preferred by domestic and foreign investors and entrepreneurs. Therefore in our article which is aimed to be a guidebook for company incorporation procedures, we will put emphasis on incorporation procedures for limited liability and joint stock companies, proceedings following the incorporation, legal scope of protection of foreign investments and incentive and exemptions for investments in Turkey.


The proceedings are started from the database governed by the Ministry of Customs and Trade which is defined as the Central Registration System (“CRS”) for incorporation of joint stock and limited liability companies.

After drafting the Articles of Incorporation via the CRS, the application for incorporation & registration is submitted to the Registry of Commerce where the company will be located in.

As the registry records are kept in Turkish, all documents issued as per foreign law in a foreign country shall be legalised by a Turkish Consulate or as per the Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (“Apostille Convention”) and submitted with a notarised Turkish translation.

1.1. Incorporation Procedures for a Joint Stock Company

Pursuant to the TCC, a joint stock company is a company whose capital is determined and divided into shares and is liable for its debts only up to the amount of its assets. The liability of shareholders is only to the company and limited to the subscribed capital paid by the shareholders. The joint stock companies can be incorporated for any economic purpose and subject that are not prohibited by law.

The minimum capital of 50.000.-TL is required for incorporation of a joint stock company and it can be established with a single shareholder. The minimum capital shall not be less than 100.000.-TL for nun-public joint stock companies which accepted the registered capital system.

The following documents are required to be submitted to the registry of commerce for the incorporation of joint stock companies:

-Articles of Incorporation prepared via the CRS with the incorporators’ notarised signature or which is signed before the manager or deputy manager of the registry of commerce,

-Registry application signed by the board or authorised members,

-Incorporation notification signed by the authorised persons,

-Bank letter showing that at least 25% of the share values have been deposited to the bank as per the law,

-Bank receipt showing that 4 ‰ of the capital has been deposited to the bank as per the Law on Protection of Competition numbered 4054,

-In case of a capital in kind is subscribed by the shareholders, documents such as valuation reports or registry certificate that are required,

-Approval or letter of consent for companies that are required to obtain approval or consent of the Ministry or other administrative authorities[1],

-Chamber registration declaration,

-Letter showing the non-shareholding board members’ acceptance of their duty with their notarised signatures,

-For foreign real person shareholders, notary certified passport copies, tax number or document showing their foreigner id number, also notary certified residence permit if they are residing in Turkey,

-For foreign legal person shareholders, board resolution for incorporation of a company in Turkey, certificate of activity and documents showing the authority of the persons that signed the documents on behalf of the company,

-If a legal person is appointed as a board member, the notarised copy of the authorised body’s decision for appointing a real person on behalf of and together with the legal person, which should include full name, address, nationality, and T.R. ID number (tax number or foreigner ID number for foreigners), notarised passport copy with Turkish translation together with the residence permit in case of appointment of a foreign real person that is residing in Turkey,

-If a foreign legal person is appointed as a non-shareholder board member, a document showing current registration of the legal person (this document should be notarised by notaries of the related country and approved by the Turkish consulate located within this country or as per the Apostille Convention and notarised Turkish translation of these should also be submitted),

-Signature of statement of the persons authorised to represent and bind the company issued before the notary.

The Articles of Incorporation is required to be in writing and the signatures of the incorporators shall either be notarised or the document shall be signed before the manager or deputy manager of the registry of commerce.

The Articles of Incorporation will include the trade name and registered office of the company, field of operation, capital of the company and par value of each share, whether the shares will be registered or bearer shares, any privileges or share transfer restrictions related to the shares, number of the board members, etc. The first board members are also appointed with the Articles of Incorporation.

The joint stock company shall have a board consisting of one or more board members which are appointed by the articles of incorporation or the general assembly. The board members are appointed for a maximum of three years. In case of an appointment of a legal person, one real person that is appointed on behalf of the legal person should be registered and declared with the legal person.

Pursuant to the TCC, certain share groups or shareholders which form a group due to their qualifications and specifications or the minority shareholders may be given the right to be represented within board provided that it is set out within the Articles of Association.

The general assemblies are convened as ordinary and extraordinary. The ordinary general assembly shall be convened within three months as of the end of the each activity period.

1.2. Incorporation Procedures for Limited Liability Companies

A limited liability company is established with one or more shareholder (a real person or a legal entity) under a trading name with defined and paid up subscribed capital. The shareholders are not liable for debts of the company and their liability is only to the company for payment of their subscribed capital and fulfilling the additional payment and auxiliary deeds required within the articles of incorporation. A limited liability company can be established for any economic purpose and subject that are not prohibited by law.

The minimum capital required for limited liability companies is 10.000.-TL and it can be established with a single shareholder.

The incorporation procedures are very similar for joint stock and limited liability companies. Together with this, the value per share should be at least 25.-TL or its multiples for each shareholder. The par value of each share and the number of shares of each shareholder should be set out within the articles of incorporation.

The general managers shall convene the partners’ meeting. The annual partners’ meeting must be held within 3 months as of the end of the fiscal year.

The representation and management of company may be assigned to one or more shareholders with the title of general manager or all the shareholders or third parties by the articles of incorporation. At least one shareholder should have the right to manage and represent the company.

1.3. Differences Between Joint Stock and Limited Liability Company

In terms of shareholder liability, the liability shareholders of both companies are limited to the subscribed capital of the company under Turkish law. In general, the joint stock companies are subject to detailed provisions in terms of management and auditing and tax advantages are applied to them. On the other hand, incorporation as a joint stock company is required for obtaining establishment and operation permit for regulated sectors such as banking.

The differences between joint stock and limited liability company are set out briefly below to be guiding:

1.4. Procedures after Incorporation

After the incorporation, the following procedures should be undertaken in general:

-Issuing the signatory circular of the persons authorised to represent the company before the notary public,

-Obtaining tax id of the company and issuing tax registration certificate,

-During the phase of incorporation sending the notification by the Trade Registry Office if there is a foreign real or legal person shareholder pursuant to the Foreign Direct Investment Law,

-Obtaining business license,

-In case of employment registration to the Social Security Institution and making the notifications.


2.1. Law on the International Labour Force Numbered 6735

Within the scope of the reform in 2016, Law on the International Labour Force (“Law”) numbered 6735 entered into force in order to determine the international labour policies of Turkey and their application. The Law determines the procedures and principles that will be applied to work permits of foreigners and work permit exemptions.

Within the scope of the Law, work permits may be issued as definite, indefinite, and independent permits. For the first applications, the work permit may be issued for a maximum period of one year. For foreigners holding long-term residency permit or at least eight years legal work permit, application can be made for an indefinite work permit.

Pursuant to the Law, manager of a limited company and board member of a joint stock company that are also a shareholder may work via obtaining a work permit. On the other hand, for companies established as per the provisions of the TCC, board members of joint stock companies that do not reside in Turkey or shareholders of other companies who do not have management capability may qualify for work permit exemptions. Therefore these persons may work via obtaining a work permit exemption.

The domestic applications for work permits are submitted directly to the Ministry and the applications abroad are submitted to the Turkish Republic consulates or embassies of the country where the foreigner is a citizen of or is legally residing. To make a domestic application, the foreigner is required to have a residency permit of at least 6 months with continuing validity.

For applications abroad, work permit applications to the Turkish Republic foreign missions is followed by an online application of the employer and submitting the relevant documents to the Ministry.

2.2. Employment of Foreign Personnel in Foreign Direct Investments

Pursuant to the Law on Foreign Direct Investments (“FDI Law”) which will be detailed below, the procedures and principles of foreign personnel which will be employed within companies operating within the scope of the FDI Law are regulated within the Regulation on Employment of Foreign Personnel in Foreign Direct Investments.

Within the scope above, this Regulation shall be applied to the employment of foreign key personnel in special foreign direct investments and liaison offices.

The special foreign direct investment is a company or a branch within the scope of the FDI Law which fulfil at least one of the conditions below:

a. the company’s or branch’s last annual turnover amounting to at least 100,2 Million Turkish Lira, under the condition that the total capital share of the foreign shareholders amounts to at least 1.333.150 Turkish Lira,

b. the company’s or branch’s last annual exports amounting to at least 1 million US Dollars, under the condition that the total capital share of the foreign shareholders amounts to at least 1.133.150 Turkish Lira,

c. employment of at least 250 registered personnel with the company or branch within the last year, under the condition that the total capital share of the foreign shareholders amounts to at least 1.133.150 Turkish Lira,

d. if the company or branch is making an investment, the minimum fixed investment amount foreseen shall being at least 33,3 Million Turkish Lira,

e. the principal company featuring any direct foreign investment in at least one more country apart from the country where its head offices are situated.

For liaison offices, work permits are issued to a maximum of one person limited with the period of letter of authority provided that a letter of authorization is obtained from the Ministry of Economy.

The personnel of any company being incorporated in Turkey and that is a corporate body, featuring at least one of the following conditions shall be considered as “Key Personnel”:


· Working in the company’s senior management or executive position,

· Managing the entire or a part of the company,

· Supervising or checking the works of the company’s auditors, administrative or technical personnel,

· Taking new personnel to the company or terminating the employment of those existing or making suggestions in this subjects;

any person in charge of at least one of the above fields or authorized in these matters; acting in the position of the company’s shareholder, chairman of the board of directors, member of the board of directors, general manager, deputy general manager, company manager, deputy company manager and similar positions.

B) Any person featuring the knowledge considered essential for the company’s services, research devices, technics or methods,

C) Maximum one person in the liaison offices, who has been issued a letter of authorizaton by the

principal company abroad.

Therefore work permits are issued by the Ministry of Labour and Social Security for key personnel that will be employed in foreign direct investments.


3.1. The Foreign Direct Investment Law

Establishing a new company or branch or becoming a shareholder under certain conditions are within the scope of the FDI Law numbered 4875.

As per Article 3 of the FDI Law, unless stipulated by international agreements and other special laws, foreign investors are free to make foreign direct investments in Turkey and foreign investors shall be subject to equal treatment with domestic investors. Foreign direct investments shall not be expropriated or nationalised, except for public interest and upon compensation in accordance with due process of law.

Within the scope of the FDI Law, foreign investors can freely transfer abroad: net profits, dividends, proceeds from the sale or liquidation of all or any part of an investment, compensation payments, amounts arising from license, management and similar agreements, and reimbursements and interest payments arising from foreign loans through banks or special financial institutions.

For the settlement of disputes arising from investment agreements subject to private law and investment disputes arising from public service concessions contracts and conditions which are concluded with foreign investors, foreign investors can apply either to the authorised local courts, or to national or international arbitration or other means of dispute settlement, provided that the conditions in the related regulations are fulfilled and the parties agree thereon.

3.2. Bilateral Investment Promotion and Protection Agreements

Turkey took the necessary steps for protection of rights and interests of foreign investors within the scope of the law by Investment Promotion and Protection Agreements that were concluded with 98 countries up to today. These agreements aim to provide the legal security that might be needed by the investors and to minimize the legal risks that may be encountered by them.

The investors acquire the means to have the amount of compensation which will be equivalent to the value of the investment immediately before the action of expropriation, nationalization or confiscation, the right to apply for arbitration in case of a dispute. The scope of legal protections that investors may benefit from are widened by protective provisions such as most favorable nation or national treatment.

3.3. Double Taxation Agreements

As known, double taxation agreements are signed for prevention of taxation of the same income for the same period by two signatory countries. Within this scope, double taxation is prevented via method of exemption or offsetting. Turkey signed double taxation agreements with 82 countries up to today. Within this scope there are agreements signed with many EU members and countries such as USA, Norway, Qatar, Denmark, Malta.


The Council of Ministers’ Decision numbered 2012/3305 K. (“Decision”) regulates the general incentive system of Turkey.

The incentive system consists of five different schemes:

-General Investment Incentives Scheme

-Regional Investment Incentives Scheme

-Priority Investments Incentives Scheme

-Large-Scale Investment Incentives Scheme

-Strategic Investment Incentives Scheme

With reference to application of the incentives as per the Decision, provinces are divided to six regions as per their socio-economic level of development. The investments benefit from VAT exemption, customs duty exemption, tax reduction, income tax withholding allowance, social security premium support (employer’s share), social security premium support (employee’s share), interest rate support, land allocation, VAT refund in general.

The scope and period of the incentives will differentiate as per the region where the investment is made and the scheme it is included into.

For instance, within the scope of the large-scale investment incentives scheme, investments made to certain sectors shall benefit from the applicable incentives if the minimum fixed investment amount reaches to the amount set out within the Decision. Accordingly investments for production of chemical products, harbours, harbour services and airport investments, automotive main industry and automotive supply industry, production of pharmaceuticals, production of machinery are within large-scale investments.

For strategic investment incentives scheme, investments for production of intermediate goods or products with import dependency are supported. Investments within sectors such as mining, freight and passenger transportation via railway or seaway, defense industry are supported within the scope of priority investments.

Bağ&Günen Law Firm provides services to its domestic and foreign clients in terms of registration procedures such as company incorporation, amendment of articles of incorporation, increase or decrease of capital and legislation on foreign direct investment and investment incentives and their application. For further information please contact us from

[1] As per the related Communique; incorporation and amendment of articles of association are subject to the permission of the Ministry of Customs and Trade which include companies such as banks, financial leasing companies, factoring companies, insurance companies. Together with this, the Ministry may only conduct a review in terms of conformity with the imperative provisions of the law.