Turkish Business Environment at a Glance

Insight Turkey

First of all, I want to inform that you will not read another cliche and boring another article with same titles such as Turkey has great potential with young population and unique location.

I want to give some idea about the exact Turkish business environment with real facts.

Company Establishment Procedures

According to Doing Business Report 2020 Turkey takes place at 33th rank. Turkey jump 10 places and move up to 33rd position when we compare with last year. So what ? See below what it means;

Actually company establishment procedures are relatively easy and fast in Turkey. There are four main steps when establishing a new company

  • Trade Registry,
  • Notary and
  • Tax office and
  • Opening bank account.

If there are no missing documents, establishing company lasts maximum one week in Turkey including opening bank account. There are no hidden costs or corruption in the process such as bribery etc.

Tax Environment

Corporate income tax ratio is % 22 in Turkey. But according to new draft tax law, this ratio will decrease to % 20 in 2020 and % 18 in 2021. There are significant tax advantages to companies which render services outside Turkey. Services such as software development, engineering is subject to % 50 of corporate income tax ratio ( %11 for 2019) and please be informed that if your company takes place in technology development zones there is no corporate income tax in some circumstances.

Value Added Tax ratio is depends on the product or service that your company render. There are three ratios % 1, % 8 and % 18. But if you sell something outside Turkey there is no value added tax.

Withholding Tax: With withholding tax statement companies will pay taxes on behalf of landlords or personnels etc. The tax rate varies according to the service the company receives.

By the help of electronic banking it is very easy to pay taxes and social premiums and labor taxes of personnels

Cost for Hiring Employee

As a company owner before hiring you need to know whole cost of the employee undoubtedly. According to Turkish labor law and Social Security law there are some liabilities.Gross wage of the employee is subject to income tax and social security premiums. Employer pays this amounts to tax and social security office on behalf of employee.

Income tax varies according to employee wage ( Starts from % 15 up to % 40)

Gross Salary= Net Salary + Social security premium for employee+ Income tax+ stamp tax

Total Cost of Employee= Gross Salary + Social Security premium for employer

You can reach us for detailed calculation info@ozmconsultancy.com

Of course Turkey has a thousand challenges on its hands but so does nearly ever other country in the world and there can be absolutely no denying that the opportunities in Turkey far bigger than anywhere else in this region.

To conclude, governmental policies and laws have secured profitability and stability for a variety of national sectors. Moreover, it provides opportunities for new start-ups by aiding them with financial benefits and corporate support.

However, before entering the market, investors should be aware of the local regulations and systems, for example, the Turkish Tax system.

Please contact us if you need further details.

Özmen Mali Müşavirlik

Herkes için Vergi & Finans

Yazılım, Startup ve Fintech dünyası özelinde vergisel avantajlar, muhasebe işlemleri ve şirket kurma ile diğer bütün konularla ilgili herkesin anlayabileceği şekilde basit ve net bilgiler. evrenozmen@ozmconsultancy.com

Mali Müşavir Evren Özmen-CPA Evren ÖZMEN

Written by

We understand that you need more than just an accountant to lodge your tax return. We are redefining Accounting for SMEs. www.ozmconsultancy.com-Ataşehir İst.

Herkes için Vergi & Finans

Yazılım, Startup ve Fintech dünyası özelinde vergisel avantajlar, muhasebe işlemleri ve şirket kurma ile diğer bütün konularla ilgili herkesin anlayabileceği şekilde basit ve net bilgiler. evrenozmen@ozmconsultancy.com

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade