Foreign investors setting up in Türkiye are frequently surprised by how little the law distinguishes them from domestic ones. There is no requirement for a Turkish partner, no cap on foreign shareholding, no special approval for most sectors, and no separate register of foreign companies. A company formed by a foreign national is a Turkish company. This article sets out the framework, the choice between company types, what formation actually involves, and the obligations that follow.
The principle of equal treatment
The Foreign Direct Investment Law No. 4875 establishes the position directly: foreign investors are subject to equal treatment with domestic investors. Investment is free unless restricted by international agreements or specific legislation, and there is no prior approval or screening requirement for ordinary commercial activity.
Practically this means:
- a company may be one hundred per cent foreign-owned;
- no Turkish shareholder or director is required;
- profits, dividends, sale proceeds and liquidation proceeds may be transferred abroad through banks;
- the company has the same rights and obligations as any other Turkish company.
Restrictions exist in defined sectors — broadcasting, aviation, maritime, mining, energy, defence and certain regulated financial activities — where licensing rules or shareholding limits apply. Outside them, the default is freedom.
Choosing the company type
Two forms account for almost all foreign investment: the limited company (limited şirket) and the joint stock company (anonim şirket), both governed by the Turkish Commercial Code No. 6102.
| Limited (Ltd. Şti.) | Joint stock (A.Ş.) | |
|---|---|---|
| Minimum capital | TRY 50,000 | TRY 250,000 |
| Capital paid at formation | No advance blocking required | 25% of cash capital blocked before registration |
| Shareholders | 1 to 50 | 1 or more, no maximum |
| Management | One or more managers | Board of directors |
| Share transfer | Notarised, general assembly approval, registration | Simpler; shares may be issued as certificates |
| Shareholder liability for public debts | Pro rata to shareholding, personally | Generally none for a non-managing shareholder |
| Tax on share sale | Taxable | Exemption available after two years for certificated shares |
The row that decides most cases is liability for public debts. In a limited company, shareholders are personally liable, pro rata to their shareholding, for the company's unpaid public debts — taxes and social security contributions — where they cannot be collected from the company. In a joint stock company, a shareholder who is not on the board does not carry that exposure.
For a small consultancy the limited company is simpler and cheaper. For a business that will carry payroll, tax exposure, or outside investment, the joint stock company is usually the better structure, and the difference in minimum capital is small relative to what it protects against.
One further point of timing: companies formed before 2024 with capital below the current minimums must increase them by 31 December 2026 or face dissolution. An investor acquiring an existing company should check this before completing.
Formation, step by step
- Tax identification numbers for each foreign shareholder and director — obtainable online or at a tax office on the strength of a passport.
- Articles of association prepared and entered in MERSIS, the central trade registry system.
- Notarisation of signature declarations and, where required, documents.
- Capital deposit — for a joint stock company, twenty-five per cent of cash capital blocked in a bank before registration. A competition authority contribution is also payable on registration.
- Trade registry application, after which the company acquires legal personality on registration and is announced in the Trade Registry Gazette.
- Tax office registration, including a visit to the premises.
- Social security registration as an employer, before any employee starts.
- Municipal permits and any sectoral licences.
- Books and e-systems — accounting records, e-invoice and e-ledger registration where thresholds apply.
For a straightforward company with all documents in order, registration is a matter of days rather than weeks. Where shareholders are foreign companies, their corporate documents must be apostilled and translated, and that is usually the slowest element.
Formation without travelling
The entire process can be completed by a lawyer under a power of attorney, provided the document contains express authority to establish a company, to sign the articles of association, to represent the shareholder before the trade registry, MERSIS, the tax office and the social security institution, and to open and operate bank accounts.
The power of attorney is issued at a Turkish consulate or before a foreign notary with apostille and sworn translation. Where the shareholder is a foreign company, the corporate resolution authorising the investment, the certificate of incorporation and the signature authorities must also be apostilled and translated.
Preparing that documentation is the part that takes time. The Turkish steps are quick.
Work permits: the point most investors get wrong
Holding shares in a Turkish company does not require a work permit. Working in the company does — including serving as a managing director of a limited company.
The criteria that apply are worth knowing before the structure is fixed:
- a workplace applying for a work permit is generally expected to employ at least five Turkish citizens for each foreign employee, with the requirement applied to a foreign shareholder-manager over the latter part of the first permit year rather than from the outset;
- a newly formed company is expected to have paid-in capital of at least TRY 100,000;
- for ongoing operations, alternative financial criteria apply — paid-in capital of TRY 500,000, net sales of TRY 8 million, or exports of USD 150,000;
- a foreign shareholder holding capital of USD 100,000 or more may fall outside the standard employment requirement.
These criteria are revised periodically and were most recently adjusted in 2026. Verify the current position before relying on any of them.
The obligations that follow
A Turkish company is an ongoing compliance obligation, and investors who expected a dormant vehicle are often unprepared:
- monthly withholding and VAT declarations;
- quarterly advance corporate tax returns;
- an annual corporate tax return;
- monthly social security declarations where there are employees;
- statutory books, maintained by a licensed accountant;
- annual general assembly and registry filings;
- independent audit where thresholds are exceeded.
A company that stops trading does not stop filing. Dormant companies accumulate penalties, and — in a limited company — those penalties can reach the shareholders personally. Where a business is being wound up, it should be liquidated properly rather than abandoned.
Frequently asked questions
Do I need a Turkish partner? No. One hundred per cent foreign ownership is permitted.
How long does formation take? Days, once documents are apostilled and translated. That preparation is the slow part.
Can I form the company without coming to Türkiye? Yes, under a properly drafted power of attorney.
Do I need a work permit to be a shareholder? No — only to work in the company, including as a managing director of a limited company.
Can my company buy property? Yes, subject to Article 36 of Law No. 2644 and the company's stated field of activity.
Can I transfer profits abroad? Yes, through banks, subject to tax and reporting.
Which type should I choose? Consider liability for public debts, plans for outside investment, and payroll. For most operating businesses, the joint stock company.
Getting the structure right first
Company formation in Türkiye is fast and inexpensive. Choosing the wrong structure, undercapitalising, or overlooking the work permit criteria is neither, because each is corrected by restructuring rather than by adjustment.
Dural Hukuk advises foreign investors on structure, forms companies under power of attorney for clients abroad, and handles work permit applications and ongoing corporate compliance. Call +90 535 260 74 54 or use the contact form on this site.
This article is general information on Turkish law as at August 2026 and is not legal or tax advice. Capital thresholds and work permit criteria change; verify the current position before proceeding.