The limited company is the most common corporate form in Türkiye and the default choice for most foreign investors starting small. It is inexpensive to establish, simple to run, and carries one feature that investors are rarely told about until it matters: shareholders are personally liable for the company's unpaid public debts. This article sets out what a limited company costs, how the capital rules work, and where that liability bites.
The basics
A limited company (limited şirket) is a capital company under the Turkish Commercial Code No. 6102, formed by between one and fifty shareholders. Since 1 January 2024 the minimum capital is TRY 50,000, up from TRY 10,000.
It is managed by one or more managers (müdür), at least one of whom must be a shareholder. Foreign nationals may hold all the shares and may act as managers, subject to the work permit position below.
Companies formed before 2024 with capital below the current minimum must increase it by 31 December 2026 or be deemed dissolved — a point worth checking before acquiring an existing company.
The capital rules
Two features distinguish the limited company from the joint stock company on capital.
No advance blocking. The requirement to deposit and block a quarter of cash capital before registration was abolished for limited companies in 2018. Capital is committed in the articles of association and paid within twenty-four months of registration.
Twenty-four months to pay. The commitment is real: it is a debt owed to the company, enforceable by the company and by its creditors, and it does not lapse if the business is unsuccessful.
This flexibility helps a founder with limited immediate cash. It is not free money, and articles of association that commit a shareholder to capital they cannot pay create a liability rather than an option.
What formation costs
Beyond the capital itself, the components are:
- notary fees for signature declarations and, where applicable, document certification;
- trade registry registration fees and the Trade Registry Gazette announcement;
- chamber of commerce registration;
- a contribution payable to the Competition Authority calculated on capital;
- the cost of a company address, whether leased premises or a permitted virtual office arrangement;
- accountant's engagement, usually on a monthly retainer from formation;
- sworn translation and apostille where shareholders or documents are foreign;
- legal fees.
Formation itself is inexpensive relative to almost any other jurisdiction. The recurring costs — accountancy, address, filings — are the ones that matter over time and are frequently omitted from an investor's initial budget.
The liability point
This is the part of the article to read twice.
In a limited company, shareholders are liable for the company's unpaid public debts — principally taxes and social security contributions — in proportion to their shareholding, personally, where those debts cannot be collected from the company. This liability arises under public collection legislation rather than under the Commercial Code, and it is not displaced by the general principle of limited liability.
A shareholder holding forty per cent of a company that fails owing TRY 1,000,000 in taxes and contributions faces personal exposure of TRY 400,000. That exposure follows them, and it can be enforced against personal assets.
Commercial debts are different: for those, the company alone is liable, and the shareholder's exposure is limited to their capital commitment.
Managers carry a further and separate liability for public debts arising during their management, and a foreign shareholder who serves as manager therefore carries both exposures.
In a joint stock company, by contrast, a shareholder who is not on the board does not carry the public debt liability. That single difference is the reason many advisers recommend the joint stock company for any business that will carry meaningful payroll or tax exposure, notwithstanding its higher minimum capital.
Share transfers are heavier than expected
Transferring a share in a limited company requires a written agreement in notarial form, approval of the general assembly unless the articles provide otherwise, and registration in the trade registry and the share ledger.
The tax position is also less favourable. Gains on the sale of limited company shares are taxable, whereas gains on the sale of joint stock company shares represented by share certificates may be exempt after two years.
Investors who anticipate bringing in partners, selling a stake, or exiting should weigh this at formation. Converting a limited company into a joint stock company later is possible but is a procedure with its own cost and timetable.
Work permits for foreign shareholders
Holding shares does not require a work permit. Acting as manager does.
The criteria that apply to the company's application:
- generally at least five Turkish citizens employed per foreign employee, applied to a shareholder-manager over the latter part of the first permit year rather than from day one;
- paid-in capital of at least TRY 100,000 for a newly formed company;
- for ongoing operations, alternative criteria — TRY 500,000 paid-in capital, TRY 8 million net sales, or USD 150,000 exports;
- a foreign shareholder with capital of USD 100,000 or more may fall outside the standard employment requirement.
The practical implication is that a company formed at the TRY 50,000 statutory minimum will not support a work permit for its foreign manager. Capitalise for the permit, not for the minimum — the difference is small, and increasing capital later is a general assembly procedure with cost and delay.
Running the company
- Monthly withholding and VAT declarations.
- Quarterly advance corporate tax; annual corporate tax return.
- Monthly social security declarations once there are employees.
- Statutory books maintained by a licensed accountant.
- Annual ordinary general assembly and registry filings.
- Independent audit where thresholds are exceeded.
A dormant company still files. Abandoning a company that has ceased trading is the most expensive way to close one, because penalties accumulate and, in a limited company, reach the shareholders. Liquidate properly.
When the limited company is the right choice
Suitable for: a small consultancy or service business; a single founder; a company with modest payroll and tax exposure; a vehicle where simplicity matters more than structure.
Consider a joint stock company instead where: the business will carry significant payroll or tax liabilities; outside investors are anticipated; shares may be sold; the shareholders want distance from public debt liability; or share transfer flexibility matters.
The gap in minimum capital — TRY 200,000 — is small against the liability difference for any business of real size.
Frequently asked questions
Can one person form a limited company? Yes, a single shareholder is permitted.
Must a manager be a shareholder? At least one manager must be a shareholder.
Can all shareholders be foreign? Yes, one hundred per cent foreign ownership is permitted.
Do I have to pay the capital immediately? No advance blocking; payment within twenty-four months, and the commitment is enforceable.
Am I liable for company debts? For commercial debts, no, beyond your capital commitment. For unpaid public debts, yes, pro rata and personally.
Can I convert to a joint stock company later? Yes, by a procedure with its own cost and timetable.
What if the company stops trading? Liquidate it. Dormant companies accumulate penalties that reach shareholders.
Choosing deliberately
The limited company is the right vehicle for a great many foreign investors and the wrong one for a business that will carry real tax and payroll exposure. That choice is made once, cheaply, at formation — and unmade later, expensively.
Dural Hukuk advises on company type and capitalisation before formation, forms companies under power of attorney for clients abroad, and handles work permit applications and 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. Thresholds and criteria change; verify the current position before proceeding.