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ESTABLISHING A COMPANY WITH FOREIGN CAPITAL

Turkey has a non-discrimination and equal treatment. Foreign investors have the same status with a local company. There are no rules requiring a Turkish participation in the capital or management of a company with foreign capital; a company may be established with 100% foreign capital. Almost all sectors are open to foreign capital.

The company establishment procedures have been simplified to a great extent through shifting from screening system to monitoring system for foreign investments and through eliminating the unnecessary procedures to set up a business for both the local and foreign investors.

Limited Companies

Limited liability companies may be formed of real persons or legal entities and consist of minimum of two, maximum of 50 shareholders. The minimum capital must be TRY 5.000 (USD 3,704).

Registration of a Company

Registration to the Trade Registry  

Following documents are required to be submitted to the Trade Registry Office.

• Articles of Association certified by a Public Notary

• A receipt issued by the bank verifying the payment of capital contribution if the capital is contributed by the shareholders at establishment

• A bank receipt verifying the payment of Fund for Protection of Competition 4% in the 10.000 of the capital commitment

• Signature declarations and passport copies of the persons authorised to represent and bind the company (copies of the identity and residence certificates for Turkish citizens)

• Photos and passport copies of the real person shareholders

Registration to Tax Office

An application to the tax office is required wherein the company headquarters is located, on the same day or the day before the registration date. A tax registration number is received and legal books are certified by a Public Notary.

The rent contract certified by the Notary Public as well as the notarised Circular of Signatory should be submitted to the related Tax Office.

Following these registrations, the establishment procedures are completed and the company may start to operate. Expected period for finalizing the above registrations is 2-3 days.

A minimum capital of YTL 5000 (approximately £2000) is required. This is the total amount of capital, not the capital per person.

Unlike joint-stock companies, no stock certificate is issued.

A company can be established in a day provided that all the required documents are ready to be submitted to the Trade Registry.

It is obligatory that the articles of association of the company should contain the subjects stipulated in Articles 506 and 511 of the TCC, it should be put down in written form and the signatures of all founders should be notarised:

-Names Surnames

-Addresses and -Citizenship (only for non-Turkish citizenship)

of the founders have to be listed.

The trade name of the company has to be determined in accordance with Article 45 of TCC so as to indicate the business activity of the company.

It is obligatory that the trade name has to incorporate the phrasing; “Limited.”

In case it contains the name and surname of the real person, the phrasing that indicates the company type cannot be abbreviated or displayed in symbols.

The presence of foreign words in the trade name of a company may be permitted in cases, where these words do not contradict the law, the national, cultural and historical benefits; where the name or brand promoting the goods or services constituting the business activity of the company is in a foreign language or there is/are foreign shareholder/s in the company.

The name of the province and district of the province at which the headquarter of the company is located, has to be specified in the articles of association.

Furthermore, the open address of the company has to be written in the articles of association.

Thus, the article denoting the headquarter of the company should read as;

“The headquarter of the company is located in ………. . It’s address is; ……………. . In case of a change of address, the new address has to be registered at the Commercial Registry and announced in the Commercial Registry Gazette. Any notice served the registered and announced address is deemed to have been served to the company. In case the company leaves its registered and announced address and does not register its new address within the stipulated period, the case is considered as the cause for termination.”

A specific field of activity in which the company will actually be operating should be written in the articles of association. The articles of association should not be written so as to cover all kinds of field of activity. Objectives and subjects of activity that can be written in the articles of association are limited with the subject specifed in the company title.

The capital of the company should be minimum YTL 5000. Capital amounts to be put in by shareholders can be of diverse amounts. Yet, the capital to be provided by shareholders should be at least YTL 25 or multiples of this amount.

In accordance with Articles 506 and 510 of TCC, it is obligatory that

• Principal capital of the company,
• Capital amounts subscribed by each shareholder and
• Method and terms of how this capital shall be paid

have to be specified in the articles of association.

Accordingly, notwithstanding the provisions of special laws, it must be written in the capital clause of the articles of association of the company that

• the capital has been fully subscribed – and
• 1/4 of the cash capital has been fully paid up or
• It will be paid up latest within three months following the establishment of the company and the remaining portion will be paid up latest within three years.

The articles of association are first Notarised and then registered at the Trade Registry Office where the company headquarter is located in or where the location of headquarter is associated with, within 15 days after notarization.