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Turkey’s movement toward membership in the EU is creating momentum for adopting European business regulations and standards, thereby making it easier to run businesses in the country.

The FDI law sets the legal framework for a liberal investment environment in Turkey. This law entitles foreign companies to the same rights and responsibilities as Turkish companies.

According to the law, all companies that are established with foreign capital contribution and set up in line with the regulations of the Turkish Commercial Code will receive equal treatment with Turkish companies both in terms of rights and responsibilities.

The new FDI law also states that there is no obligation requiring Turkish participation in the management of such a company.

A company may be established with 100 percent foreign capital.

The formation of a company by a foreign investor no longer requires permission from the Treasury’s Foreign Investment General Directorate.

Applications for the establishment of a company must be filed with the Ministry of Industry and Trade or with a provincial trade registration office.

Articles of incorporation -- detailing the company’s structure and management -- are required and should be notarised. However, an average of one week should be expected. An application is then submitted to the Ministry of Industry and Trade.

What kind of companies can foreigners establish?

The law does not impose any restrictions on foreign capital and enables foreign investors to invest in Turkey by either establishing a new company or branch or by acquiring the shares of an already operating Turkish company without being subject to any kind of pre-authorization generally required for foreign investment.

Applications made by foreign companies to establish liaison offices to operate in certain sectors, such as insurance, are subject to special legislation. The cost of establishing such companies varies depending on the capital involved and the number of shareholders.

All business enterprises must have an accounting system adapted to the needs of the business in accordance with Turkish accounting standards. Any entity or individual can obtain a simple import or export license for any product that is not prohibited by law. Imports from other countries are subject to customs duty at various rates. You should note that all company employees -- including the general manager or managers -- who are not Turkish citizens should obtain both residence and work permits.

Documents for setting up a business

• Application form
• Notarised articles of incorporation
• Notarised copies of board resolution identifying company's founding partners
• Notarised copies of passports of founding partners
• Photos of founding members
• Leasing contract
• Tax numbers of founding members

What must a foreigner do during the establishment process?

After the drafting and notarisation of the articles of incorporation one may notify the relevant authorities and apply to the respective chamber of commerce or industry for the company's registration with a trade registry.