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Contents
1.Advantages of Establishing a Foreign Company in Turkey
2.Company Establishment Process
3.Types of Foreign Companies in Turkey
4.Investment Incentives and Government Support
5.Free Zones and Their Advantages
6.Workforce and Employment in Turkey
7.Legal and Financial Consultancy for Foreign Companies
8.Conclusions and Recommendations

Turkey, with its strategic geographical location, growing economy, and young, dynamic population, has become an attractive destination for foreign investors. The country’s position serves as a bridge between Europe, Asia, and the Middle East. This article provides comprehensive information on the establishment of foreign companies in Turkey, government support, and incentives.

Advantages of Establishing a Foreign Company in Turkey

There are several advantages for foreign investors to establish a company in Turkey:

  • Strategic Location: Turkey is situated at a strategic point providing access to Europe, Asia, and the Middle East.
  • Young and Dynamic Workforce: Turkey’s young population offers a talented and dynamic workforce pool.
  • Wide Market Access: With a population exceeding 80 million and a customs union with the EU, Turkey offers access to a wide market.
  • Low Costs: Labor and operational costs in Turkey are lower compared to many developed countries.
  • Tax Advantages: Turkey offers various tax incentives and exemptions for foreign investors.

Company Establishment Process

The process of establishing a foreign company in Turkey involves the following steps:

  1. Determining the Type of Company: Choose from types such as limited, joint-stock, or branch.
  2. Preparing Necessary Documents: Prepare the company’s articles of association, founders’ identification documents, and other legal documents.
  3. Registering with the Trade Registry: Submit the documents to the trade registry.
  4. Obtaining a Tax Number and Permits: Register with the tax office and obtain the necessary permits.
  5. Opening a Bank Account: Open a bank account in the company’s name.

Types of Foreign Companies in Turkey

Foreign investors can choose from different types of companies in Turkey:

  • Limited Liability Company (Ltd. Şti.): The most common type, requiring minimum capital and at least one shareholder.
  • Joint-Stock Company (A.Ş.): Suitable for larger investments and offers the possibility of going public, requiring at least five founding shareholders.
  • Branch Office: An extension of an existing foreign company in Turkey, not an independent legal entity.
  • Liaison Office: Established for market research and liaison activities only, not allowed to engage in commercial activities.

Investment Incentives and Government Support

Turkey offers various incentives and support to attract foreign investors:

  • Tax Reductions and Exemptions: Benefits include corporate tax reductions, VAT exemptions, and income tax withholding incentives.
  • R&D Incentives: Tax deductions, insurance premium incentives, and grants for research and development activities.
  • Regional Incentives: Specific incentives for investments in different regions, varying based on the development level of the region.
  • Free Zone Incentives: Companies in free zones enjoy tax advantages, customs duty exemptions, and faster customs procedures.

Free Zones and Their Advantages

Foreign investors can benefit from several free zones in Turkey. Advantages include:

  • Tax Advantages: Companies operating in free zones can benefit from corporate tax and income tax exemptions.
  • Customs Duty Exemption: Goods entering free zones are exempt from customs duties.
  • Ease of Profit Transfer: Companies can freely transfer profits earned in free zones abroad.
  • Faster Customs Procedures: Transactions in free zones benefit from expedited customs procedures.

Workforce and Employment in Turkey

Turkey boasts a young and dynamic workforce, making it attractive for foreign investors:

  • Young Population: More than half of Turkey’s population is under the age of 30.
  • Qualified Workforce: Turkey has a highly skilled workforce in fields such as engineering, IT, and healthcare.
  • Labor Costs: Labor costs in Turkey are lower compared to many developed countries.
  • Employment Incentives: Various employment incentives are provided to employers in Turkey, helping to reduce labor costs.

Legal and Financial Consultancy for Foreign Companies

Utilizing legal and financial consultancy services is crucial when establishing a foreign company in Turkey. Local expertise can guide investors through the establishment process and beyond:

  • Legal Consultancy: Services include assistance with articles of incorporation, commercial law, labor law, and other legal matters.
  • Financial Consultancy: Expertise in tax regulations, financial reporting, auditing, and other financial matters.
  • Investment Consultancy: Guidance on investment strategies, benefiting from incentives, and local market analysis.

Conclusions and Recommendations

Establishing a foreign company in Turkey presents significant opportunities for investors. Turkey’s strategic location, broad market access, and investment incentives make it an appealing destination. However, it is crucial to comply with local regulations and take advantage of professional consultancy services.

Our consultancy firm offers comprehensive services to help foreign investors successfully establish and operate their companies in Turkey. We provide expert support on all legal, financial, and operational aspects of the establishment process and beyond. Contact us for more information and support.

 

CR Partners

CR Partners Law Firm has become one of the well-known law firms in Turkey with its steady development since the day it was founded. Today, it is organized into specialized departments according to their fields of work in order to provide legal services in a wide range and to reach solutions in the most efficient way.

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