Establishing a limited liability company in Turkey is a wise decision for foreigners interested in investing in an ideal environment. Here are the steps to establish an LLC, what follows its establishment, and other details.

Establishing a Limited Liability Company

Establishing a limited liability company in Turkey presents an excellent option for foreign investors seeking a dynamic and supportive business environment. Turkey is renowned not only for its rich history, culture, and captivating natural beauty but also as a highly favorable hub for business. With flexible investment laws, robust economic growth, and governmental backing, Turkey offers a conducive setting for entrepreneurial ventures.

Forming an LLC in Turkey unlocks diverse opportunities, catering to projects of varying scales—from small enterprises to larger ventures. LLCs benefit from advantageous features like affordable registration fees and straightforward procedures for transferring ownership between stakeholders.

Explore detailed insights on establishing a limited liability company in Turkey, navigating post-establishment requirements, and other pertinent details in this article from Trustus Consultancy.

5 steps outlining how to establish a limited liability company (LLC) in Turkey

1.  Choose a Company Name

The name of your company serves as its identity and is the first step in establishing your own business.

2.  Select a Company Location

Decide on the headquarters where your company will operate, whether it's a rented office or a registered virtual office.

3.  Prepare Required Documents for LLC Formation (Ltd.)

This includes:

• Obtaining a personal tax number for each partner.
• National identity card and valid passport for identity verification.
• Passport-sized photo for each partner in the LLC.

4.   Choose Business Activities from Approved Regulations by the Chamber of Commerce

Select the business field of your company from the regulations to proceed with establishing your business.

5.  Determine the Company's Capital

The minimum capital required for LLCs is 10,000 Turkish Lira.

This step sets the financial foundation for your company.

Afterward, seek out a trusted legal accountant to guide you through the agreement and initiate the establishment procedures.

What papers does the company owner obtain after establishing the limited company?

After establishing a limited liability company (LLC) in Turkey, the owner receives several documents, including:

1.  Tax Plate (Vergi Plakası)

This document shows the taxpayer's income and the types of taxes imposed on them.

2.  Commercial Registry (Ticari Kayıt)

Issued by the Chamber of Commerce, this document includes the names of traders and all details related to their company and trade activities, whether they are entities or individuals.

3.  Activity Page (Etkinlik Sayfası)

This page lists the company's activities, owner's details, company capital, as well as tax plate and company tax number.

4.  Signature Approval (İmza Onayı)

This statement confirms the signature of the company manager, recognized throughout Turkey, enabling them to conduct all governmental procedures on behalf of the company.

5.  Company Seal (Şirket Kaşesi)

The company seal affirms the credibility of your company to government entities and validates the company's rights in all documents bearing its seal.

6.  Chamber of Commerce Membership Card (Ticaret Odası Kimlik Kartı)

An identification card for the company owner containing comprehensive company information, including its name, address, principal activity, trade registry number, as well as personal details of the owner such as full name, nationality, residence permit number, or personal tax number.

7.  Power of Attorney for Certified Public Accountant (Yeminli Mali Müşavirlik)

This formal procedure, issued by a notary public in Turkey, assigns legal management of the company's accounts to the certified public accountant.

8.  Commercial Registry Gazette (Ticaret Sicil Gazetesi)

This gazette contains comprehensive details of the company such as its headquarters, information about directors and employees, establishment date, and founding resolution.

These documents are essential for the legal establishment and operation of an LLC in Turkey, ensuring compliance with regulatory requirements and facilitating business transactions.

 

Who is the certified accountant, and what are his responsibilities?

The certified accountant acts as the company's representative before the Turkish tax authority, requiring careful selection.

Following the company's establishment, his duties include registering it with the tax authority, preparing necessary applications for the company's disclosures, and filing the tax return for the month of its establishment, even if this occurs on the last day of the month. It's important to note that each company is linked to just one certified accountant.

The main role of the certified accountant is to submit the company's tax-related data (such as sales and purchases) for verification and integration into the tax system. Additionally, he is responsible for preparing the official budget based on the company's approved banking accounts.

What follows establishing a limited liability company?

The significance of selecting a certified accountant carefully becomes apparent due to the multitude of documents and procedures that must be timely submitted to avoid penalties and infractions. Their responsibility lies in preparing and delivering these documents promptly during the establishment phase.

After establishing the company, it entails the following:

1.  Uploading sales and purchase invoices to the tax department system

After establishing a company with tax liability in Turkey, it's essential to officially register invoices for purchases and sales in the company's record within the Turkish tax system every month.

This process involves submitting these invoices to the certified accountant, who then files them with the Turkish tax authorities to ensure accurate tax assessment across all types. Failure to register high-value invoices can lead to penalties and is considered a form of tax evasion.

Some companies only issue sales invoices without corresponding purchase invoices, resulting in their products not being accounted for in the tax system due to the omission of purchase invoices at the time of acquisition.

To legally sell products under the company's name, all transactions must be properly recorded by a certified accountant.

2.  Periodic Tax Reporting

There are four primary tax reports:

• Monthly KDV declaration.
• Quarterly profit and loss tax statement issued in January, May, August, and December.
• Short-form tax declaration (Stopaj).
• Annual profit statement, payable annually in April.

3.  Tax Payments

Companies in Turkey are subject to fixed taxes regardless of profitability:

• Annual profit tax at a rate of 25% for limited and joint-stock companies.
• KDV tax at a rate of 20%.
• Stopaj tax at an approximate rate of 20%.
  

If you are seeking an investment opportunity in Turkey and aiming to benefit from its economic growth and flexible regulations, establishing a limited liability company in Turkey is a prudent decision.

Trustus Consultancy is pleased to assist you in establishing your own limited liability company in compliance with Turkish commercial law and completing all necessary procedures for company formation in Turkey. Feel free to reach out for our services and contact us now.

Source: Turkish Ministry of Trade