🇹🇷Sole Proprietorship · Limited · Joint-Stock100% open to foreign capital
Setting Up a Company in Turkey — Choosing the Right Type Matters More Than Forming It
Forming a company in Turkey is technically a matter of a few days. The real decision is which type to start with: sole proprietorship, limited company, or joint-stock company. Choosing the wrong type means converting later costs both time and money. This page helps you choose the type first, then walks through the process.
Tell us who you are — the page adapts
Sole proprietorship, limited, or joint-stock — which one?
There are three options, and the difference between them isn't just tax: how far liability extends, whether you can bring in partners, and how difficult closing down is. The cards below compare all three on these dimensions.
Sole proprietorshipFastest to start
A business run under the individual's own name, with no separate legal personality. It's the fastest and cheapest option to set up.
✓Opens in 1–3 business days, no capital requirement
✓Closing down is also fast and low-cost
✕Liability extends to personal assets
✕Cannot take on partners, not suited to raising investment
Best for: For solo operators running low-risk, small-scale businesses.
Limited companyMost commonly chosen
A legal entity in which partners' liability is limited to the capital they contribute. The large majority of companies in Turkey take this form.
✓Liability is limited to the capital contributed
✓Can be formed with a single partner, and partners can be added
✓Preferred for corporate clients and tender processes
▪Filing and bookkeeping burden is heavier than a sole proprietorship
Best for: For businesses with partners, contracts, or growth plans.
Joint-stock companyInvestment and scale
A structure whose capital is divided into shares, designed for share transfers and investor entry. Its corporate obligations are heavier.
✓The most suitable structure for share transfers and investment rounds
✓Share option and equity plans can be set up
▪Board of directors and general assembly obligations
▪Formation and management costs are higher
Best for: For businesses planning to raise investment, have many partners, or operate at corporate scale.
Sole proprietorship, limited, joint-stock — side by side
The same three types in a single table, so you can see which one leads on which dimension.
Scroll the table sideways →
Sole proprietorship
Limited company
Joint-stock company
Legal personality
No
Yes
Yes
Liability
Extends to personal assets
Limited to capital
Limited to capital
Can partners be added
No
Yes
Yes, via shares
Formation time
1–3 business days
3–7 business days
5–10 business days
Taxation
Progressive income tax
Corporate tax + withholding on distribution
Corporate tax + withholding on distribution
Suited to raising investment
No
Partially
Yes
Corporate perception
Low
High
Highest
Closing down
Fast
Requires liquidation
Requires liquidation
Converting from sole proprietorship to limited company is possible but cumbersome
Contracts, bank accounts, e-invoice records, and customer relationships all have to be transferred. If growth is already planned, forming a limited company from the outset is more economical.
A joint-stock company isn't always more prestigious
If you aren't planning an investment round, the board of directors and general assembly obligations that come with a joint-stock company become an unrewarded burden.
Tax comparison depends on income level
At low earnings a sole proprietorship can come out ahead; as earnings rise, a corporate structure can take the lead. The decision is made on your own numbers, not on the tax rate alone.
Formation process
The standard flow for forming a limited company. For a sole proprietorship the steps are shorter: it's completed in 1–3 days with a tax office registration and ledger certification.
StageWhat happensDuration
Day 0Type and structure decisionThe choice between sole proprietorship, limited, or joint-stock is made; the trade name, line of business (NACE), and partnership structure are finalized.Same daySame day
Day 0–1Document preparationID, address information, and signature declarations are collected. For multi-partner structures, partner resolutions are prepared.1 day1 day
Day 1–2MERSİS applicationThe articles of association are prepared through MERSİS and an electronic formation application is created.1 day1 day
Day 2–5Trade Registry registrationRegistration is completed at the Trade Registry Directorate; the company registration number and certificate are issued.2–3 days2–3 days
Day 5–7Tax office and ledgersTax office registration is completed, ledgers are certified, and e-invoice and e-ledger obligations are set up.1–2 days1–2 days
AfterBank, SGK, and accountingA corporate bank account is opened, and if staff will be employed, an SGK workplace file is opened; the accounting calendar is set up.1–2 weeks1–2 weeks
Documents needed
ID and signature declaration
A copy of ID and a signature declaration for all partners and the manager.
Address information
The company's registered address; a lease agreement or title deed information is required.
Trade name and NACE code
2–3 alternative trade names together with the NACE code describing the line of business.
Partnership structure
Number of partners, share ratios, capital amount, and signing authority.
The strongest reason to stay in Turkey
If you develop software or R&D, be sure to consider the Technopark
The real point where Turkey competes with other countries isn't the general tax rate — it's the technology development zones. Under Law No. 4691, income earned from software, design, and R&D activity carried out within a zone is exempt from income and corporate tax until 31 December 2028. A withholding tax exemption on staff salaries and support for the employer's share of social security premiums are added on top of that. Most software teams that consider setting up a company abroad choose to stay in Turkey once they run the numbers.
Income
Income and corporate tax exemption
Income earned from software, design, and R&D activity within the zone is exempt until 31 December 2028.
Payroll
Withholding tax exemption
An income tax withholding exemption applies to the salaries of R&D, design, and support staff.
SGK
Employer's share support
Half of the employer's share of social security premiums for staff within the exemption is covered by the Treasury.
VAT
Exemption on software delivery
The delivery and services of certain software produced within the zone are exempt from VAT.
What to know before forming a company
✓You can apply before forming a company; after acceptance, the company is formed with the zone as its address.
✓Formation and the Technopark application are planned in parallel; once acceptance arrives, the paperwork is ready and waiting.
!The exemption applies to activity within the zone; income from outside the zone must be separated out in the accounts.
!Acceptance comes from the project passing the innovation assessment, not from forming a company.
Technopark acceptance doesn't come from forming a company — it comes from your project passing the innovation assessment. The eligibility check is free and takes 60 seconds.Go to the Technopark page →
The Technopark isn't Turkey's only incentive. See the next section for the Investment Incentive Certificate, HIT-30, and the qualified service center deduction.
2025–2026 regulatory changes
Incentives specific to foreign investors and new regulations
Incentive programs aren't open only to foreign investors — Turkish-capital companies apply to the same programs. 2025 and 2026 brought two consecutive, sweeping changes: the investment incentive system was completely overhauled by Presidential Decree No. 9903, and a new earnings deduction under the heading of "qualified service center" was added to the Foreign Direct Investment Law.
NewForeign Direct Investment Law
Qualified service center earnings deduction
Under a new provision added to the Foreign Direct Investment Law, a corporate tax deduction applies to the earnings that entities holding qualified service center status derive from services they provide abroad.
✓Applies for 20 accounting periods starting from the period operations begin
✓The earnings must be transferred to Turkey by the annual tax return deadline
✓Applies to earnings of tax periods starting on or after 1 January 2026
New systemPresidential Decree No. 9903
The renewed investment incentive system
Under Decree No. 9903, the investment incentive system was built on two pillars: the Turkey Century Development Drive and the Sectoral and Regional Incentive System. The program covers applications made through 31 December 2030.
✓New investment subjects are set for each province, and a new application period is open
✓Monetary thresholds are updated every year by the revaluation rate
✓A machinery grant support not present under the old system was introduced by this decree
ProgramMinistry of Industry and Technology
HIT-30 High Technology Investment Program
Described by the Ministry as the country's largest-scale incentive program, HIT-30 aims to make Turkey a hub for high-technology investment.
✓Focused on high-technology production and advanced manufacturing investments
✓Foreign-capital companies may also apply under the program
✓The technology level and scale of the investment are decisive in the application
CertificateVia E-TUYS
Investment Incentive Certificate
An official certificate issued for investments focused on production, employment, and technology. The certificate holder benefits from a range of tax advantages on covered machinery and equipment purchases.
✓VAT exemption on machinery and equipment purchases
✓Customs duty exemption on imported machinery
✓Tax reduction, social security premium support, interest support, and allocation of investment sites
SystemMinistry of Industry and Technology
E-TUYS: the foreign capital notification system
The Electronic Incentive Application and Foreign Capital Information System; incentive certificate applications and notifications relating to companies and branches that foreign investors set up in Turkey are handled through this platform.
✓Incentive applications, machinery purchase records, and completion approval are handled here
✓Periodic notifications for foreign-capital companies are also filed in this system
✓Access requires an electronic signature and user authorization
Strongest incentiveLaw No. 4691
Technopark exemptions
Turkey's strongest incentive for companies producing software, design, and R&D. It combines an earnings exemption, a staff withholding tax exemption, and SGK employer's-share support.
✓Earnings within the zone are exempt from income and corporate tax until 31 December 2028
✓Foreign-capital companies may also apply to the Technopark
✓Acceptance comes from the project passing the assessment, not from forming a company
Follow the right order to benefit from the incentive
In most incentive programs, the application must be completed before any investment expenditure. Buying the machinery first and requesting the certificate afterward forfeits most of the support.
Eligibility check — which program your activity, investment amount, and province fall under is established first.
Apply before spending — the incentive certificate must be obtained before any expenditure; applying afterward forfeits most of the support.
E-TUYS authorization — the electronic signature and user authorization are completed, and the application is entered into the system.
Monitoring and completion — machinery purchase records are processed, and extensions and completion approval are tracked.
Incentive amounts, rates, and monetary thresholds are updated every year by the revaluation rate; we confirm the current figures against the latest communiqué before you apply.Which incentive do I qualify for?
What do you need to do after formation?
In Turkey, a company's real workload isn't in forming it — it's in running it. The items below recur every month or every period; your accounting setup needs to be built around this from the start.
WhenObligation
Every monthVAT and withholding tax returnsVAT and withholding tax returns are filed electronically; the payment calendar follows from these.
Every monthSGK notificationsIf there is staff, a monthly premium and service declaration is filed; entry and exit notifications are made within the deadline.
Every three monthsProvisional tax returnProvisional tax is calculated and declared on the period's earnings; it is offset at year-end.
Year-endAnnual return and financial statementsThe income or corporate tax return is submitted along with the balance sheet and income statement.
OngoingE-invoice and e-ledgerIf you're within scope, invoices are issued electronically, ledgers are kept electronically, and certified periodically.
Upon changeRegistry and ministry notificationsChanges in address, partners, capital, and signing authority are reported to the Trade Registry, and for foreign-capital companies, to the relevant ministry.
Fixed expense items
Accounting fee — the company's most predictable fixed expense, varying by type and transaction volume. · Rent or virtual office fee; a registered address notification is mandatory. · Stamp duty, fees, and notary costs (for formation and amendment transactions). · E-invoice and e-ledger integrator subscription (if within scope). · If there is staff, SGK employer's-share and payroll costs.
If you export
For companies selling services and software abroad, the export-of-services VAT exemption and earnings deduction come into play. These advantages can be substantial enough to make forming a company abroad unnecessary; they should be calculated before making the decision.
Service export guide →Who is forming a company in Turkey right for?
A summary of what we cover in the first half hour of a consultation.
The right fit
✓Businesses whose customers are in Turkey and that will set up domestic sales and invoicing.
✓Teams producing software, design, or R&D — Technopark exemptions outperform most alternatives abroad.
✓Companies selling services abroad that already get sufficient advantage from the export-of-services exemption.
✓Businesses of any size whose team, suppliers, and operations are actually located in Turkey.
Consider going abroad instead
✕Companies selling to EU corporate clients that need an EU VAT number and reverse-charge setup.
✕SaaS and digital product teams that need to collect payments in dollars through Stripe or similar providers.
✕Startups raising investment from foreign investors that need a structure the investor is familiar with.
✕Businesses whose customers are entirely abroad and where local perception directly affects sales.
Our clients who set up companies in Turkey
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Frequently asked questions about setting up a company in Turkey
Organized into six topics: company type, the formation process, foreign investors, incentives, obligations, and the trademark side. Pick a topic or search directly.
37 questions
The decision looks at three things: risk, partners, and scale. In a sole proprietorship, liability extends to your personal assets; in a limited company, partners' liability is limited to the capital they contribute. If you're operating solo, at low risk and small scale, a sole proprietorship is a fast, cheap way to start. If you'll take on partners, work under contracts, or have a growth plan, a limited company is the right choice from the outset.
A limited company is the standard structure, with flexible management and a light formation burden. A joint-stock company, by contrast, is well suited to share transfers via stock certificates, investor entry, and share-option planning; in return it brings additional obligations such as a board of directors, general assembly, and independent audit. If you're not planning an investment round, a limited company is sufficient in most cases.
Yes, this is possible either by converting the type or by forming a new company and transferring the business over. However, the process is more involved than a fresh formation: contracts, bank accounts, e-invoice records, and customer relationships all have to be moved over. That's why, if growth is already planned, forming a limited company from the outset is more economical.
A joint-stock company can be formed with a single shareholder; there's no requirement for more than one partner. Likewise, a limited company can also be formed with a single partner. What matters isn't the number of partners, but how the share structure is designed and how share transfers are planned.
This question isn't as simple as it looks. In a sole proprietorship, earnings are subject to progressive income tax; in a limited or joint-stock company, corporate tax applies first, and withholding tax kicks in on profit distribution as well. At low earnings a sole proprietorship can come out ahead; as earnings rise, a corporate structure can take the lead. The decision depends not on the rates alone but on your income level and what you plan to do with the profit — we work this out together.
Opening a sole proprietorship is usually completed in 1–3 business days. For limited and joint-stock companies, the process — including the MERSİS application, Trade Registry registration, and tax office registration — takes 3–7 business days. For companies with foreign partners, once the apostille, translation, and potential tax ID number steps are added, the timeline extends to 7–15 business days.
MERSİS is the Central Registration System. Company formation applications, the preparation of the articles of association, and registry transactions are all carried out electronically through this system. At formation, the articles of association are drawn up in MERSİS, and registration is then completed at the Trade Registry Directorate.
The company must declare a registered address, and this address is used for official notifications. A home address, a co-working space, or a virtual office can be used; which one is suitable depends on the line of business and the practice of the tax office you're registered with. For warehousing, manufacturing, or retail activities, physical premises are additionally required.
The Turkish Commercial Code sets minimum capital amounts for limited and joint-stock companies, and these amounts are updated periodically. We confirm the current amount before formation. Part of the capital can be paid at formation, with the remainder paid within the period set out in the law.
For foreign partners, most of the formation process can be handled remotely with a notarized, apostilled power of attorney. However, when it comes to opening a bank account, most banks require the authorized signatory to be present at the branch. So it's realistic to plan on coming to Turkey at least once.
Yes. Under the Foreign Direct Investment Law, foreign investors are treated on an equal footing with Turkish investors; a company can be formed with 100% foreign capital, and there is no requirement to have a Turkish partner. In certain regulated sectors, additional permits or licenses may be required.
It's a number issued to foreign individuals and entities that don't have a tax registration in Turkey, and it's needed for company formation and banking transactions. It's obtained by applying to the tax office with a passport and address information; for company formations with foreign partners, this is usually the first step. This application can also be made on your behalf via a power of attorney.
For documents issued abroad to be valid in Turkey, they need an apostille and a sworn translation. This typically covers the power of attorney, the foreign corporate partner's certificate of registration, the resolution of the authorized body, and the signature circular. For individual partners, a notarized translation of the passport may be sufficient.
Owning a company doesn't automatically grant a residence permit. Foreign investors who want to live in Turkey need to separately apply under the appropriate residence permit category; the application evaluates criteria such as the company's actual activity, number of employees, and investment amount. If you'll work as a manager in the company, a work permit also comes into play.
Foreign-capital companies are required to make periodic notifications to the relevant ministry regarding changes in capital and partnership structure, as well as activity information. Neglecting these notifications results in administrative penalties; we build them into the calendar when setting up your accounting.
A branch is an extension of the parent company abroad and carries the parent company's liability; a liaison office, on the other hand, cannot conduct commercial activity and only handles representation and market research. If you'll be conducting commercial activity and want to limit liability, forming a new limited or joint-stock company in Turkey is in most cases the better choice.
Turkey's strength isn't the general tax rate — it's the size of the domestic market, the qualified workforce, logistical proximity to Europe and the Middle East, and targeted incentive programs. Especially for companies producing software and R&D, Technopark exemptions can create a more favorable picture than most alternatives abroad.
Entry to a Technopark doesn't come from forming a company — it comes from submitting an innovative R&D, software, or design project to the Technopark's management company and passing the evaluation committee. After acceptance, the company either moves into the zone or a new company is formed directly with the zone as its address. See our Technopark page for details.
Under Law No. 4691, earnings from software, design, and R&D activity within the zone are exempt from income and corporate tax until 31 December 2028. In addition, there's an income tax withholding exemption on the salaries of R&D, design, and support staff, a VAT exemption on the delivery of certain software produced within the zone, and Treasury coverage of half of the employer's share of social security premiums.
Yes. Services provided abroad and benefited from abroad qualify for a VAT exemption, and under certain conditions, an earnings deduction as well. For some teams these advantages are substantial enough to make forming a company abroad unnecessary; it's worth calculating both scenarios side by side before deciding.
Yes. Under the Foreign Direct Investment Law, foreign investors are treated on an equal footing with Turkish investors; foreign-capital companies can apply to all of the programs, including the Investment Incentive Certificate, HIT-30, and the Technopark. There's no separate incentive list closed to foreigners; the requirement is that the investment be made in Turkey and meet the program criteria.
The investment incentive system was completely overhauled and built on two pillars: the Turkey Century Development Drive and the Sectoral and Regional Incentive System. The program covers applications made through 31 December 2030, new investment subjects are set for each province, and a machinery grant support not present under the old system was introduced. Monetary thresholds are updated every year by the revaluation rate.
It's a new provision added to the Foreign Direct Investment Law. A corporate tax deduction applies to the earnings that entities holding qualified service center status derive from services they provide abroad. The deduction applies for 20 accounting periods starting from the period the center becomes operational, and the earnings must be transferred to Turkey by the annual tax return deadline. The provision applies to earnings of tax periods starting on or after 1 January 2026.
The HIT-30 High Technology Investment Program is described by the Ministry of Industry and Technology as the country's largest-scale incentive program, and it aims to make Turkey a hub for high-technology investment. Companies planning to invest in high-technology production and advanced manufacturing can apply; no distinction is made between domestic and foreign capital. The technology level and scale of the investment are decisive in the application.
The certificate holder doesn't pay VAT on covered machinery and equipment purchases and is exempt from customs duty on imported machinery. In addition, once the investment is complete, elements such as a corporate or income tax reduction, social security premium support, interest support, and allocation of an investment site can come into play. Which elements apply depends on the subject, amount, and province of the investment.
E-TUYS is the Electronic Incentive Application and Foreign Capital Information System. It has two functions: investment incentive certificate application, monitoring, and reporting transactions, and notifications relating to companies and branches that foreign investors set up in Turkey are both handled through this system. The periodic notification obligation for foreign-capital companies is tracked here; access requires an electronic signature and user authorization.
No, this is one of the most costly mistakes. In most incentive programs, the certificate must be obtained before any investment expenditure is made. Buying the machinery first and then requesting the certificate means losing elements such as the VAT exemption and customs exemption. As soon as the investment plan is clear, the application process should be started.
There are various programs such as KOSGEB entrepreneurship support, TÜBİTAK R&D programs, export support, and regional investment incentives. Eligibility depends on the line of business, company type, formation date, and province. Setting up the company structure with these programs in mind from the start makes applying later easier.
Monthly, VAT and withholding tax returns are filed, along with SGK notifications if there's staff. Every three months, a provisional tax return is filed, and at year-end, the income or corporate tax return and financial statements are submitted. If you're within the scope of e-invoice and e-ledger obligations, these also need to be issued electronically.
For limited and joint-stock companies, working with a certified public accountant is effectively mandatory because of bookkeeping and filing obligations. Sole proprietorships also need a filing arrangement, so the same need arises in practice. The accounting fee is one of the company's most predictable fixed expenses.
Yes. Even without activity, a blank return still needs to be filed as long as the tax registration remains active. Failing to file automatically results in a penalty. If you won't be using the company for a while, it's better to discuss suspending activity or closing down instead.
Closing a sole proprietorship is relatively fast. For limited and joint-stock companies, the liquidation process can take months, as it includes public announcement, creditor protection, and a tax office audit. That's why we factor the exit scenario into the choice of company type as well.
E-invoice, e-archive, and e-ledger are mandatory for taxpayers exceeding certain revenue thresholds or operating in certain sectors; the scope expands every year. Companies below the threshold can also switch voluntarily. Setting up the accounting infrastructure to be compatible with these systems from the start eliminates the cost of switching later.
No. The trade name is registered with the Trade Registry, but this doesn't provide trademark protection. To protect your brand for the products and services it covers, you need a separate trademark registration with TÜRKPATENT (the Turkish Patent and Trademark Office). The trade name and the brand can also be different from each other.
Yes. A trademark application can be filed in an individual's own name and transferred to the company later. But if you're already planning to set up a company, filing the application directly in the company's name avoids the transfer cost and any confusion that might arise later.
In most cases, yes. Services and software can be exported from Turkey abroad, foreign currency collection is possible, and export-of-services exemptions can apply. The need for a company abroad usually arises when customer perception, local payment infrastructure, or an intra-EU VAT setup is required; without those three reasons, continuing with the Turkish company is more economical.
Yes, and this is a common setup for growing teams: production and employment in Turkey, sales and collections in the company abroad. However, this structure needs to be set up carefully with regard to transfer pricing, profit distribution, and controlled foreign corporation rules; getting it wrong can cause problems in both countries at once.
Turkey or abroad — let's decide together
Tell us about your business, where your customers are, and your growth plans; we'll tell you for free whether staying in Turkey or an offshore structure is the right call. It's a screening conversation, not a sales pitch.
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