Company establishment system has been changed in recent years and set the procedures length and expenses at a very reasonable level. The former system required a lot of documentation and steps to follow that were causing many obstacles for the foreign investors. The new Foreign Direct Investment Legislation was issued on the day of 5.6.2003 to reduce the problems that foreign investors facing with in
With the new legislation, the pre establishment permits to be taken from The Undersecretariat of Treasury and Ministry of Industry and Trade, required by the previous legislation has been abolished. Another facility occurred in the establishment period. It is now possible to establish a company just in one day when applied to the related Trade Registry Office with the required documents. The company gets its “legal entity” upon establishment.
Types of the Companies were determined in Turkish Commercial Code. The types of the companies shall be defined in two categories which are incorporated companies such as Joint Stock Companies, Limited Companies, Commandite Companies and Collective Companies and unincorporated companies such as Joint-Venture, Business Association and Consortium.
It should be noted that, some types of companies are subject to the special acts in
Characteristics of the companies shall be defined here after:
- Joint Stock Company: The company’s stock capital is divided into shares and the liability of the shareholders is restricted with the capital subscribed and paid by the shareholder. At least 1 shareholders (real person or legal entity) and minimum capital of 50,000.00 TL is mandatory. The mandatory company organs are general assembly, board of directors and supervisory board.
- Limited Company: It is the company established with at least 1 and at most 50 real person or legal entities and the liability of the shareholders is restricted only to the capital subscribed and paid by the shareholder. Minimum capital of 10,000.00 TL is mandatory for the incorporation. Unlike joint stock companies, no stock certificate is issued.
- Commandit Company: It is the company established to operate a commercial enterprise under a trade name and, the liability of some shareholders is restricted only to the capital subscribed and paid by the shareholder (commanditer), and some shareholders is not restricted to the capital subscribed and paid by the shareholder. Legal entities can only be commanditer. No minimum capital is required. The relationships between the shareholders are designated in the articles of association freely
- Collective Company: It is the company established to operate a commercial enterprise under a trade name and, the liability of none of shareholders is restricted only to the capital subscribed and paid by the shareholder. No minimum capital is required. It is mandatory that all the shareholders be real person. The relationships between the shareholders are designated in the articles of association freely.
- Petition and form for company establishment notification, duly filled in and signed by persons authorized to represent the company,
Company Establishment Procedures
The first required document for the establishment is the articles of association of the prospective Company. Firstly 3 copies of articles of association (one copy original) which are notarized are prepared.
Following the date of notarization of articles, within 15 days at latest, application to the related Trade Registry Office with the document set below is needed.
- Notarized signatures of persons authorized to represent the company together with the company trade name,
- Letter of Commitment in accordance with Article 29 of the Trade Registry Regulation,
- Bank receipt of the deposit paid to the Consumers’ Fund account, amounting to one thousandth of the company capital,
- Certified copies of the ID certificates of the real person founders (if they have Turkish citizenship) and their residence certificates,
- In case there are any real persons of foreign citizenship among the founders of the company, the xerox copy of his/her passport to be presented together with the passport itself or its notarized copy,
- In case the foreign shareholder(s) is a legal entity; the original copy of Certificate of Business Activity issued by the competent authorities approved by the related Turkish Consulate or apostilled and its notarized translation,
- In case there are any rights and movable and immovable assets to be put in as capital for a company to be established; expert report of the assessment made to ascertain the value of these and the related court decision for expert assignment.
Incorporation phases of a company shall be as follows;
- Notarization of the Articles of Association
- Depositing the minimum required amount of a capital at a bank
- Registration at the municipality
- This requires the presentation of:
- Rent contract for office premises
- Articles of Association.
- Certified sample of signature.
- Registration to the Trade Registry Office
- Registration at the Tax Office
- Publication in the Commercial Registry Gazette
- Registration at Social Insurance Institution
- Registration at the Chamber of Commerce
LIASON OFFICE ESTABLISHMENT FOR FOREIGNERS
- Required Documents
Companies established in accordance with laws of foreign countries can open liaison offices in
So as to open a liaison office in
Applications for establishment and extension are to be finalized within 5 days following the application provided that the necessary idocuments are complete and proper.
Applications of foreign companies to establish liaison offices so as to operate in sectors subject to special legislation such as money and capital markets, insurance, etc. Are assessed by the relevant regulatory and supervisory authorities.
The following documents have to be submitted to the Directorate General for establishing a liaison office in
- The original copy of “Certificate of Activity” approved by the related Turkish Consulate or approved in accordance with the provisions of the Convention on the Abolishing the Requirement of Legalization for Foreign Official Documents Approval Obligation, prepared on the basis of the Hague Conference on the International Private law,
- Operational report or balance sheet and income statement of the main company,
- The original copy of power of authority issued to the name of the person who is appointed to carry out the operations of the liaison office,
- The original copy of power of attorney in case that another person will carry out the establishment transactions of the liaison office.
- Commencement of Operations
- Information Obligation
After an establishment permit is granted by the Directorate General of Foreign Investments, the relevant Liaison office is supposed to register to the local tax office and to send a copy of the tax office registration document to the Directorate General latest within 1 month.
Liaison offices are supposed to provide the Directorate General with the followings every year latest until end of May so as to informthe authority about their activities of previous years:
- “Data Form for Liaison Office Activities”
- Documents certifying that the previous year’s expenses of the office have been covered by foreign currency transferred from abroad have to be enclosed as well.
- Duration, Permits and Termination
- Opening a branch in Turkey
Liaison offices are granted operation permits for 3 years at most.
For extensions, successive extensions of maximum 3 years each may be granted by taking into consideration the activities of previous years and plans and objectives for the future.
In case a liaison office terminates its activities, the “termination and examination of business note” to be recieved from the related tax office has to be submitted to the Directorate General of Foreign Investments.
Liaison offices cannot claim any money transfer except the residue arising due to termination or liquidation.
The Undersecretariat might cancel the permits of liaison offices in case the offices are found to have violated the legislation.
BRANCH OFFICE ESTABLISHMENT FOR FOREIGNERS
Foreign companies whose capital is divided into shares and which are based abroad can open a branch (or branches) in
The following transactions are subject to approval of the Ministry.
- Opening a branch
- Opening secondary branches linked to the main branch
- Substitution of the company representative based in
- Changing title, business type, or address of the main branch
- Increasing the branch’s capital
- Closing down/liquidation of the branch
- Application to Ministry
Before starting all transactions so as to open a branch in
Next, the following documents are to be prepared and submitted to the Directorate General of Domestic Trade of the Ministry.
- Petition: The petition has to be stamped by the Company or signed by the authorized representative and is to include the following information.
- Title of the company
- Date of establishment of the company
- Nationality of the company
- Amount capital of the company
- Name, nationality and address of the authorized representative residing in
- A letter of commitment which pledges that the authorized representative shall obey all relevant regulations and laws for activities in
- Address of the branch
- Field(s) of activity of the branch
- The Company’s relevant organ’s decision on the issue: This document is to prove that the decision regarding the opening of a branch in
has been made by the authorized organ(s) of the company. An original copy of the document and its Turkish translation shall be attached to the petition. Turkey
- Articles of Association: An original copy of the company’s Articles of Association and its Turkish translation shall be attached to the translation.
- Branch Capital: The Ministry of Industry and Trade requires an amount which is allocated as the capital of the branch. Please do not interpret this capital as in regular meaning of the capital of a company. It is like a budget of the branch. The Ministry would like to know how much the foreign investor allocates a budget for its branch in
. We recommend you to say an amount between USD 10.000 – 20.000. Once again please keep in mind that is not a capital amount to be paid but an amount allocated as the budget. Turkey
- Establishment and Current Status Documents: An establishment document which shows where the company was established, when it was established and on which country’s law system it was based, and a current status document, showing that the company is still active shall be prepared. An original copy and a Turkish translation of each document shall be attached to the petition.
- Power of Attorney for the representative based in
Turkey: A power of attorney assigning the company’s full authorized representative who resides in has to be prepared and shall include that: Turkey
- The representative shall carry out the activities defined in the company’s articles of association,
- The representative shall represent the company,
- The representative shall represent the company in all possible cases which may stem from the branch’s future activities to take place in
- The representative shall have the authority to assign someone else to his/her post equipped with the same power he/she had before in case he/she is to temporarily stay abroad.
- The representative shall be authorized to assign new representatives in case any subordinates are opened in future.
- Ratification of Documents: All documents mentioned above needs to be;
- ratified by a notary public and then to be legalized by the Turkish Consulate General in the country where the company is based or;
- apostilled in line with the convention abolishing the requirement of legalization for foreign public documents
- Submission of Documents to the Trade Registry Office: The fixed application forms need to be filled by the authorized person and the documents above shall be submitted to the registry. The registration takes 1 week at the most. However, it generally takes 2-3 days. The authorized person shall also submit a circular of signature.