How to open a sole proprietorship and LLC in Turkey in 2023?

It is not difficult for a foreigner to start a business in Turkey. The government is especially loyal to individual entrepreneurs, but the registration of an LLC does not cause problems. It is convenient that one person can be a founder, a shareholder, and a director at the same time.

The main difference for a foreigner between the registration of an LLC and an individual entrepreneur is the need to have a residence permit (ikamet) when registering in the legal form of an individual entrepreneur. The advantage of an LLC, as in other countries, is the possibility of opening a joint business with both Turkish citizens and foreigners.

How to register an individual entrepreneur in Turkey (Gerçek kişi):

  1. Get a residence permit (ikamet) and TIN (vergi numerasi). If the residence permit expires in six months, it will not be possible to issue an IP. It is for this reason that relocators from Turkey often open individual entrepreneurs in neighboring Georgia or Armenia, where there is no requirement for a residence permit.

  2. Rent or purchase an office in order to register your address there as an individual entrepreneur. You can also use your actual place of residence in Turkey.

  3. Prepare documents for registration as an individual entrepreneur. Wait for a decision.

  4. Open a bank account in Turkey.

  5. If the type of activity involves obtaining a license, resolve the issue as soon as possible.

The percentage of positive decisions is now high. Türkiye is interested in receiving investments from citizens of other states.

Registration of LLC (limited şirket) in Turkey.

Many choose LLC as a form of business registration. This legal form exists in almost all countries and is the most popular among entrepreneurs. The minimum for registering an LLC is 10,000 lira, and the initial contribution is at least 25% of the amount, it must be paid within a year. Everything else is paid for another two years. If the owner needs to apply for a work visa, then the entire amount must be paid immediately, before the start of registration of the LLC.

The entire procedure goes through the Trade Registry Directorate. The notary only draws up the signatures of the general director for the representative of banks and government agencies. In the absence of a residence permit, the owner often appoints a nominal executive director – a Turkish citizen. As soon as you register a legal entity, this person is either fired or demoted, allowing him to continue to represent the interests of the company, but he no longer has any relation to bank accounts.

The procedure for registering an LLC is approximately the same as in other countries. A standard list of documents is required:

  • decision of the board of directors confirming the fact of consent to the opening of the company;

  • decision of the board of directors on the delegation of authority to a trustee;

  • copies of foreign passports of absolutely all founders;

  • the tax number of the company and the name of the authority that regulates the deductions;

  • company charter, evidence of financial and tangible assets.

  • an application for opening an LLC – filled out in a special form;

  • Signature of the representative of the company, certified by a notary;

  • power of attorney for a representative (with the right to sign and seal);

  • 4 photographs of the head;

  • information about the legal address, name, type of activity, assets, registration number;

Naturally, the listed documents must be in Turkish. The work is entrusted only to a certified translator. Further, the papers are certified by a notary and apostilled. In most cases, the opening is assigned to local firms.

Taxes in Turkey

Companies and individual entrepreneurs in Turkey pay various types of taxes accepted in many countries of the world. The main ones include:

  1. Income – from 15 to 40%, depends on the exact size of the profit.

  2. VAT – in most cases 18%, but there are reduced rates of 1-8% for those industries that are considered important for life.

  3. Corporate tax or income tax – 23%, but can be reduced to 5%.

  4. Tax on dividends – from 10 to 15%.

  5. Stamp duty – from 0.189 to 0.948%, from salary – 0.759%.

  6. Taxes on the payroll fund – 20.5% are paid by the employer, 14% – by the employee.

  7. Unemployment insurance – 2% from the employer, 1% from the employee.

Registering a business in Turkey will allow you to avoid problems with the law, legalize income, which in turn will make it easier to extend a residence permit, and makes it possible to receive loans. The unique geographical position, the regular influx of tourists, as well as low salaries make it possible to open a fast-growing business in Turkey that will allow you to live in the country and travel around the world. Also, the undoubted advantage of Turkey is the possibility of opening an account in this country for a non-resident company. Among the shortcomings, one can note the absence of the USN regime, which is present in Kazakhstan, Kyrgyzstan and other countries of the post-Soviet space, which, due to low tax burdens, attract most of the small businesses from the Russian Federation, while the Turkish IP for small businesses is, in the vast majority, an option to operate exclusively within Turkey.

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