April 18, 2024

Business Bib

Business & Finance Blog

Investing In A Company In Turkey: Choose Any Of These 5 Types

3 min read

Investors worldwide take an interest in establishing a company in Turkey because of the following reasons:

  • A straight forward tax regime
  • A great domestic economy and 
  • Generous investment incentives

Due to these reasons, company formation in Turkey is popular and ever-emerging. But as an investor, the first thing to determine is the type you want to invest in Turkey. This narration will give you comprehensive information.

Top 5 Types of Companies an Investor can Establish in Turkey

Let’s dig deep into the five types of companies for investors to establish a company in Turkey.

#1 Collective Company

Collective companies will form under two co-founders. These founders should have the right & responsibility to manage the establishment separately. The management task gets assigned to one or more partners. These companies operate commercial companies under one trade name.

No shareholder’s liability stays limited to the capital subscribed or paid. Here, no minimum capital is essential. In a collective enterprise, the shareholders should be real persons. The obligations and rights of shareholders get determined by articles of association.

#2 LLC or Limited Liability Company

LLC is one of the most common types of establishments in Turkey. Usually, Limited Liability Companies are low-tier or mid-tier companies. Note that forming an LLC involves a simple registration procedure. Besides, it includes low corporate taxes and several perks. 

An LLC gets discovered by a minimum of one member. They are liable for the company’s debts and losses. LLC companies cannot issue any stock certificate.

#3 Joint Stock Company

Next, Turkey’s third type is the Joint Stock companies. They get established for economic purposes and are non-prohibited under Turkey’s laws. Here, the capital is definite. It gets divided into several shares, liable for debts with the property holding solely. 

Here, shareholders are liable to the company for capital shares (according to their commitment). It gets established with one single share. Shareholders are real and legal individuals. The company gets articles of association registered at the headquarters. It’s the only type where shares will be offered to the public & traded on share exchanges.

#4 Commandite Company

It gets established to run a commercial enterprise. But note that it should be under the trade name. The liability of shareholders may remain limited to the capital (paid or subscribed by shareholders). But a few shareholders may not consider any liability limitations. 

Another thing about commandite companies is that legal entities can be commanditer. And there’s no requirement for any minimum capital. Shareholders’ obligations and rights get determined by articles of association. 

#5 A sole proprietorship

A sole proprietorship encompasses filling out a form with the Trade Register. It also involves registering with local tax authorities a minimum of 30 days prior to initiating the operation. 

The company also needs registration for social security purposes. That’s the biggest advantage of initiating a sole proprietorship in the country. But note that such an establishment requires a local representative or manager to consult local authorities. 

But before investing in the company formation in Turkey, consider a few things. Determine the company service, version, capital amount, shareholder structure, and auditing choices before you invest. Seek legal consulting services from FO Consultancy today.