Invest in Turkey

Investement in Türkiye as it boasts a robust and rapidly expanding economy with convenient global market access at the crossroads of Europe, Asia, and Africa, and well-developed logistics infrastructure, These factors make it an attractive destination for sustainable foreign direct investments

Amr Farag - • Information about Legal advice and incorporation work

Investing to Türkiye

TOP REASONS

Large Local and Regional Market

Creating a Connection Between the East and the West: Establishing an efficient and economically sustainable entry point to critical markets.

Global Enterprise Center

Nearness to Key Markets

Perfect Hub for R&D Investments

Highly Capable and Economically Competitive Workforce

Positive Population Characteristics

Open and Investment-Friendly Environment

Incentives for Investment

Civil and Tax Related Regulations

• Highly Competent and Cost-Effective Workforce:

Türkiye boasts a labor force of approximately 32.7 million people, ranking as the third-largest

labor force in Europe

•Positive Demographics:

Türkiye has a youthful and dynamic population,

with over half of its residents being under the age of 32

•Business-Friendly Investment Environment:

Türkiye offers an open and welcoming climate for foreign direct investment (FDI), along with robust investor protection measures

•Incentives for Investment; Encouragements for investing in machinery,

equipment, and facilities in Turkey

•Civil and Tax Laws:

have been adapted from Swiss and German laws and during the EU process have been continuously updated.

«Türkiye boasts a robust and rapidly expanding economy, characterized by business-friendly regulations, a substantial talent pool, and convenient global market access at the crossroads of Europe, Asia, and Africa. These factors make it an attractive destination for sustainable

foreign direct investments (FDI).

With its strategically advantageous location, strong manufacturing capabilities, youthful and dynamic population, and well-developed logistics infrastructure, Türkiye has emerged as

a regional economic powerhouse. Multinational corporations find ample support for their manufacturing endeavors in Türkiye, where they benefit from the presence of R&D centers, design teams, procurement offices, logistics hubs, and regional management centers.

Presently, nearly 80,000 international companies are conducting operations in Türkiye.»

2- LEGAL ENVIRONMENT

OVERVIEW

The Republic of Türkiye was founded in 1923 as a democratic, secular, and constitutional republic. Over time, it has progressively strengthened its ties with the Western world, particularly through its pursuit of European Union (EU) integration. Türkiye initiated full membership negotiations with the EU in 2005, building on its status as an associate member of the European Economic Community since 1963. Additionally, Türkiye signed a customs union agreement with the EU in 1995.

Türkiye has adopted an open and inviting stance towards foreign investments. The country has been progressively liberalizing its legislation since the early 1990s, implementing reforms as needed to align with European Union standards. In judicial matters, foreign nationals can generally anticipate receiving a fair trial

HIGHLIGHTS

The primary legal framework in Türkiye is the 1982 Constitution. The country's judicial system draws its inspiration from various civil law systems found in continental Europe:

• Civil and company law exhibits similarities to the German model.

• The law of obligations takes inspiration from the Swiss legal code.

• Penal law derives influence from the Italian Penal Code.

• Administrative law is influenced by French legal practices.

Furthermore, Türkiye is a member of the European Court of Human Rights (ECHR), emphasizing its commitment to upholding human rights and legal standards in line with European principles.

INCORPORATION PROCESS

1-Tax Registry

Once the decision to establish a presence in Türkiye is made,

the initial step is to obtain a tax identification number.

2-Entity Type

The next step is to determine the type of entity that will be established and collection of necessary documentation.

3 - Trade Registry

Ultimately, within 3-4 days of submitting the required documentation to the trade registry, the company will be officially established through a declaration in the trade registry gazette

1-Corporations & Subsidiaries

2-Branches

3-Liaison Offices

Corporations vs Subsidiaries

Foreign companies can establish two types of subsidiaries: Joint Stock Corporation (Anonim Şirket) and Limited Liability Company (Limited Şirket). Each has its own advantages and requirements.

Joint Stock Company

  • Shareholders: Can be 100% foreign owned.
  • Limite Liability of the Shareholders: Limited to their contribution to the company’s share capital. Shareholders are not personally liable for tax or other public debts.
  • Scope of Activities: Any commercial objective
  • Minimum Capital Commitment TL 50,000

Limited Liability Company

  • Shareholders: Can be 100% foreign owned.
  • Limite Liability of the Shareholders: Limited to their contribution to the company’s share capital. Shareholders are not personally liable for tax or other public debts.
  • Scope of Activities: Any commercial objective
  • Minimum Capital Commitment: TL 10,000

Residence

Taxation in Türkiye is determined by the location of a taxpayer's legal or business centers. If both the legal and business centers are situated in Türkiye, individuals or entities are liable to pay taxes on their global income. Conversely, if neither the legal nor the business center is located in Türkiye, the company is classified as a non-resident entity and is only subject to taxation on income generated within Türkiye. The legal center is formally documented in the Articles of Association, while the business center corresponds to the place where primary business activities are concentrated.

In accordance with Turkish tax laws, income taxation diverges significantly depending on the taxpayer's residency status. Resident entities are obligated to pay taxes on their income worldwide, whereas non-resident entities are solely taxed on income arising from activities conducted within Türkiye."

For taxes details in TurkeyContinued article (click here)

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