What Foreign Entrepreneurs Should Know Before Starting a Business in Turkey

Turkey has become an increasingly attractive market for foreign entrepreneurs, startups and international companies looking to expand between Europe, Asia and the Middle East.

Its strategic location, large domestic market, manufacturing capabilities, technology ecosystem and growing startup environment make Turkey an interesting destination for businesses in sectors ranging from technology and e-commerce to consulting, manufacturing, trading and professional services.

However, starting a business in Turkey involves more than simply registering a company. Foreign entrepreneurs need to consider the appropriate legal structure, business activity, capital requirements, taxation, banking, accounting, employment and, where applicable, work authorization.

Understanding these issues before entering the Turkish market can help entrepreneurs avoid unnecessary costs and compliance problems later.

Can Foreigners Start a Business in Turkey?

Yes. Foreign individuals and companies can generally establish businesses in Turkey, and 100% foreign ownership is possible in many sectors.

Turkey’s foreign direct investment framework generally provides foreign investors with the same treatment as domestic investors, although certain regulated sectors may have specific restrictions or approval requirements.

The most common structures considered by foreign entrepreneurs include:

• Limited Liability Company (LLC)
• Joint Stock Company (JSC)
• Branch Office
• Liaison Office

The appropriate structure depends largely on the investor’s business model and objectives.

For example, an entrepreneur planning to build a long-term operating business may consider an LLC or JSC, while an international company that wants to conduct business in Turkey as an extension of its existing organization may consider a branch office.

A liaison office serves a different purpose and is generally intended for non-commercial activities such as market research and representation.

Entrepreneurs who want to understand the incorporation process in greater detail can refer to this practical guide to company registration in Turkey, which explains the main registration steps, documentation and post-incorporation requirements.

Choosing the Right Business Structure

Choosing the appropriate legal structure is one of the most important decisions a foreign entrepreneur makes before entering the Turkish market.

Limited Liability Company

A Limited Liability Company, commonly referred to as an LLC or Limited Şirket, is one of the most frequently used structures for foreign-owned businesses in Turkey.

It can be suitable for:

• Consulting companies
• Technology businesses
• E-commerce companies
• Trading businesses
• Professional services
• Small and medium-sized enterprises

An LLC has its own legal personality and generally offers a relatively straightforward corporate structure.

Joint Stock Company

A Joint Stock Company, known as Anonim Şirket (A.Ş.), may be more appropriate for larger investments, businesses requiring a more sophisticated shareholding structure or companies expecting future investment and expansion.

A JSC has a formal corporate governance structure involving shareholders and a board of directors.

Branch Office

A branch office is not a separate legal entity from its foreign parent company.

It can therefore be appropriate where an international company wants to establish a Turkish presence while operating as an extension of the parent company.

The parent company’s activities, structure and intended operations should be carefully evaluated before choosing this option.

Liaison Office

A liaison office is generally designed for non-commercial activities such as market research, promotion and representation.

It cannot generally be used as a substitute for an operating commercial company.

Foreign entrepreneurs intending to sell products or services and generate commercial revenue in Turkey should therefore consider an appropriate commercial structure instead.

What Does It Take to Register a Company in Turkey?

Once the business structure has been selected, the incorporation process generally involves several stages.

1. Determine the Business Activity

The company’s intended activities should be clearly defined before registration.

This is important because the registered business activity may affect:

• Licensing requirements
• Regulatory approvals
• Tax considerations
• Banking
• Work permit planning
• Sector-specific obligations

Choosing an appropriate business activity from the beginning can prevent unnecessary corporate amendments later.

2. Prepare the Required Documents

The Articles of Association and incorporation documents must be prepared according to the selected company structure.

Foreign shareholders may need to provide documents such as:

• Passport copies
• Foreign company registration documents
• Corporate resolutions
• Powers of Attorney
• Signature documents

Documents issued outside Turkey may require apostille or legalization and certified Turkish translation, depending on their nature and country of issuance.

3. Complete MERSİS Procedures

MERSİS, the Central Registry Record System, is used for commercial registry processes in Turkey.

Company information and incorporation details are submitted through the relevant system before the Trade Registry application.

4. Register with the Trade Registry

The incorporation application is submitted to the relevant Trade Registry Directorate.

Once the registration process is completed, the company’s establishment is recorded in the Trade Registry and published in the Trade Registry Gazette where applicable.

5. Complete Tax and Other Registrations

After incorporation, the company must establish and maintain its applicable tax and other statutory registrations.

Depending on its activities and employees, this can include tax administration procedures, electronic tax applications, Social Security registration and other regulatory requirements.

How Much Capital Does a Foreign Entrepreneur Need?

The required capital depends on the legal structure selected.

As of 2026, the minimum share capital for a standard non-public Joint Stock Company is TRY 250,000, while the minimum capital for a Limited Liability Company is TRY 50,000.

However, choosing the legal minimum is not necessarily the same as determining the appropriate capital for a business.

Foreign entrepreneurs should consider:

• Expected operating expenses
• Business activity
• Licensing requirements
• Staffing
• Banking requirements
• Investment plans
• Future expansion
• Work permit considerations

A company expecting significant operating expenses or investment may need a capital structure that is more appropriate to its actual business plan.

What Tax and Compliance Obligations Should Foreign Entrepreneurs Expect?

Company incorporation is only the beginning of a business’s obligations in Turkey.

Depending on the company’s structure and activities, it may have responsibilities relating to:

• Corporate income tax
• Value Added Tax (VAT)
• Withholding tax
• Accounting and bookkeeping
• Electronic invoicing
• Electronic ledgers
• Payroll
• Social Security
• Periodic tax declarations
• Statutory reporting

The exact obligations depend on the company’s activities, transactions, tax status and employees.

Foreign entrepreneurs should therefore establish their accounting and tax compliance in Turkey framework from the beginning rather than waiting until the business becomes operational at scale.

This becomes particularly important when a Turkish business has foreign shareholders or conducts cross-border transactions.

Opening a Corporate Bank Account

Opening a corporate bank account is another important part of establishing a business in Turkey.

However, company registration does not automatically guarantee bank account approval.

Turkish banks conduct their own customer due diligence and may evaluate:

• Shareholders
• Ultimate beneficial owners
• Directors and authorized signatories
• Business activity
• Expected transaction volume
• Source of funds
• Foreign corporate documents
• Country of origin of shareholders and funds

Requirements can vary between banks and individual applications.

For this reason, foreign entrepreneurs should plan the corporate bank account in Turkey process alongside company incorporation rather than assuming that it will automatically be completed after registration.

Do Foreign Entrepreneurs Need a Work Permit?

Company ownership and the right to work in Turkey are separate matters.

A foreign individual may own shares in a Turkish company without this automatically granting the right to work in Turkey.

Additional requirements may apply if a foreign shareholder intends to actively work for or manage the company.

This distinction is particularly important for entrepreneurs who intend to:

• Act as a company manager
• Serve as a board member
• Perform operational duties
• Work as an executive
• Receive employment income
• Conduct business activities physically in Turkey

The applicable work authorization requirements depend on the individual’s role, company structure and circumstances.

Therefore, immigration and work permit considerations should be addressed before deciding how the Turkish company will be managed.

What About Employees and Social Security?

A Turkish company employing personnel will generally have employer obligations relating to payroll and the Social Security Institution (SGK).

These obligations can include:

• Employer registration
• Employee notifications
• Payroll calculations
• Social Security contributions
• Income tax withholding
• Employment documentation
• Periodic declarations

Foreign-owned companies may benefit from coordinating accounting, payroll, HR and Social Security processes rather than treating each function as an isolated administrative task.

Common Mistakes Foreign Entrepreneurs Should Avoid

Entering the Turkish market can be much easier when common mistakes are identified before incorporation.

Choosing the Wrong Company Structure

An LLC, JSC, branch and liaison office have different legal and commercial purposes.

The simplest or cheapest structure is not necessarily the most appropriate for every business.

Choosing an Inappropriate Business Activity

The registered business activity should accurately reflect the company’s intended operations.

Certain activities may require additional licenses, permits or regulatory approvals.

Assuming Bank Account Opening Is Automatic

Trade Registry registration and bank account approval are separate processes.

Banks conduct their own compliance and KYC assessments.

Ignoring Post-Incorporation Compliance

Some entrepreneurs focus heavily on establishing the company but overlook what happens afterward.

Accounting, tax declarations, electronic tax systems, payroll and SGK obligations may continue throughout the company’s operations.

Assuming Ownership Automatically Provides Work Authorization

Being a shareholder does not necessarily mean that the individual can work in Turkey without meeting the applicable work authorization requirements.

Choosing a Provider Based Only on Price

The incorporation process is only one stage of operating a company in Turkey.

Foreign entrepreneurs should also consider whether their local service provider can support:

• Accounting
• Tax compliance
• Payroll
• SGK
• Corporate banking
• Corporate changes
• Work permits
• Ongoing regulatory compliance

A Practical Checklist for Starting a Business in Turkey

Before entering the Turkish market, foreign entrepreneurs should consider the following checklist.

Business Planning

• Define the business model.
• Identify target customers.
• Determine whether Turkey will be a local operating market or a regional hub.
• Evaluate sector-specific regulations.

Corporate Structure

• Choose between an LLC, JSC, branch or another appropriate structure.
• Determine ownership.
• Appoint managers or directors.
• Plan the share capital.

Registration

• Prepare foreign shareholder documents.
• Complete MERSİS procedures.
• Register with the Trade Registry.
• Complete applicable tax registrations.
• Establish required electronic tax applications.

Banking and Finance

• Select an appropriate bank.
• Prepare KYC documentation.
• Prepare source-of-funds documentation.
• Establish accounting and payment procedures.

Tax and Compliance

• Determine VAT and tax obligations.
• Establish accounting and bookkeeping procedures.
• Set up e-Invoice and e-Ledger where applicable.
• Establish payroll and SGK procedures if employees will be hired.

Immigration

• Determine whether shareholders, directors or employees require work authorization.
• Coordinate corporate and immigration requirements where applicable.

Final Thoughts

Turkey offers substantial opportunities for foreign entrepreneurs, but successful market entry requires more than establishing a legal entity.

The most important decisions are often made before incorporation: choosing the appropriate corporate structure, defining the business activity, planning capital, understanding tax obligations, preparing foreign documents correctly and determining how banking and management will operate.

Once the company is established, attention should shift toward ongoing accounting, tax, payroll, banking and regulatory compliance.

For international entrepreneurs, understanding these requirements before entering the market can make the process more predictable and help avoid costly corporate changes or compliance problems later.

Starting a business in Turkey is therefore best approached as a complete market-entry process rather than simply a company registration exercise.

About A&M Consulting Co.

A&M Consulting Co. is a Turkey-based professional consulting firm providing accounting, tax, payroll, company registration and corporate compliance services to foreign investors and international companies operating in Turkey.

The firm supports international businesses with both company establishment and ongoing compliance requirements in Turkey.