INTERNATIONAL FOREIGN INVESTMENT LAW
INVEST IN TURKEY
If you are interested in making an investment in Turkey, we would say, this article is prepared just for you. Turkey is a very attractive country indeed for foreign investors. More than twelve thousand companies with foreign capital are established in our country every year. Under this article our lawyers prepared, apart from the sectoral reasons, we will outline the reasons why foreign investors prefer Turkey for investment, the types of investments that can be made in Turkey, the types of companies that can be established in Turkey, the procedures to be held before and after company formation in Turkey and continuous expenses of an established company. We will also be providing key information generally foreign investors need before setting up a business in Turkey and also about work permit and residence permit in order to shed light to foreign investors for their investment to be made in Turkey. For your detailed and complex questions on how to invest in Turkey, you can contact our lawyers.
If you are willing to invest in Turkey, you can kindly contact with lawyers of MESCI Law Firm and obtain detailed and project based information on the legal matter. Our law firm in Turkey acts with teams of dedicated lawyers who are experts on foreigners law, investment in Turkey, company establishment, business set up in Turkey and obtaining Turkish citizenship. Our lawyers are also experts in the procedures to be held on before and after company formation, minimizing the risks that may arise procedurally and guiding you in any legal manner you may need.
Reasons to Invest in Turkey
Growing Economy
You may prefer to invest in Turkey due to the growing economy. Turkey has grown significantly for the last couple of years with its mega projects and research and development investments. According to the IMF estimation, Turkey will be one of the 20 largest economies in the world.
A Liberal Investment Environment
Turkey offers investors a business-friendly environment where setting up a company takes an average of 6.5 days. Foreign investors have equal rights by law and can directly establish a company with 100% ownership. Turkey has been the second-largest reformer among OECD countries regarding FDI restrictions.
Citizenship for Foreign Investors
You can choose to invest in Turkey to obtain Turkish citizenship. Foreigners who make a fixed capital investment of 500,000 USD, purchase property worth 400,000 USD (held for 3 years), or employ at least 50 people can acquire Turkish citizenship by exceptional means.
Low Taxes and Incentives
Turkey provides low taxes and incentive opportunities. Corporate tax rates are competitive, and exemptions are available for companies in free zones, technology development zones, and industrial zones. Turkey also has agreements with many countries to prevent double taxation.
Population Targeted by Foreign Investors
Turkey offers a dense potential consumer mass with a population exceeding 84 million. The young population in the 15-24 age group is significant, with a youth population rate of 15.3%, much higher than EU member countries. Nearly half of the population is under the age of 32.
Competitive and Qualified Workforce
The qualified workforce encourages foreign investors. Turkey’s young, educated, and motivated population increases workforce productivity. With over 8 million students enrolled in higher education programs, the talent pool is expanding day by day.
Before and After Company Formation Transactions You Should Be Aware Of
Before Incorporation
- Market Research & Planning: As a foreign investor, determining the field of activity, identifying competitors and customers, and creating a business plan with a lawyer and accountant is legally and commercially beneficial.
- Detecting Liabilities: It is crucial to detect legal liabilities before establishing a company. Certain companies (Banks, Insurance, Asset Management, etc.) require ministry permission. Similarly, payment institutions require an operating permit from the Central Bank.
- Articles of Association: Preparation of Articles of Association based on your specific fields of activity saves time. You should clarify tax exemptions with a financial advisor beforehand.
- Brand & Domain Check: We recommend checking the availability of the company title through MERSIS, conducting a trademark similarity check via the Turkish Patent and Trademark Office, and verifying domain availability to avoid future infringement or unfair competition lawsuits.
After Incorporation
- Legal Personality & Bank Account: Following registration in the Trade Registry, the company gains legal personality. Depending on the company type, the bank account is opened during or after establishment.
- Notary Procedures: It is obligatory to have the signature circular prepared and corporate books notarized. The trade registry certificate must also be issued.
- Tax Office Registration: Your financial advisor will apply to the Tax Office with documents (Articles of Association, signature circular, lease contract) to open the taxpayer record. Tax officers will physically visit the address to verify the company’s existence before or after the tax certificate is approved.
- Social Security (SGK): Notification to the trade registry is deemed as notification to the Social Security Institution. However, if the company has employees, the accountant must visit the Institution to present personnel information and report the number of employees.
Residence Permit in Turkey
We highly recommend our foreign investor clients to obtain a short-term residence permit if they are willing to stay in Turkey during and after the company formation. Although granted for one year, this period can be extended up to two years for Istanbul. Applications for extension can be made within 60 days before expiry.
Application Process
Online Application
Visit e-ikamet.goc.gov.tr, select “First Application”, fill the form, and book an appointment.
Print & Prepare
Print the application form. You can legally stay in Turkey with this form until the appointment date.
Appointment
Submit documents on the appointment day. Missing documents may be requested depending on stay reasons.
Registration
After receiving the permit, register at the District Population Directorate within 20 days.
⚠️ Important Update: Real Estate Value Requirement
As of 26 April 2022, residence permits are no longer given to foreigners with a simple rental contract. According to new regulations, foreigners must purchase a house in Istanbul with a value of at least 75,000 USD. This value must be indicated in both the real estate appraisal report and the title deed.
Required Documents
- Residence permit application form (Signed).
- Original and notarized copy of passport.
- 4 Biometric photos (White background, last 6 months).
- Statement of sufficient financial means.
- Receipts of residence and card fee payments.
- Valid health insurance (Covering permit period).
- Proof of Address: Notarized rental agreement or Title Deed ($75k+ rule applies).
- Marriage certificate (if applicable).
- Apostilled criminal record from home country.
- Potential tax number (Obtained by our lawyers).
- Health certificate from a Turkish public hospital.
- E-visa copy or visa stamp.
- Power of Attorney for our immigration lawyers.
Key Legal Notes
- Passport Validity: Passport must be valid for at least 60 days longer than the requested permit period.
- Work Permit: A work permit replaces a residence permit. You do not need both.
- 120-Day Rule: The rule cancelling permits for staying abroad >120 days was abolished in 2016.
- Citizenship: Residing in Turkey for 5 consecutive years may make you eligible for Turkish Citizenship.
Rejection & Appeals
If the application is rejected:
- Objection: Must be made within 30 days of notification.
- Court Action: Annulment lawsuit can be filed within 60 days.
- Re-application: If rejected, a new application within 6 months must be based on a different legal reason.
- Deportation: If no stay of execution is granted and visa expires, you must leave within 10 days.
SHOULD WORK PERMIT BE OBTAINED FOR FOREIGNER PARTNER OF THE COMPANY
On the other hand, we would like to draw attention to the fact that there are a number of mandatory criteria companies shall meet if they are willing to employ foreign personals. It is obligatory to employ at least 5 citizens of the Republic of Turkey in the workplace for which a work permit is requested. If it is aimed to employ more than one foreigner in the same workplace, at least 5 citizens of the Republic of Turkey will have to be employed for each foreign person desired to be employed. On the other hand, if the foreign person to be employed is the partner of the company, the employment requirement of 5 people will be sought for the last six months of the one-year work permit to be given by the Ministry. In addition to this rule, foreign partner of the company requesting a work permit must have at least 20% of the capital, equaling not less than 40.000 TL. Apart from these conditions, workplaces that want to employ foreign personals must have a paid-in capital of at least 100,000 TL, or the gross sales of the company must be at least 800,000 TL, or the export amount for the last year must be at least 250,000 USD.
In addition, if your work permit is rejected, you must appeal the rejection decision with a petition to the Ministry of Labor and Social Security, General Directorate of International Labor, within 30 days of the notification of the rejection decision to the person made the application. In case of refusal as a result of the examination, an action for annulment will have to be filed before the administrative judiciary.
Contact Our Company Formation Lawyer in Turkey
If you are in need of a company formation lawyer in Turkey, real estate lawyer in Turkey, foreign direct investment lawyer in Turkey and real estate lawyer in Turkey, MESCI Law Firm is pleased to assist you. Our law firm in Turkey, experienced for many years in different jurisdictions consists of lawyers demonstrated technical, practical and academic success on sub-areas of corporation and commercial law, foreign investment law and immigration law. Please do not hesitate to contact our lawyers in Turkey for your queries, we offer proactive and high quality services to our national and international clients.
Frequently Asked Questions About Company Formation in Turkey
Yes. You do not need to be physically present in Turkey to establish a company. By issuing a Power of Attorney (PoA) to our lawyers from a Turkish Consulate in your country, we can handle the entire incorporation process, tax registration, and chamber of commerce procedures on your behalf.
Yes. According to the Foreign Direct Investment Law, foreign investors have the same rights as Turkish citizens. You can own 100% of the company shares and be the sole director without needing a local Turkish partner.
As of the latest regulations (2024), the minimum capital requirement for a Limited Liability Company (LLC) has been increased to 50,000 TL. However, for foreign investors planning to obtain a work permit, we highly recommend a paid-in capital of at least 100,000 TL to meet ministry criteria more easily.
Yes. Virtual offices are legal and widely used in Turkey. It is a cost-effective solution for foreign investors who do not need a physical workspace. The tax office officers will visit this address for verification, and virtual office providers manage this process professionally.
Once the Power of Attorney and other required documents reach us, the official registration with the Trade Registry typically takes 3 to 5 business days. Including tax registration and bank account opening procedures, the company is usually fully operational within 1-2 weeks.
No. Establishing a company does not automatically grant a work permit. To obtain a work permit as a shareholder, the company must generally employ at least 5 Turkish citizens and meet specific capital requirements (100,000 TL paid-in capital or certain gross sales figures).
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