Capital companies are the most common form of business entities in Turkey utilized by both local and foreign investors. Investors may choose to participate into an already existing capital company or establish a new one. 100% ownership of Turkish corporate entities by foreign companies and/or individuals is permitted with minor sectoral exceptions such as civil aviation.
There are a number of company structures available in Turkey such as joint stock companies, limited liability companies, collective companies, partnerships limited by shares and cooperative associations. Foreign investors usually prefer establishment of either a joint stock company or a limited liability company depending on the contemplated level of their business activity. Under Turkish law, both joint stock corporations (similar to ‘Corporations’ in the U.S. and ‘Société Anonyme’ in Europe) and limited liability companies (similar to ‘LLC’ in the U.S. and Europe) are capital companies, as opposed to so-called “personal companies” used for individual service providing.
In capital companies, the liability of shareholders is limited with the share capital subscribed in principle. In both joint stock companies and limited liability company types, fields of activity, operations, and other corporate matters are governed by their company articles of association (similar to ‘certificate of incorporation’ and ‘bylaws’ in other jurisdictions) within the framework set out in the TCC. Neither form requires any minimum share ownership by Turkish shareholders. According to the TCC, foreign investors may establish a company in Turkey with single real or legal person shareholder.
Alternative to directly establishing or participating in a capital company, investors may choose to invest in Turkey through formation of a branch office or a liaison office of an already existing foreign commercial entity established at another jurisdiction as well.
The company registration at the trade registry only takes three (3) to five (5) days and the whole procedure for incorporation of takes less than two (2) weeks following the submission of documentation for both types of capital companies (limited liable companies and joint stock companies) including tax registration and work place opening permit. For branches and liaison offices an additional two (2) weeks shall be reserved to obtain the special permissions from the relevant authorities.