The most popular types of companies in Turkey are Joint Stock and Limited Company. In both Joint Stock Companies and Limited Companies, fields of activity, operations, and other corporate matters are governed by articles of association (similar to certificate of incorporation in Delaware companies), within the framework set out by the Turkish Commercial Code numbered 6102 (“TCC”). Both of those company types are based on “limited liability” principle.
a. Joint Stock Companies (“Anonim Şirket” or “A.Ş.”)
At least one shareholder (real person or legal entity) and a minimum capital of TRY 50,000 are required. In case of the shares are subscribed in cash, at least 25% of the share capital must be paid up before registration and the remaining share capital shall be paid within 24 months following the registration.
The legal framework on corporate governance of Joint Stock Companies are better developed and more flexible.
b. Limited Companies (“Limited Şirket” or “Ltd. Şti”)
At least one shareholder (real person or legal entity) and a minimum capital of TRY 10,000 are required. Share capital must fully be paid in.
Limited Companies are generally used for projects and investments in smaller scale.
WHAT ARE THE REQUIRED STEPS AND PROCEDURES FOR COMPANY FORMATION IN TURKEY WITH FOREIGN CAPITAL?
First of all, the name of the company, the scope of the subject of activity, the center, manager / representative, the capital and shares shall be determined, and Articles of Association of the new company shall be drafted.
Than the foreign shareholder must obtain a Turkish Potential Tax ID and open a bank account in Turkey.
By opening a bank account on the Potential Tax ID, legally required amount of the New Partnership capital must be deposited into this account. Notarized copies of company documents shall be recorded in the central registry system (MERSIS) and an application shall be made to the trade registry office for the documents listed below:
Chamber of commerce registration petition,
Notarized Articles of Association of the company,
If the foreign partner is a natural person, a translated notarized copy of the passport and potential tax number,
If the foreign partner is a legal entity, a notarized translation of the activity document and registry summary that contains the apostille annotation or that has been approved by the Turkish consulate, by the chamber of industry or commerce or authorized courts,
Notarized certified power of attorney issued to the real person who will carry out the establishment procedures,
Signature declaration (registration request) under the company title of the Notarized Authorized Officials,
Stamped and signed bank receipts,
Stamped and signed bank receipt showing that %0,04 of the capital has been deposited into the Competition Authority's account,
Chamber of Commerce Registration declaration.
Please note that all documents need to notarized and Apostilled from applicant origin country as long as the shareholder's origin country is member of Apostille convention, otherwise for countries that are not member of Apostille Convention, first the documents need to approved or legalized, then all documents need to translated to Turkish language by a sworn translator, and then all documents need to super legalized in Turkish consulate in the origin country of the shareholder.
After the completion of all these transactions, the company will become a legal entity after its registration by the trade registry office. Subsequently, transactions such as arranging signature circulars, registering books, obtaining a tax certificate can be carried out to the manager or representative. In addition, a copy of the "Company and Branch Establishment Notification Form and Petition" completed at the establishment stage of the Trade Registry Offices, a copy of any main contract changes subject to company registration and announcement, a copy of the "List of Partners" or "Attendant Schedule", shall be submitted to the Trade Ministry.
Last Update: 15 July 2020
For more information: info@yonet.av.tr
This article is provided by YÖNET Attorneys at Law to keep its clients and other interested parties informed of current legal developments that may affect or otherwise be of interest to them. The information is not intended as legal advice or legal opinion and should not be construed as such.