ESTABLISHING A BUSINESS
Turkey’s FDI Law is based on the principle of equal treatment, allowing international investors to have the same rights and liabilities as local investors.
The conditions for setting up a business and share transfer are the same as those applied to local investors. International investors may establish any form of company set out in the Turkish Commercial Code (TCC), which offers a corporate governance approach that meets international standards, fosters private equity and public offering activities, creates transparency in managing operations and aligns the Turkish business environment with EU legislation as well as with the EU accession process.
Turkey has introduced reforms with a view to making it easier to do business in order to enhance the investment environment, eliminating red tape in setting up a business and minimizing costs and procedures. To this end, establishing a company is now only carried out at Trade Registry Offices located in Chambers of Commerce and designed to be a ‘one-stop-shop’. The process is completed on the same day.
Company Types under TCC and Alternative Forms
There are corporate and non-corporate forms for companies under the TCC, which states that companies may be established under the following types:
a. Corporate forms
- Joint Stock Company (JSC)
- Limited Liability Company (LLC)
* Cooperative Company
Although some financial thresholds (i.e., minimum capital) and organs differ from each other, the procedures to be followed for establishing a JSC or an LLC are the same.
b. Non-corporate forms
- Collective Company
- Commandite Company
Although companies may be established according to these five different types, JSC and LLC are the most common types chosen both in the global economy and Turkey.
An application with the following documents must be submitted to the relevant Trade Registry Office for the registration of a branch:
- Petition (must be signed either by an authorized signatory under the company seal or by proxy; if signed by the latter, then the original or the notarized copy of the power of attorney must be attached to the petition)
- The resolution of the competent organ of the parent company to open a branch
- A certified original copy of the parent company’s articles of association
- Certificate of Activity of the parent company or any equivalent documentation that sets forth registration and current status of the parent company
- A power of attorney granted by the parent company in favor of its resident representative, assigning full representation and accountability
- Five copies of the Establishment Declaration Form (the related fields must be filled and signed by the authorized person)
- Two copies of the power of attorney stating the representative in Turkey
- If the branch representative is a Turkish national, a notarized copy of his/her ID card. If not, a notarized copy of the authorized representative’s passport translated into Turkish
- Two copies of the signature declarations of the branch representative under the branch title
- A letter of commitment (must be signed by an authorized person)
- A Chamber Registry Declaration Form Statement to be obtained from the Trade Registry Office (including photographs of the branch representatives)
It should be noted that all the necessary documents that will be issued and executed outside Turkey must be notarized and apostilled or alternatively ratified by the Turkish consulate where they are issued. The original executed, notarized, and apostilled documents must be officially translated and notarized by a Turkish notary.