March 18, 2025
Incorporation of LLC in Turkey: Key Insights for Entrepreneurs and Investors
Turkey, strategically located at the crossroads of Europe and Asia, offers significant opportunities for businesses seeking to establish a presence in a growing market. With a robust economy, favorable business climate, and advantageous geographical position, Turkey has become an attractive destination for international investment. One of the most popular business structures in Turkey is the Limited Liability Company (LLC), or “Limited Şirket”, which is widely used by both local and foreign investors.
This blog outlines the benefits, process, and legal considerations associated with incorporating an LLC in Turkey, offering valuable information for those looking to establish or expand their business in this dynamic market.
Why Choose an LLC in Turkey?
Before exploring the specifics of LLC incorporation, it is important to understand why this business structure is often the preferred choice for many entrepreneurs in Turkey.
- Limited Liability Protection
An LLC provides limited liability protection to its shareholders, meaning their personal assets are shielded from the company’s debts. This protection limits risk exposure to the capital invested in the business, making the LLC an appealing option for entrepreneurs seeking to reduce their financial risks.
- Flexible Ownership and Management
An LLC in Turkey can be formed with just one shareholder and can be managed by one or more individuals. Unlike other business entities, there is no requirement for a board of directors, simplifying the management process. This flexibility makes LLCs ideal for small and medium-sized businesses (SMEs).
- Tax Incentives
Turkey offers competitive corporate tax rates, which are currently set at 23% (as of 2025). Additionally, businesses in sectors such as technology, manufacturing, and export may benefit from tax exemptions, reduced customs duties, and other government incentives, making Turkey an attractive location for business operations.
- Access to a Large Market
Turkey’s geographical location and trade agreements, including the Customs Union with the European Union, provide businesses with easy access to both local and international markets. This strategic advantage positions Turkey as an ideal hub for trade.
Steps to Incorporate an LLC in Turkey
Incorporating an LLC in Turkey involves several straightforward steps. While it is advisable to consult with legal professionals, the process generally includes the following steps:
- Select the Company Name
The first step is to choose a unique company name. The name must comply with Turkish regulations, including the requirement to end with “Limited Şirket” or “Ltd.” The name should also be indicative of the business activities being conducted.
- Prepare the Articles of Association
The Articles of Association (AoA) is a legal document outlining the company’s internal rules and regulations, including its capital structure, management, and business objectives. The AoA must comply with Turkey’s Commercial Code.
Register with the Trade Registry
To complete the incorporation process, the company must be registered with the Trade Registry. The following documents are required for registration:
- Articles of Association
- Personal identification (passport or national ID) of shareholders and managers
- Proof of company address
- Evidence of capital deposit (at least 25% of the 10,000 TRY minimum capital requirement)
- Legal representation documents (if applicable)
- Once registered, the company’s incorporation is published in the Trade Registry Gazette, officially marking its establishment.
Deposit the Capital
The minimum capital requirement for an LLC in Turkey is 10,000 Turkish Lira (TRY). However, only 25% of this capital must be deposited at the time of registration. The remaining capital can be paid over time.
Obtain a Tax Identification Number (TIN)
The company must apply for a Tax Identification Number (TIN) from the Turkish tax authorities. The TIN is necessary for tax reporting, social security, and other regulatory purposes.
Register for Social Security
If the LLC has employees, it is required to register with Turkey’s Social Security Institution (SGK). This ensures compliance with Turkey’s labor laws and makes the company responsible for social security contributions for its employees.
Obtain Necessary Permits
Depending on the type of business, additional permits or licenses may be required. For instance, companies operating in sectors such as food, healthcare, and finance may need to obtain special licenses or approvals from relevant authorities.
Cost of Incorporation
The costs associated with incorporating an LLC in Turkey are relatively affordable compared to many other countries. Below is a general breakdown of the costs involved:
- Legal fees: Typically range from 1,500 TRY to 5,000 TRY, depending on the complexity of the incorporation process.
- Trade Registry fees: Around 1,000 TRY.
- Notary costs: Generally range from 500 TRY to 2,000 TRY.
- Minimum capital deposit: 10,000 TRY (only 25% is required to be paid upfront).
- Tax Identification Number registration: No charge, although administrative assistance may incur additional fees.
In total, the initial setup costs for an LLC in Turkey typically range from a few thousand TRY to around 10,000 TRY, depending on specific requirements and assistance needed.
Taxation for LLCs in Turkey
LLCs in Turkey are subject to corporate income tax on their worldwide income. The corporate tax rate in Turkey is currently 23%. In addition to corporate tax, LLCs must also meet the following obligations:
Value-Added Tax (VAT): The standard VAT rate is 18%, though reduced rates may apply to specific goods and services.
Withholding Tax: Turkey imposes withholding taxes on certain payments, including dividends, interest, and royalties. These rates may vary depending on the nature of the transaction and any applicable tax treaties.
Social Security Contributions: Employers must contribute to Turkey’s social security system on behalf of their employees. This includes payments for health insurance and pension funds.
Key Benefits of Incorporating an LLC in Turkey
There are numerous advantages to incorporating an LLC in Turkey, particularly for those looking to expand or enter the Turkish market:
- Limited Liability: Shareholders’ personal assets are protected from the company’s debts and liabilities.
- Simplicity and Flexibility: The LLC structure is straightforward to manage, with fewer regulatory requirements than more complex business entities such as Joint Stock Companies.
- Government Incentives: Turkey offers various incentives for businesses, particularly in sectors like technology, manufacturing, and exports.
- Strategic Location: Turkey’s position as a gateway between Europe, Asia, and the Middle East provides businesses with access to a large and diverse market.
Challenges and Considerations
While Turkey offers a wealth of opportunities for businesses, there are some challenges to consider:
- Legal Requirements: The legal framework can be complex, so it is essential to comply with Turkish Commercial Code and other local laws. Professional assistance may be necessary.
- Language Barriers: Turkish is the official language for all legal documentation, and while many business professionals speak English, it is advisable to have a local consultant or translator to help with communication.
- Economic Stability: Turkey’s economy has experienced fluctuations, which could potentially impact business operations. It is important to stay informed about the economic and political landscape.
Conclusion
Incorporating an LLC in Turkey provides a flexible and attractive option for businesses looking to establish a presence in a growing and strategically positioned market. With limited liability, competitive tax rates, and access to significant incentives, the LLC structure offers numerous benefits for local and foreign investors. However, careful attention must be paid to legal requirements and the economic environment to ensure compliance and long-term success. By understanding the process and available opportunities, entrepreneurs can make the most of Turkey’s position as a central business hub between Europe and Asia.
For more information or queries, please email us at
[email protected]
Key Contact
Surendra Singh Chandrawat
Managing Partner
