How To Establish a Company in Turkey

ESTABLISHMENT OF JOINT STOCK COMPANY (ANONİM ŞİRKET) AND ITS REGISTRATION TRANSACTIONS

1. Information and Documentation Required for the Establishment of a Joint Stock Company (so-called ANONİM ŞİRKET)

Below listed documents of company partners; 

1. Certificates of Residence {2 copies for each partner, issued by e-State (e-Devlet) system}
2. Notarized Copy of Identity Cards
3. 3 Copies of Head Shot Photos for Each Partner

Below listed documents of the Company;

1. Registered Address of Headquarters
2. Office Lease Contract
3.  Business Title 
4.  Amount of Capital (TL 50.000 as a minimum)
5. Shares/Rates of Capital
6. Legal Representative/Director of Company

2. Submission to MERSIS System and Preparation of Articles of Association

        For the joint stock company to be established, required details shall be uploaded to MERSIS System, and articles of association shall be prepared. 

  Articles of Association shall include topics listed below:

1. Full title and registered address of headquarters for Company
2. Founding Partners of Company
3. Sectors of activity
4. Amount and shares of capital, mode and conditions of capital payment
5. Specifying the type of share certificates, either they are registered or bearer; privileges provided for certain shares; restrictions on assignment.
6. Apart from capital in cash, non-cash assets to be invested as capital, if any (such as office, vehicle, storage, etc.) 
7. Benefits to be provided to founders, members of the Board of Directors, and other persons.
8. Members of the Board of Directors; and members who are authorised signatories on behalf of the company.
9. Conditions of Holding a General Assembly Meeting, Voting Rights of Partners
10. Duration of the company if it is limited with a time period.
11. The way of corporate announcements.
12. Types and amounts of capital shares committed by partners.
13. Assignment of first Members of Board of Directors

3. Notarization of Articles of Association for Joint Stock Company

         Following the preparation of articles of association which shall then be uploaded to MERSIS system, company details shall be entered into the respective sections of the system for getting a tracking number during the approval stage. MERSIS tracking number shall be transmitted to notary public and 5 copies of articles of association should be notarized after being signed by partners. Moreover, written request for registration (signature declaration) of the person who is authorized to represent the company shall be issued and approved by Notary Public. Notarized copy of identity card shall also be made available for submitting to Tax office during the process of business commencement declaration.

1. Signature declarations of company officials under the title of Company, 2 copies
2. Declaration of Founders signed by Founders of Company
3. Notarized statements of non-partner member(s) of board of directors if any, proving that they accept this duty.
4. In this document, residence, nationality and T.R. ID number shall be specified in case of a Turkish national, and tax identity number or foreigner identification number shall be indicated in case of a foreign national; if the member is a foreign national, then notarized copy of passport shall be enclosed, and if foreign national resides in Turkey, then certified residential document shall also be attached hereunto.

*   In case a legal person is specified as a member of Board of Directors, the resolution of the authorized body including name-surname, address, nationality and T.R. ID Number (tax ID or foreign identification number for foreign nationals) of the real person assigned on behalf of or by the legal person and certificate of residence and notarized copy of passport with Turkish translation in case the real person is a foreign national residing in Turkey

*  In case the legal person which is the member of Board of Directors is a foreign national, the document relevant to current registry records of the legal person

(This document must be notarized in the country where company is officially registered, and shall be ratified by the Turkish Consulate or Ministry of Foreign Affairs in Turkey or pursuant to articles of Convention on Abolishing the Requirement of Legalisation for Foreign Public Documents and it must be officially translated and approved by a Turkish notary.)

4. Tax ID Number of Company and Bank Process

      Potential tax identity numbers are generated by MERSIS system for a joint stock company to be established. This number shall be used as tax identity number after the establishment of company. 
       

      This potential tax identity number and notarized documents are necessary for opening a corporate bank account, and depositing the capital (25% as a minimum) which shall be blocked. Then, bank shall issue a document related with the blockage of capital. Blockage over the certain amount of capital shall be removed upon completion of establishment process, and the respective amount can be drawn cash by the company official.

5. Completion of Establishment Documents and Submission to Trade Registration Office

   Documents listed below shall be submitted to Chamber of Trade for the registration of a company; 

1. 3 copies of notarized articles of association / 4 copies for the establishment of a company with foreign capital
2. Signature Declaration of Company Director, 2 copies
3. Declaration of Registration from Chamber of Trade - with a photo affixed
4. Application Form for Company Registration, 3 copies
5. Founder Shareholders Information Form
6. Bank Document for Capital Blockage
7. Payment for Competition Board Share (to be paid through cashier's desk of Chamber of Trade)

      After completion of process, suchlike documents shall be submitted to Chamber of Trade. In this process, relevant expenses shall be deposited during application. After finalization of company registration process, registration letter, certificate of registration and certificate of activity shall be received.

       Furthermore, Chamber of Trade have official books of company ratified and give them to company officials upon the arrangement which entered into force in March 2018. After ratification of registry, employees of Chamber of Trade shall give ratified official books to your party. 

1. Ledger
2. Journal
3. Inventory Register
4. Board Of Directors Minutes Book
5. Shareholders' Stock Register
6. Stamp Tax Register

6. Preparation of Signatory Circulars for Joint Stock Companies

      After your application is ratified by Chamber of Trade, your company acquires a legal entity status and deemed to be established in offical terms. By means of company documents presented by Chamber of Trade, signatory circulars can be issued under the company title for authorized person(s). 

7. Submission of Business Commencement Declaration To Tax Office and Registration Transactions 

      After having the company registered by Chamber of Trade, documents listed below shall be submitted to respective Tax Office. 

• Notarized articles of association
• Notarized signatory circular of the company director
• Lease Contract (or photocopy of Title Deed)
• Certificate of Incorporation and trade registration certificate  
• Residence certificates of founder partners
• Original or certified copies of ID Cards of Partners
• Business Commencement Declaration 
• Tax office password request form
• Electronic notice form

      After submission of these documents to tax office, a tax officer will visit the company for control purposes, and issue an inspection report which shall be signed by the company official. 

8. Procedures Regarding Chamber of Industry and Vocational Chamber

       If joint stock company is established for engaging in industrial activities, then it shall be registered to Chamber of Industry.                                              

1.   Chamber of Industry Application Form
2.   Trade Registration Gazette
3.   Notarized articles of association
4.  Copies of ID Cards of Company Partners
5.  Residence certificates of Company Partners 

ESTABLISHMENT OF LIMITED COMPANY (LİMİTED ŞİRKET) AND ITS REGISTRATION TRANSACTIONS

1. Information and Documentation Required for the Establishment of a Limited (Liability) Company (so-called LIMITED ŞİRKET)

In the first place, documents and information listed below shall be provided; 

1. Residence certificates of partners
2. Head Shot Photos (3 Pieces)
3. Photocopies of ID Cards of Partners
4. Office Lease Contract
5. Title of Company to be Established (Scope shall be defined in Turkish)
6. Registered Address
7. Capital Amount of Company (may not be less than TL 10000 and the minimum number of partners is 1 whereas maximum number of partners is 50.) 
8. Shares/Rates of Capital
9. Company Representative or Director shall be identified

2. Preparation Of Articles Of Association

        Information listed below shall be included in Articles of Association of a Limited Company:

1. Trade title and registered address of Company.
2. Scope of Company, which should be basically identified and described. It is possible to write multiple scopes.
3. Nominal amount of registered capital, number of registered capital shares, privileges if any, groups of registered capital shares. Names, surnames, titles and nationalities of directors
4. Mode of company announcements.

  3.Tax Identity Number

       Potential tax number is issued by MERSIS System through articles of association uploaded to MERSIS system. This number shall be deemed as the valid tax number of company after establishment process.  

25% of capital may not be blocked in case of corporations. During the establishment process of a company, it is not required to open a bank account and deposit at least 25% of the capital into that account. Capital can be deposited into the account of company within 24 months after establishment.

4.Completion of Documents and Submission to Trade Registration Office

     After entering articles of association into MERSIS and completion of relevant ratification process, it is required to file an application to Chamber of Trade with documents listed below.  

1. Mersis - Printout of screenshot 
2. Power of Attorney for Company Establishment (If Founder Partners go to trade registration office, power of attorney will not be necessary.)
3. Chamber registration certificate (with photos of partners affixed)
4. 3 copies of Company Establishment Declaration Form (4 copies in case of foreign capital)
5. Founder Shareholders Information Form
6. Payment for Competition Board Share (to be paid through cashier's desk of Chamber of Trade). 

      After completion of such documents, they shall be submitted to respective Trade Registration Office, relevant fees shall be deposited during application with regard to this process. After ratification of application, registration letter, certificate of registration and certificate of activity shall be taken.

         Moreover, official books had been required to be notarized after establishment of company in accordance with the old system, whereas these books are now authenticated by Chambers of Commerce during establishment process, and afterwards they are submitted to the company official.

5.Preparation of Signatory Circular for Limited Company

       Following the completion of registration process in Trade Registration Office, the company is deemed to be established officially.

      Henceforth, company director who will represent the company may have his/her signatory circular prepared and confirmed in a notary public by affixing specimen signatures under the title of company. Signatory circular shall be required for all transactions to be carried out in the name of the company. 

6.Submission of Business Commencement Declaration to Tax Office and Registration Transactions 

       After registration of the company, an application shall be filed to the respective tax office including documents listed below. These transactions are carried out by Certified Public Accountants. 

• Business commencement declaration 
• Signatory circular of company
• Lease Contract (or photocopy of Title Deed)
• Original copies of letter of registration and certificate of registry
• Residence certificates of company partners
• Original or certified copies of ID Cards
• Notarized identity documents of company partners 

    Inspection and Registration; After completion of these processes, tax officers shall pay a visit to your office in order to control whether you really set up a business, and issue an inspection form. Inspection officers shall visit your office in 2-3 days after the application. On the following day, you can finalize the registration process in Registration Service of tax office upon submission of the inspection form that shall be presented to you by the inspection officer. Thereafter, you can download your tax chart over the Internet.

7. Transaction Regarding Chamber of Industry

        (If the relevant company engage in industrial activities, it is obligatory to have it registered in Chamber of Industry.)

       1- Chamber of Trade Application Form                                                    

       2- Trade Registration Gazette

       3- Signatory Circular of Director

       4- Notarized articles of association

       5- Copies of identity cards of company partners

       6- Residence certificates of company partners

Differences between Joint Stock Company and Limited Company

Though limited companies also fall into the category of corporations just as joint stock companies, they bear specific characteristics of their own. Differences between joint stock companies and limited companies can be specified as below (Bilgili, Demirkapı, ibid, p.297)

1. Both types of companies can be established by minimum one partner. Number of partners is not limited for joint stock companies under any circumstances, whereas the maximum number of partners is fixed as 50 (fifty) for limited companies.
2. Principal and registered capital systems are available for joint stock companies. On the other hand, principal capital system is the only alternative for limited companies. In joint stock companies, minimum capital is corresponding to TL 50.000 and TL 100.000 respectively for principal and registered capital systems.
3. Joint stock companies are entitled to go public by increasing their capital through internal and external sources, and mostly through external sources by means of capital commitment; whereas limited companies are not entitled to go public.
4. In joint stock companies, it is possible to issue (either registered or bearer) securities representing the shares; but in limited companies, even in case of a registered instrument issued for representing the partnership interest, this instrument may not be deemed as a security.
5. In joint stock companies, controlling interest principle is taken as basis for representation in general assemblies, whereas majority principle is taken in limited companies in terms of capital and number of partners.

6- In joint companies, the partner who fulfills his/her liability with regards to capital contribution, may not be held responsible for corporate debts, but on the other hand although this principle is basically valid for limited companies as well, a certain liability limited with capital share proportion may be applicable for partners in the final stage of public debts as an exemption.