Business and Company Formation in Turkey

Business and Company Formation 

There are two types of companies in Turkey that are the preferred choice of investors; Joint Stock Companies (“JSC”) and Limited Liability Companies (“LTD”). According to Turkish Commercial Code numbered 6102, thier are a number of differences between the two entiies and both types of companies have advantages and disadvantages. The main determining factors to considered before choosing which type of company or subsiduary to form, would  be dependent on the industry sector and purpose of the company in Turkey.

Certain types and classification of business activities such as Banking, Finance, Telecommunications, Health, pharmaceuticals and others which may have different capital and shareholding requirements.

The main differences between the two comany types are as follows:

• The minimum capital required for LTD is 10,000 TL as opposed to 50,000 TL required for JSC. In addition, JSC can adopt registered capital system where capital can be increased up to 100,000 TL.

• LTD may have maximum 50 shareholders, while there is not any maximum or minimum shareholders number required for JSC.

• Only JSC can be listed with stock exchanges.

• In JSC the shareholders are only liable against the company, for the shares they subscribe for. However, in the Articles of Association of LTD, shareholders may be required to pay additional payments in addition to their shares. Also the shareholders of LTD are liable for the public debts of the company (such as taxes,social security premiums,fines and charges) if the debt cannot be collected from the company. In JSC, the shareholders are not liable for the public debts of the company.

• Share transfers are more easier in JSC than LTD. In order to transfer the shares in LTD there must be approval of the General Assembly and formal written and notarized contract executed between the transferor and the transferee. In JSC shares may be transferred with contract without notarization, unless otherwise stipulated in the Articles of Association.

• In order to amend on the Articles of Association mandatory quorum in JSC is the half of the representatives of the original capital while in LTD it is two thirds.

• JSC can issue bearer share certificates for the shares which have been paid. LTD shall not.

• JSC has board constituted of directors, the board of LTD is constituted of managers.

• In LTD shareholders may file a lawsuit for a shareholder to be expelled from the Company while in JSC shareholders cannot be expelled by court order.

• JSC with the capital of 250.000 TL and above must have a consulting agreement with an attorney.

Specialist advice should be taken on other issues before setting up a company, such as employment Law, property ownership, asset security and risk in addition to competition issues, due diligence and contracts should be considered when entering the Turkish market. please contact our team directly.

Our ability to provide the right advice in the right circumstance, has made the first choice legal partner for companies wishing to set up business in Turkey. We offer a full range of legal services, including risk analysis and management to foreign companies and individuals who are willing to invest and establish themselves in the Turkish market and expand their business operations. Our Clients benefit from our timely legal services and business oriented solutions of high quality, irrespective of your location and area of business activity.

How we can Help 

• Advising on Investment Incentive Regime and most suitable forms of doing business in Turkey

• Assisting in setting up your company/subsidiary/representative office in Turkey

• Advising on corporate reorganization, including mergers, acquisitions and joint ventures

• Counselling on tax issues, including VAT, corporate taxation and amnesty from tax

• Dealing with state regulatory authorities in obtaining various permits, licences and authorizations, including M&A clearances from the Turkish Competition Authority

• Representing in International arbitration and dispute resolution procedures

• Market research, assessment and analysis

• Developing market penetration strategy and finding business partners/new investment opportunities in Turkey

What makes us stand Out

• Istanbul based with reliable partnerships in EU, Brazil, Russia and other CIS countries

• Global approach and local solutions

• Team of reputable lawyers and international legal counsels, who are also academicians, with various backgrounds, linguistic skills and expertise

• Awareness of legal rules and national peculiarities of doing business in multiple jurisdictions, including CIS, EU and Latin America

• Representation of clients in Dutch, English, French, German, Italian, Kazakh, Portuguese, Russian, Spanish, Turkish and Ukrainian

• Flexible, simple and creative approach to every client

For more Information about Doing Business in Turkey, please consult a member of our International Legal Teams