Investing and Doing Business in Turkey

 

We provide a full range of legal services supporting your investment projects and business operations in Turkey. So when you are considering investing or setting up a business, we can help.

 

The Country’s investment friendly profile 
 

Investing in Turkey has become appealing and profitable for foreign investors due to a constantly improving foreign investment climate by way of various government backed policies, including

 

Tax and non-tax incentives

Most competitive 20% corporate income tax rate in the OECD

Double taxation treaties with more than 70 countries

Generally applied 18% VAT rate   with some products/services falling under 1% and 8% rates

Customs Union with the EU and Free Trade Agreements with 16 countries

Bilateral investment treaties with 82 countries, including Russia, Ukraine, Uzbekistan, Kazakhstan etc. 

 

Many Tax and non-tax incentives for foreign investors

 

Tax incentives: customs, VAT and corporate income tax (total or partial) exemptions depending on the region, zone and industry of operation,

Non-tax incentives: allocation of free land and subsidies for energy in certain priority regions; help for R&D and market research; up to 80% grant on social security payments of the employer.

 

Turkey has invested a lot of time and money to attract Foreign Direct Investment and have implemented many business initiatives to create a welcoming environment for inward industrial investment, including “Organized Industrial Zones” and

“Free Trade Zones” throughout the country  

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Simple Ways to establish your business in Turkey

 

 Local Turkish Subsidiary:

Foreign companies may choose to set up 100%-owned subsidiaries in Turkey either in the form of a joint stock company (AS) or a limited liability company (Ltd Sti). Such subsidiaries are treated in the same way as the resident companies.

Subsidiaries may be in the form of a joint venture with a Turkish or international partner. There is no requirement for a local shareholding or directorship for establishing a subsidiary.

 Branch Office:

Foreign companies can establish a branch in Turkey. The parent company is required to allocate capital to the branch office at the establishment phase, although there is no minimum capital amount required. Branches are established according to the provisions of the Turkish Commercial Code with the approval from the Ministry of Industry and Trade.

 Representative office:

Representative offices of foreign companies are not permitted to perform any commercial activity in Turkey. Their activities are limited to representation of a foreign company in Turkey and providing information. Expenses of the representative office must be financed by the head office abroad.

The representative office may not generate any income from its activities in Turkey, just as it is not itself subject to corporate income tax or personal income tax. However, it should maintain statutory books and provide any necessary information to the authorities when required.

Employees of a representative office are not subject to income tax either, provided that their salaries are paid from abroad in foreign currency.

 

 

 

 

Residence and Work formalities

 

Most foreigners may enter Turkey by obtaining a visa online and can stay in the country up to 90 days within any "180 day period".

For a foreign individual wishing  to carry out business activity in Turkey it is required to have a work permit from the Ministry of Social Security and Labour Affairs together with a work visa from the Turkish consulate in the originating country. To obtain a work permit whilst in Turkey, a minimum of 6 months residence permit is required for the application otherwise it may be obtained from the Turkish consulate in the originating country before entering Turkey, a work permit shall be counted as a residence visa for its granted term in this case.

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Turkish Citizenship for Foreign Investors 

 

Turkish citizenship has been eased for foreign investors with the amendments made to Turkey’s current citizenship law. The new regulations were updated and reduced in 2018.

 

As an investor in business within Turkey, the new criteria offers a major benefit for foreigners who open a business in Turkey. 

Those who meet any of the following conditions would be eligible to acquire citizenship under the new regulations.

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• Proven by the Ministry of Economy to have made a minimum of USD 500,000 of fixed capital investment

• Proven by the Ministry of Environment and Urbanization to have acquired an immovable property worth a minimum of USD 250,000 with a title deed restriction of not to sell for at least three years

• Proven by the Ministry of Labor and Social Security to have created jobs for at least 100 people

• Proven by the Banking Regulation and Supervision Agency to have deposited at least USD 500,000 in banks operating in Turkey with the condition of not to withdraw for at least three years

• Proven by the Turkish Treasury to have bought at least USD 500,000 worth of government bonds and provided they are not sold over the course of three years

 

The effective selling rate of the Central Bank of the Republic of Turkey as of the proving date will be used as a benchmark to determine the actual values of operations.

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Too discuss citizenship and your intended business investment, please contact one of our International Legal Teams for further information and assistance.

 

Arbitration Awards in Turkey

 

Turkey is a party to the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958. Arbitral awards granted in the territory of a foreign country, a party to the New York Convention, will be enforceable in Turkey following specific procedures with the Turkish local courts.

 

 

The KILIC & Partners law firm Istanbul success, derives from our ability to provide 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