An Overview of Companies in Turkey

Licensing and establishing companies of all types in Turkey, obtaining all the licenses needed to legally start your business in Turkey, registering products and obtaining the international barcode for your products, and everything related to the legal aspects of companies and the commercial registry — this article is a reference in itself, giving you all the information you're looking for before starting your commercial or industrial business. There may be some differences depending on the city or municipality where the business is located, but overall the underlying principle is one and the same.

Q: What types of companies are there in Turkey?

A: There are many types of companies in Turkey; we'll mention the most common and widely used ones.

1. The sole proprietorship, or personal company — the simplest, easiest, and least costly and complex option, recommended for people running small businesses that don't need large numbers of employees or workers.

2. The limited liability company (Limited Şirket) — the second tier of companies, involving more employees than a sole proprietorship and typically covering multiple lines of business, such as import and export, manufacturing, etc. It involves multiple partners.

3. The joint-stock company (Anonim Şirket) — this is at the level of multinational, global companies, and can include an unlimited number of companies under it. It involves an unlimited number of shareholders rather than partners, and is the most complex and costly in terms of establishment and procedures.

There are other, more specialized types that don't need mentioning here due to low demand and limited use — they can effectively be grouped under one of the types already mentioned: sole proprietorship, limited liability, or joint-stock company.

The Sole Proprietorship (Personal Company) — Required Documents, Details, and Costs (Costs Are Approximate and May Vary)

The documents required to establish and begin official licensing in Turkey are, with Hallak Company, very simple: a rental contract for the premises, whether an office, shop, commercial store, warehouse, or a home if the company operates on a home-office basis. Note: a valid utility bill for the address must be provided, and its accuracy confirmed — correcting it later is costly and involves lengthy procedures. In addition: the foreign national's passport or the Turkish national ID for Turkish citizens, the Turkish residence permit (of whatever type), and the personal tax number. The license holder is required to appear in person at the notary's office to carry out the power of attorney for establishing the company — details that only Hallak Company explains and breaks down for you.

In brief, the license rests on three fundamentals, or three sections: the tax section, known as the tax plate; the commercial section, meaning the commercial registry or the trade/professional chamber the activity falls under; and the municipal section, or the municipal license, which is the final stage. The stages mentioned above proceed in the following order: first, the commercial registry or the professional chamber the activity falls under; followed by the tax section, or the procedures with the tax office to obtain the tax plate; after which the work residence permit or work permit is obtained (to find out the documents required to obtain a work residence permit or work permit, you can check the dedicated article on our website) to complete the municipal license. Once the above procedures are finished, you can begin your business without any problems whatsoever. Missing any of the above steps means the license is considered incomplete, exposing you to financial fines that are very high compared to the overall licensing cost — meaning a single violation can cost more than the license itself.

Costs range from $300 US dollars and can reach up to $900 US dollars, depending on the location, the rental value, the area, the type of activity, and the specific details of the company. Completion time ranges from three days to a month and a half, depending on the municipal district the company's location falls under.

In terms of costs and monthly expenses, these are divided as follows: financial advisor/accountant fees, starting from $40 US dollars and reaching more than $150, depending on the company's activity and the amount of work required from the advisor. Rental value tax, calculated at approximately 30% of the monthly rent, paid once every 3 months. Basic taxes, ranging between $10-30 US dollars monthly. VAT, which depends on the number and type of invoices issued monthly and has no fixed amount — it is the largest amount paid monthly. Social security, starting from $100 US dollars monthly and increasing depending on the salary designated for the employee; for the company owner, it is roughly fixed at around $100 monthly.

Notes Regarding the Sole Proprietorship:

1. If retail sale, or sale in installments/sections, is listed as part of the business, a special cash register device known as "Yazar Kasa" will be required to be purchased — the same device used for processing bank card payments. This is not required if sales are wholesale only.

2. A sole proprietorship has capital, and a commercial bank account can be opened in the company's name.

3. A note relevant to any type of company: the capital must cycle through the company's account at least once within the first two years of establishment.

4. Depositing the capital directly into the company's account is not required unless otherwise requested — this may be requested during the application for a residence or work permit, in which case only a quarter of the capital registered in the official documents needs to be deposited.

5. A fire extinguisher of a size appropriate to the licensed premises' area must be purchased. This may not be required if the premises already has a fire suppression system in place.

Can a Sole Proprietorship Be Closed?

Yes, this is possible, and the procedure is simple, taking only a few days: settling debts and an inspection of the company's premises confirming it has been closed.