Types of Companies in Turkey: Complete 2025 Guide

# Introduction to Types of Companies in Turkey

Turkey offers a dynamic and strategically located market that connects Europe and Asia. With its large population, modern infrastructure, and diverse economy, the country has become an attractive hub for both local entrepreneurs and international investors. But before anyone can dive into the Turkish business scene, understanding the different types of companies available is a must.

Every country has its own set of business entities, each tailored to meet various operational, legal, and tax-related needs. In Turkey, company types range from simple sole proprietorships to complex joint-stock corporations. Choosing the right type of company is not just a formality—it can impact your liabilities, tax obligations, access to investment, and even your potential for growth.

For someone new to the Turkish business environment, this can be overwhelming. But don’t worry. Whether you're starting a small local shop, launching a tech startup, or opening a subsidiary of a multinational corporation, this guide will break it down for you. We’ll walk through the essential company types in Turkey, highlight their pros and cons, and help you find the structure that best suits your business vision.

# Understanding the Legal Framework for Businesses in Turkey

To make sense of company types in Turkey, it’s essential to first understand the legal foundations that govern businesses. The Turkish Commercial Code (TCC), enacted in 2012, is the backbone of commercial law in the country. It aligns closely with European Union standards, aiming to enhance transparency, investor protection, and corporate governance.

One of the most important features of the TCC is its emphasis on corporate structure and accountability. Whether you're forming a small partnership or a major corporation, the TCC lays out the rules for how companies must be formed, managed, and dissolved. It also sets requirements for financial reporting, auditing, and shareholder rights.

The main regulatory authorities you’ll encounter include:

Ministry of Trade: Oversees company registration and trade regulations.

Turkish Tax Authority: Manages tax compliance and reporting.

Istanbul Chamber of Commerce or other local chambers: Facilitates local business registration and certifications.

Social Security Institution (SGK): Handles employee-related social contributions.

Understanding this framework helps you avoid legal pitfalls and ensures that your business is fully compliant from day one. While the process is well-defined, many foreign investors choose to work with local lawyers or consultants to navigate it smoothly.

# Sole Proprietorship (Şahıs Şirketi)

If you're thinking of starting a small business in Turkey, the sole proprietorship—known locally as Şahıs Şirketi—might be your simplest and most cost-effective option. This type of business is perfect for freelancers, artisans, or any solo entrepreneur looking for a fast and easy start.

A sole proprietorship in Turkey is owned and operated by one individual. There is no legal separation between the owner and the business, meaning you’re personally responsible for all debts and obligations. That might sound risky, but for low-capital, low-liability businesses, it's often more than sufficient.

Advantages:

Easy and fast setup: You can be up and running within a few days.

Low startup costs: No minimum capital requirement.

Simple tax reporting: Income is reported as personal income, not corporate profit.

Disadvantages:

Unlimited personal liability: You are personally responsible for business debts.

Limited growth potential: Hard to raise capital or attract investors.

Less credibility: Larger clients or partners may prefer dealing with incorporated entities.

The registration process is straightforward. You’ll need to register with the local Chamber of Commerce or Tradesmen’s Registry, depending on your activity type. Then, get a tax number and open a bank account. Finally, register with the Social Security Institution if you plan to hire employees.

For anyone looking to test the waters in the Turkish market or work as an independent professional, this setup offers the flexibility and simplicity you need.

# Limited Liability Company (Limited Şirket - Ltd. Şti.)

The Limited Liability Company—called Limited Şirket or Ltd. Şti. in Turkey—is the most common and practical business structure for small to medium-sized enterprises (SMEs). It’s especially popular among local entrepreneurs and foreign investors due to its flexibility, limited liability protection, and ease of formation.

An Ltd. Şti. can be established by a single person or up to 50 shareholders. This makes it a great choice for solo founders who want liability protection, as well as small teams pooling resources. The liability of each shareholder is limited to the amount of their capital contribution—so your personal assets are protected if the business runs into trouble.

Key Features:

Minimum capital: ₺10,000 (Turkish Lira), although more is often recommended.

Legal entity status: The company has its own legal identity, separate from the founders.

Share transfer: Share transfers must be notarized and registered, adding an extra layer of control.

Advantages:

Limited liability for owners

Easier access to loans and government support

Appealing to foreign investors

Disadvantages:

More paperwork than a sole proprietorship

Cannot issue public shares

Requires a more formal management structure

Setting up an Ltd. company involves drafting Articles of Association, notarizing documents, registering with the Trade Registry, and obtaining a tax number. The process generally takes about one to two weeks, depending on how quickly documents are prepared and approved.

Whether you're launching a tech startup or opening a retail store, an Ltd. Şti. offers a balanced mix of protection, control, and credibility.

# Joint Stock Company (Anonim Şirket - A.Ş.)

The Joint Stock Company, or Anonim Şirket (A.Ş.), is the go-to structure for large-scale enterprises and companies looking to go public. It’s a more complex and regulated form of incorporation, but it offers significant advantages in terms of capital raising, investor access, and business credibility.

Unlike Ltd. Şti., an A.Ş. can be listed on the stock exchange, making it ideal for companies with ambitious growth plans. It requires a minimum capital of ₺50,000 (or ₺100,000 for companies subject to special regulations like banking or insurance). Shareholders are liable only to the extent of their shares.

Key Characteristics:

Minimum one shareholder, no maximum limit.

Management by a board of directors: This can include non-shareholders.

More rigorous compliance: Including independent auditing and transparency requirements.

Benefits for Foreign Investors:

Ability to offer public shares.

Easier transfer of ownership through share sales.

Stronger brand perception and corporate legitimacy.

Challenges:

Higher setup and operational costs.

More complex reporting obligations.

Requires careful legal and financial oversight.

Founding an A.Ş. involves preparing detailed Articles of Association, registering with the Trade Registry, and appointing a board of directors. This structure is best for businesses aiming for scalability and external investment.

# Cooperative Company (Kooperatif)

If your goal is to build a business based on collective ownership and shared benefits, then a Cooperative Company or Kooperatif is your ideal structure. This type of entity is typically formed by individuals or legal entities coming together voluntarily to meet their common economic, social, and cultural needs through a jointly-owned and democratically-controlled enterprise.

Key Characteristics:

A minimum of seven members is required to form a cooperative.

Members can be individuals or legal entities.

Each member has one vote, regardless of the amount of capital contributed.

Profits are usually distributed based on the level of participation or usage rather than capital contribution.

Advantages:

Promotes democratic decision-making and equal ownership.

Encourages community-based economic activities.

Access to government grants and incentives in certain sectors (e.g., agriculture, housing).

Disadvantages:

Slower decision-making due to collective structure.

Limited ability to attract external investors.

Often constrained to specific sectors or purposes.

Cooperatives in Turkey are especially common in agriculture, housing, transportation, and retail sectors. The registration process includes submitting a founding agreement, registering with the Ministry of Trade, and meeting specific operational requirements depending on the cooperative type. Despite some bureaucratic procedures, cooperatives play a crucial role in local economies and social solidarity.

# Branch Office of a Foreign Company

A Branch Office allows a foreign company to operate in Turkey without forming a separate legal entity. This structure is ideal for multinational corporations that want to explore the Turkish market or manage local operations directly under the parent company's oversight.

Legal Status:

A branch is not a separate legal entity; it operates under the foreign company’s name and liability.

It must comply with Turkish commercial and tax regulations.

All liabilities and debts incurred by the branch are legally attributed to the parent company.

Setup Requirements:

Power of attorney appointing a branch manager in Turkey.

Official translation and notarization of the parent company’s articles of incorporation.

Registration with the Trade Registry and tax office.

Advantages:

Easier brand recognition as part of a global company.

Full control by the parent company.

No need for local shareholders or partners.

Disadvantages:

Parent company is fully liable for all branch obligations.

Limited access to Turkish incentives available to local companies.

May face restrictions in certain regulated industries.

Branch offices are common for companies in banking, insurance, logistics, and consultancy sectors. They provide flexibility without the complexity of forming a new company but do carry risks related to liability and local compliance.

# Liaison Office

A Liaison Office, or Representative Office, is a low-risk entry point into the Turkish market for foreign companies not yet ready for full-scale operations. It allows companies to establish a presence in Turkey for non-commercial activities such as market research, feasibility studies, and partnership exploration.

Key Features:

Cannot engage in commercial transactions (no invoicing or sales).

Must be funded entirely by the parent company abroad.

Must obtain permission from the Ministry of Trade before operating.

Permitted Activities:

Research and data collection.

Representation and communication on behalf of the parent company.

Coordination of business development activities.

Restrictions:

No direct revenue generation.

Duration of operation is typically granted for 3 years, with possible extensions.

Benefits:

Minimal startup cost and regulatory burden.

A strategic way to test the market before full investment.

Establishes brand presence and local networking.

Despite their limitations, liaison offices are popular among international corporations aiming to understand the Turkish market or support regional partners. Their non-commercial nature keeps them tax-exempt, but any deviation from their permitted scope can result in penalties or closure.

# Comparison of Company Types in Turkey

Choosing the right company type is a strategic decision that should be based on your business goals, size, capital availability, and risk appetite. Here’s a simple comparison table to help visualize the differences:

This comparison gives you a snapshot of what to expect from each structure. Still, it’s highly recommended to consult a local advisor to choose the best fit based on your specific industry and long-term plans.

# Company Registration Process in Turkey

Starting a business in Turkey involves a well-organized, step-by-step process. While the country offers a business-friendly environment, especially to foreign investors, navigating the legalities can still be tricky without proper guidance. Here’s a detailed look at how to register a company in Turkey:

Step-by-Step Guide:

Choose the Type of Company
Decide whether you’ll form an Ltd. Şti., A.Ş., or another structure based on your business goals.

Prepare Articles of Association (AoA)
Draft your company’s AoA and have it notarized. This document outlines your company’s purpose, structure, capital, and operational rules.

Reserve a Business Name
Make sure your company name is unique and not already registered. This can be checked online via the Trade Registry.

Set Up a Company Address
You’ll need a physical address in Turkey. Virtual offices are also accepted in certain cases.

Deposit Capital into a Bank Account
Open a temporary bank account and deposit the minimum capital required. A portion of this (e.g., 25%) must be paid during registration.

Register with the Trade Registry Office
Submit all required documents to the local Chamber of Commerce. These usually include:

Articles of Association

Signature declarations

Identification of founders and managers

Proof of capital deposit

Obtain a Tax Number
Once registered, your company will receive a tax identification number from the local tax office.

Register for Social Security (SGK)
If you plan to hire employees, register your company and staff with the Social Security Institution.

Obtain Additional Permits
Depending on your industry, you may need licenses from other government bodies (e.g., tourism, construction, health).

Estimated Timeframe and Cost

The entire process typically takes 7–14 business days, assuming no complications. Costs vary depending on legal fees, notary services, and capital deposits, but a basic Ltd. Şti. registration can start from ₺10,000 to ₺15,000 in total setup expenses.

While the registration process is fairly straightforward, it’s always wise to engage a local accountant or attorney to ensure every step is handled correctly. This avoids costly delays and ensures full compliance with Turkish laws.

# Taxation System and Financial Obligations

When starting a business in Turkey, understanding the local taxation system is just as important as choosing the right business structure. Turkey has a fairly modern tax regime that supports foreign investment but also requires strict compliance and documentation.

Types of Taxes in Turkey

Corporate Income Tax (CIT)

Applied to the net profits of companies.

As of now, the standard CIT rate is 25%, though this may change based on fiscal policy.

Value Added Tax (VAT - KDV)

Charged on goods and services.

Standard rate is 18%, with reduced rates (1% or 8%) on specific goods.

Withholding Tax

Applies to dividends, interest, and royalty payments to non-residents.

Rates vary based on Double Taxation Treaties.

Personal Income Tax

Sole proprietors are subject to this tax, with rates from 15% to 40% depending on income.

Stamp Duty

Applicable on legal documents, contracts, and agreements.

Social Security Contributions

Employers must contribute approximately 22.5% of gross salaries toward employee benefits.

Accounting and Reporting

Companies must maintain financial records according to Turkish Financial Reporting Standards (TFRS).

Annual audits are mandatory for A.Ş. and larger Ltd. Şti. businesses.

Financial statements must be submitted to the Tax Authority and Trade Registry.

Penalties and Non-Compliance

Delays or inaccuracies in tax filings can lead to hefty fines or even legal action.

Persistent violations can result in closure or blacklisting of the company.

To stay compliant, many businesses hire a certified accountant (Serbest Muhasebeci Mali Müşavir) to manage their books and submit reports. This is especially critical for foreign-owned businesses unfamiliar with local norms.

# Foreign Ownership Rules and Considerations

Turkey has made significant efforts in recent decades to attract foreign direct investment (FDI). Thanks to liberal economic policies and international agreements, foreign investors enjoy nearly the same rights as local entrepreneurs.

What Foreigners Can Do

Own 100% of a Turkish company (no local partner required).

Buy real estate for business purposes.

Hire local or foreign staff, following employment regulations.

Repatriate profits, subject to tax compliance.

Restrictions and Special Permissions

Some strategic industries like military, mining, and media may require special permits or have restrictions.

Purchasing land in military zones or coastal areas may be restricted.

Certain professional services (e.g., law, pharmacy) are reserved for Turkish nationals.

Incentives for Foreign Investors

Free zones with tax exemptions and customs privileges.

Investment incentives based on region and sector (e.g., tax credits, VAT exemptions).

Double Taxation Treaties with over 80 countries.

Practical Tips for Foreign Entrepreneurs

Always consult a local lawyer or investment consultant before buying property or launching a project.

Use a certified accountant to manage your taxes and avoid legal issues.

If you don't speak Turkish, consider hiring a bilingual assistant or partner to manage communications with authorities.

Turkey’s legal system supports foreign investment, but local know-how makes all the difference. With the right support, setting up a successful, legally compliant business is very achievable.

# Conclusion: Selecting the Right Company Structure in Turkey

So, what’s your next move? Once you know your business model, choosing the right structure can save you time, money, and headaches. And in Turkey’s thriving market, getting it right could be the first big step toward your future success. For any legal complexities, especially regarding property or commercial transactions, hiring a local expert can be a game changer. Consider consulting a specialist by reading this ultimate 2025 guide to hiring a real estate lawyer in Istanbul..

If you're starting small or working solo, a Sole Proprietorship may offer the simplicity and flexibility you need. For growing SMEs or startups seeking protection from personal liability, a Limited Liability Company (Ltd. Şti.) strikes the right balance. Large enterprises or businesses looking for scalability and investment might find the Joint Stock Company (A.Ş.) more suitable.

Niche models like Cooperatives, Commandite, and Collective Companies serve specific social, cultural, or partnership-based needs. Meanwhile, Branch Offices and Liaison Offices provide foreign entities with the opportunity to establish a local footprint without fully incorporating.

Turkey’s evolving legal framework, investor-friendly policies, and strategic location make it an appealing market for almost any kind of business. But make no mistake—success depends on due diligence. Consider working with local legal, tax, and business advisors to ensure you make an informed decision.

So, what’s your next move? Once you know your business model, choosing the right structure can save you time, money, and headaches. And in Turkey’s thriving market, getting it right could be the first big step toward your future success.

# FAQs

1. What is the most popular type of company in Turkey?
The Limited Liability Company (Ltd. Şti.) is the most common type due to its ease of formation, limited liability, and flexibility for small to medium-sized businesses.

2. Can a foreigner open a business in Turkey?
Yes, foreigners can fully own a business in Turkey without needing a Turkish partner, except in some regulated industries.

3. How long does it take to set up a company in Turkey?
Company formation typically takes 7–14 working days, depending on how quickly documents are prepared and submitted.

4. What are the main costs involved in company formation?
Costs include notary fees, Trade Registry fees, legal consultancy, tax office registration, and initial capital. Starting a basic Ltd. Şti. usually costs between ₺10,000–₺15,000.

5. Is it necessary to hire a local director?
No, it’s not mandatory. A company can be entirely foreign-owned and managed, though having a local representative can be helpful for communication and compliance.