Legal landscape of Turkey offers a variety of corporate structures to both domestic and foreign investors looking to establish a presence in the country. The Commercial Code of Turkey outlines several legal entities, each with its unique features and regulatory requirements.
In this article, we will delve into the different corporate structures available in Turkey and their key characteristics.
1. Joint Stock Companies (Anonim Şirket)
Joint stock companies are a popular choice for investors, both domestic and foreign. They are particularly favored due to their versatility and suitability for various business activities. Key features of joint stock companies include:
Number of Shareholders: A minimum of one shareholder is required, with no maximum limit.
Minimum Capital: The minimum required share capital is Turkish Lira 50,000, or Turkish Lira 100,000 for companies opting for the “authorized capital” regime.
Nominal Share Value: Each share must have a nominal value of Turkish Lira 0.01 or a multiple thereof.
Authorized Non-Issued Capital: Joint stock companies may have authorized non-issued capital.
Public Trading: They can be publicly traded.
Regulated Industries: Certain regulated sectors, such as banking, factoring, insurance, asset management, and independent auditing, mandate the use of joint stock companies.
Debt Instruments: Joint stock companies are permitted to issue debt instruments.
Shareholder Liability: Shareholders are not personally liable for the company’s public debt.
Share Transfers: Generally, there are no restrictions on share transfers, although shareholders may impose certain limitations through the Articles of Association.
2. Limited Companies (Limited Şirket)
Limited companies are another common choice for investors in Turkey, especially when a more straightforward corporate structures are preferred. Here are the main characteristics of limited companies:
Number of Shareholders: A minimum of one shareholder is required, with a maximum limit of 50.
Minimum Capital: The minimum required share capital is Turkish Lira 10,000.
Nominal Share Value: Each share must have a nominal value of Turkish Lira 25 or a multiple thereof.
Authorized Non-Issued Capital: Limited companies may not have authorized non-issued capital.
Public Trading: They cannot be publicly traded.
Regulated Industries: Some regulated industries do not permit limited companies.
Debt Instruments: Limited companies are not allowed to issue debt instruments.
Shareholder Liability: Shareholders may be held personally responsible for the company’s public debt.
Share Transfers: Share transfers require approval from the General Assembly and must be notarized and registered with the Trade Registry.
3. Other Corporate Structures
Besides joint stock companies and limited companies, Turkey also recognizes collective companies, commandite companies, and cooperative companies. Additionally, non-incorporated enterprises (adi ortaklık) exist under the Code of Obligations but lack legal personality.
4. Establishing Branches and Liaison Offices
Foreign companies can establish branches or liaison offices in Turkey, while Turkish companies may also establish branches. Branches are registered with the trade registry, do not have separate legal personality, and are closely tied to the head office’s activities. Liaison offices, on the other hand, cannot engage in commercial activities and are typically used for market research purposes. They require permits and are subject to strict oversight by relevant authorities.
5. Registration and Timeline
Companies and branch offices are registered with the trade registry in the city where they are located. The registration process typically takes only a few business days if all required documentation is in order. It’s worth noting that the specific documentation requirements can change over time, and any foreign-language documents must be appropriately certified and translated.
In conclusion, Turkey offers a range of corporate structures to accommodate the diverse needs of investors, whether they are domestic or foreign entities. Careful consideration of the unique features and regulatory implications of each structure is essential when making decisions about establishing a business presence in Turkey.