COMPANY FORMATION IN TURKEY
Turkey offers a natural gateway to three of the world’s largest and most dynamic markets: Europe, Asia and the Middle East.
No wonder its economy is booming, up 34% over the four years to 2005, and still growing more than 5% per annum.
Turkish company key features
The minimum share capital for a limited liability company is between 5,000 and 10,000 TL (US 3,200 – US6,400). However the recommended amount is 50,000 TL for non-Turkish Directors.
At least 25% of the authorized share capital must be paid up after the company is established.
Minimum of one shareholder required.
Minimum of one director required (may be either Turkish or Foreign)
For non-Turkish clients who need a Work Permit the minimum requirement will be a physical office, as you will have to employ local staff.
To apply for a work permit you should aim to employ at least 5 – 8 local Turkish staff.
A local Accountant must be appointed before company registration is complete. We can provide one.
Popular Turkish company applications
Turkish companies are best used for general trading purposes, especially for those aiming to enter the Middle East and Golf countries markets.
Turkish company taxation
CORPORATE INCOME TAX (CIT): The standard rate is 20%
INCOMING DIVIDENDS: 0% if Participation Exemption applies:
- the foreign company paying out dividends is a limited liability company;
- the Turkish company holds at least 10% of share capital for at least 12 months;
- the subsidiary company is subject to corporate income tax rate of at least 15% (for trading company) or 20% (for investment company);.
CAPITAL GAINS TAX (CGT) - Participation Exemption applies to 75% of Capital Gains, if the conditions are met.
ROYALTIES: 15% which can be reduced under a Tax Treaty.
DIVIDENDS: 15% which can be reduced under a Tax Treaty.
INTERESTS: 0% if the entity is a Financing Company. Companies that do not qualify as financing pay 10% withholding tax on paid out interest.
VALUE ADDED TAX (VAT). Standard rate for inland sales is 18%.
How to register a company in Turkey?
- Choose a structure, what is appropriate for your business. Need help? Contact us.
- To find out more, please contact us.