You can do business, but not in all areas
A foreigner can start a business in Turkey from scratch or relocate it from his country – the republic grants equal rights to all investors. Of course, you must first issue a residence permit of the country.
The most common type of residence permit is the so-called tourist. It can be obtained by renting or buying an apartment in Turkey, but not in all areas of cities. Some locations of the country's authorities have closed for foreigners or introduced quotas for the number of citizens of other states living in them.
The second type of residence permit, unlike a tourist one, will make it possible to obtain Turkish citizenship in the future, but in order to apply for such a residence permit, it is necessary to purchase real estate above a certain price threshold (75,000 euros for large cities, 50,000 euros for small settlements).
It should be borne in mind that not all areas of business are available to foreigners in Turkey. If you are not a citizen of the republic, you do not have the right to provide the services of a lawyer, notary, pharmacist, veterinarian, guide. These types of activities are possible only after obtaining a passport and subject to retraining in local educational institutions. It should be noted that doctors and nurses were excluded from this list last year, they are now allowed to work in the country without a Turkish passport, but confirmation of the diploma will be required.
It is relatively easy to become a Turkish citizen (compared to other European countries) by investing in real estate from 400,000 euros or in mutual funds from 500,000 euros. Another way is to get a residence permit with the possibility of naturalization and, after 5 years of residence in the country, apply for citizenship.
Become an individual entrepreneur or open a legal entity?
The most common organizational and legal forms of companies in Turkey are LLC (Limited), JSC (Anonim) and sole proprietor (Gerçek Ki şi).
An individual entrepreneur becomes an individual, the authorized capital is not needed. However, it should be borne in mind that under Turkish law, in order to issue one work permit, at least for yourself, you will need to hire 5 Turkish employees.
Thus, if you were self-employed at home and ran your own small business, for example, baking pies or doing hairstyles, in Turkey you can legally have your own business only by opening a company and hiring at least 5 local employees. There are no other legal ways. It should also be noted that this kind of unofficial "part-time work" at home threatens deportation if someone informs the authorities.
The only indulgence on the part of the state can be considered that an individual entrepreneur has the right to work for six months without obtaining a work permit. During this time, a person usually understands whether his business is profitable and whether it is worth continuing to do it.
Individual entrepreneurs pay income tax on a progressive scale. With an income of up to 32,000 liras –15%, up to 880,000 liras – 32%, over 880,000 liras – 40%.
According to experts, due to the peculiarities of Turkish legislation, foreigners today rarely open sole proprietors. Those who would really like such a form of doing business cannot meet the condition of hiring at least 5 Turkish employees. And businessmen who establish larger companies prefer other organizational and legal forms, mainly limited liability companies and joint stock companies.
To register LLC and JSC require licenses (if the selected activities are licensed), the presence of an accountant and a lawyer in the staff. In addition, the authorized capital is needed.
The minimum amount of the authorized capital at the opening of LLC is 10,000 liras. These funds must be deposited within 2 years. The amount of the authorized capital for the registration of JSC is 50,000 liras, with 25% being paid in the first year, and the rest within two years.
By law, a foreigner can become the founder of a company in Turkey alone. But, as practice shows, the procedure for registering a legal entity is faster and easier if the entrepreneur has a partner who is a citizen of the country. The Turkish co-owner can have any share, even 1%, but at the same time he will have the right to sign.
A profit tax of 23% is provided for an LLC (if the income does not exceed 600,000 liras). If the income is above 600,000, the tax rate is 40%.
If the owner of the company plans to hire foreigners, then he should remember that in order to obtain one work permit for a visitor, it is necessary to hire 5 Turkish citizens.
Hiring foreigners in Turkey should, among other things, take into account that many specialties, for example, in the field of beauty, require retraining. So, the hairdresser must provide you with local "crusts", which indicate that the master has been trained in the host country and passed the exams. Otherwise, you do not have the right to employ a person, even if his professionalism does not cause you doubts.
Employment of a foreigner in Turkey is quite a difficult matter, since the government protects the interests, first of all, of the local population in order to prevent the growth of unemployment among citizens who already feel the consequences of the unfolding economic crisis in the country. The influx of people from abroad, mainly from the Middle East and Central Asia (more than 3.7 million migrants arrived from Syria alone), creates additional problems. Newcomers compete with indigenous people for jobs, which causes great dissatisfaction on the part of the latter.
Stages of starting a business in Turkey
First of all, it is necessary to determine the basic points: the type or types of activities of the future enterprise, the organizational and legal form corresponding to them and your goals, as well as to choose a unique name.
Experts who have been working in Turkey for a long time advise you to immediately contact an accountant who will advise you on the choice of an organizational and legal form, tell you about the requirements for the applicant from government agencies, upcoming expenses. The accountant can take over the interaction with the authorities, acting on the power of attorney issued by you. In the future, this specialist will perform standard functions: pay taxes, make payments to the pension fund and the social insurance fund.
If you do not know Turkish, then it is worth hiring a sworn translator who will help you during the entire period while you register the company.
Next, you should purchase or rent a business premises. The choice of a suitable option depends on the scale of the enterprise and financial capabilities. It should be borne in mind that the registration of a company at any address is not a formality, your organization will really have to be there.
The procedure for registering a company in the Republic of Turkey is quite simple, bureaucracy is minimized, and many stages take place in a digital format.
- Registration in the MERSIS electronic system of the company's charter and the founding agreement (all documents must be notarized).
- Obtaining a preliminary individual tax number.
- Payment of 0.04% of the authorized capital to the Antimonopoly Committee of the Central Bank of Turkey.
- Opening a deposit in a bank (for a joint-stock company - depositing 25% of the authorized capital on it).
- Registration at the Turkish Chamber of Commerce. Receipt of constituent documents: certificates of entry into the commercial register, certificates of the type of activity.
- Registration of the circular of signatures in the notary office within 15 days after entering into the register.
- Registration of a company with the tax inspectorate.
- Opening a current account. It is not necessary to have funds in the current account. You don't have to open an account for an individual entrepreneur.
Registration of a company in Turkey takes from several weeks to several months, depending on the type of activity. For example, approvals at the opening of a travel agency can take up to 3 months, and at the establishment of a company in the direction of "medical tourism" and up to six months.
The costs of self-registration of the company amount to about $ 2,000, plus payment for notary services andtranslator.
Thank you for your help in preparing the article by our experts:
Camille Chinar, Sales Manager Realtor Global
Ksenia Baldzhi, Executive Director Liga Real Estate
Anastasia Kezik, Marketing Director Alanya Property Sales
