Advantages of Having a Company in Turkey
We start this article by listing the advantages of having a company in Turkey:
- Obtaining Turkish residency for the CEO, spouse, and children (if employing Turkish personnel or having a commercial visa)
- Obtaining a work permit which leads to Turkish citizenship and a passport after 5 years (if creating employment and employing at least 5 Turkish personnel)
- Opening a bank account in Turkey and utilizing its benefits (Read the post on opening a bank account)
- Very low registration cost (around 1000 USD) compared to other countries
- Possibility of concluding international contracts by the company legally
- Legally starting your own business and trade
- Obtaining a business license from Turkey
- Insurance coverage for the company manager
- Possibility of establishing branches in European countries and benefiting from corporate bank accounts in Europe
- Very reasonable company maintenance costs
- Tax calculation based on the company’s net income
- No need for a physical office
- No need for a Turkish partner, you can register the company alone.
- Possibility of obtaining a permanent Turkish SIM card without residency
Disadvantages of Registering a Company in Turkey:
- Local Language: Some administrative matters and laws may be in Turkish, which can cause problems for individuals who do not know Turkish well.
- Tax Complexity: The tax system in Turkey can be complex and create difficulties for international companies.
- Market Competition: The business market in Turkey is highly competitive, and entering it can be challenging for new companies.
- Tax Prepayment: Some taxes may be required as prepayment, which can negatively affect the company’s budget.
- Import and Export Restrictions: Import and export restrictions and regulations may limit some commercial activities.
- Hiring Local Labor: For some companies, hiring local labor may be a restriction and complicate legal requirements.
- Political and Economic Changes: Changes in the country’s policies and economy can affect the course of business and cause instability.
- Residency Restrictions: Obtaining a work residency is only possible with the employment of at least 5 local workers, and this is not possible merely by registering a company.
- Monthly Costs: Registering a company in Turkey includes monthly costs such as accountant fees and minimum tax payments, which can impact the company’s budget.
Apart from these cases, there may be other issues that should be carefully examined. However, the advantages of registering a company in Turkey are still much more than its disadvantages.
Opening a Corporate Bank Account in Turkey for Iranians
Currently, due to US sanctions and Iran’s listing in the FATF list, there are difficulties in opening bank accounts in Turkey. After registering a company, applicants visiting branches of Turkish banks may receive a negative response because opening an account for Iranian companies may be prohibited, due to US sanctions and decisions issued to Turkish banks. Ziraat Bank, VakıfBank, and QNB Bank have made it possible to open corporate accounts for customers. These banks allow you to carry out your company’s commercial transactions and purchases with Swift transfer documents and invoices. Opening a corporate account at VakıfBank is also possible without requiring Turkish residency and only with a passport. In addition, the corporate account at VakıfBank has online banking and mobile banking, which allows you to easily control your account from Iran. Also, receiving heavy transfers is possible within the framework of Turkish banking laws and regulations.
Registering a Company in Turkish Free Zones
Iranians can also establish companies in Turkish Free Zones, with the difference that the company’s subject must be one of the following:
- – Production
- – Buying or Selling
- – Warehousing
- – Assembly and Disassembly of Parts
- – Repair or Maintenance
- – Banking and Insurance Registration
Registering a company in a Turkish Free Zone requires completing administrative procedures, a minimum capital of 2 million Turkish Lira or more, submitting a business plan, and getting it approved. Also, a higher registration fee compared to other areas is another difference in registering a company in Free Zones.
However, registering a company in Free Zones in Turkey also has advantages, the most important of which are:
Tax Exemption: The Turkish government has exempted companies registered in Free Zones from paying taxes. These companies, if they are not production companies and only engage in import and export activities, will be exempt from value-added tax and customs duties. However, approval of the business plan by the Free Zone management is mandatory.
Transfer of Liquidity and Capital: Registering a company in Free Zones allows for easy and hassle-free transfer of liquidity and earned income to any country other than Turkey, without needing a permit.
Infrastructure: Other advantages of registering a company in Free Zones include the existing infrastructure that provides manufacturers and traders with the necessary facilities. Also, being located in major ports facilitates sea transportation.
Possibility of Long-term Presence: One of the biggest advantages of registering a company in Free Zones is the possibility of long-term presence on Turkish soil. Ready-to-use units are leased for 10 years for commercial activities and 20 years for production activities.
The Law on Foreign Direct Investment in Turkey is organized in 7 articles and has an executive regulation. The regulation of this law itself includes 4 sections and 13 articles, and in the third article of this law, the principles of foreign direct investment in Turkey are listed and fully explained as follows:
1- Freedom of Investment and Domestic Transactions in Turkey: Foreign investors are free to invest directly in Turkey or conduct transactions with domestic Turkish investors.
2- Expropriation and Confiscation of Assets: The assets of foreign investors will not be expropriated or confiscated except for public purposes and interests, in which case damages will be compensated according to legal procedures.
3- Repatriation of Capital: Foreign investors will be completely free and legally allowed to transfer their capital out of Turkey.
4- Ownership of Immovable Property in Turkey: Foreign investors will not have restrictions or impediments to owning immovable property in Turkey and can do so with ease.
5- Dispute Resolution in Investment Law: If any dispute arises during the investment process, the foreign investor can refer to the courts and official authorities of Turkey.
6- Valuation of Non-Cash Capital: The non-cash capital of foreign investors is valued according to the Turkish Commercial Code.
7- Employment of Foreign Personnel: Foreign companies subject to this law can employ foreign nationals who have a work and activity permit from the Ministry of Labor and Social Security.
8- Opening Representative Offices: Foreign companies are legally allowed to open their representative offices in accordance with the law.
Privileges of Registering a Company in Turkish Free Zones
Privileges for companies that will engage in production activities in Turkish Free Zones:
Exemption from Export Income Tax: Companies are exempt from paying income tax on profits from exporting their produced goods.
Exemption from Value-Added Tax and Customs Duty: Companies will be exempt from paying value-added tax and customs duties for goods and raw materials imported into Free Zones from other countries.
Exemption for Non-Production Companies: Companies that do not engage in production activities and only engage in export or transit trade are exempt from value-added tax and customs duties. For example, if goods are imported into Free Zones from Europe or any other country and then exported to a third country, the relevant customs duties will not be paid and will be fully exempt.
Activity License in Turkish Free Zones
For companies residing in Turkish Free Zones, the activity license is as follows:
1. License Duration: Companies that do not have production activities are granted a 10-year license, and companies that have production activities are granted a 15-year license.
2. International Trade Regulations: Any trade (buying and selling, import and export) between companies located in Free Zones and companies within Turkey is subject to international trade regulations. These regulations include import and export laws, and there is no time limit for storing goods imported into the Free Zone.
Desirable Activities in Free Zones:
1. Trading Companies: which import raw materials, spare parts, and products and export their produced or assembled products to third countries.
2. Export Companies: which re-export goods.
Establishing a New Company or Branch:
Companies whose headquarters are in Turkey must establish a branch in Free Zones. The accounting offices of the branch must be separate from the central accounting offices of the company. Companies cannot register commercial activities related to the central branch in the Free Zone branch offices.
The Free Trade Zones in Turkey are as follows:
1. Adana Free Zone: Yumurtalık Adana-Yumurtalık Free Zone
2. Aegean Free Zone: Aegean Free Zone
3. Antalya Free Zone: Avrupa Antalya Free Zone, Avrupa Free Zone
4. Bursa Free Zone: Bursa Free Zone
5. Denizli Free Zone: Denizli Free Zone
6. East Anatolian Free Zone: East Anatolian Free Zone
7. European Free Zone: European Free Zone
8. Gaziantep Free Zone: Gaziantep Free Zone
9. Istanbul Atatürk Airport Free Zone: İstanbul Atatürk Airport Free Zone
10. Istanbul Stock Exchange Free Zone: Istanbul Stock Exchange Free Zone
11. Istanbul Thrace Free Zone: İstanbul Thrace Free Zone
12. İzmir Menemen Leather Free Zone: İzmir Menemen Leather Free Zone
13. Kayseri Free Zone: Kayseri Free Zone
14. Kocaeli Free Zone: Kocaeli Free Zone
15. Mardin Free Zone: Mardin Free Zone
16. Mersin Free Zone: Mersin Free Zone
17. Rize Free Zone: Rize Free Zone
18. Samsun Free Zone: Samsun Free Zone
19. Trabzon Free Zone: Trabzon Free Zone
20. TUBITAK Marmara Research Ctr Tech FZ: Tübitak Marmara Research Ctr Tech FZ
Final Word:
In summary of the article, the most important points required for obtaining Turkish residency by registering a company were mentioned. To start your business without problems in this country, it is recommended to utilize the consulting services of Atlloo company. The consultants of this company will examine your situation and provide you with the best options.
