How To Start A Business In Turkey

Turkey is a truly fascinating country due to its European and Asian influences. Many visit its iconic capital, Istanbul, to see the Blue Mosque and Grand Bazaar. Beyond the capital, Antalya boasts a stunningly turquoise coastline while you’ll find fairy chimneys in Cappadocia.

Aside from its colourful markets and Turkish tea, Turkey has become more than just a tourist destination. It’s also become a hotspot for entrepreneurs and startups. So if you may be wondering how to start a business there yourself, read on.

 

Why Is Turkey A Good Place To Start A Business?

 

There are a couple of reasons that stand out straight away when you look at the pro’s of starting a business in Turkey.

Its location between Europe, Asia and the Middle East gives it an immediate advantage over other locations for trade and exporting. Even if you aren’t ready for international trade from the start, its own population of 85 million people offers a large and diverse consumer market.

The Turkish government is also heavily involved in supporting startups from free zones to tax exemptions. These all encourage the growth of new businesses in the country.

Meanwhile, cities like Istanbul and Izmir welcome startups through accelerators and incubators in addition to co-working spaces.

 

Industries With High-Growth Potential In Turkey

 

When looking at a foreign location for starting a business, finding the right industry can make all the difference to get your business off the ground. Some sectors have proven to be especially promising in Turkey so let’s take a closer look at them.

Technology: The country has seen a surge in startups who are innovating across e-commerce, SaaS and fintech with no signs of slowing down in the future.

Textiles and clothing: Turkey has a long history of producing clothes and fabric especially for export to other countries.

Tourism: Turkey is a tourist hotspot, attracting millions of visitors every year to experience its culture and breathtaking landscapes. As a result, there are always opportunities for tourist experiences, restaurants and accommodation.

Agriculture: Known as one of the most productive agricultural countries in Europe, this sector is incredibly strong and new innovations continue to emerge.

 

Understanding Turkey’s Tax Regulations

 

The corporate income tax in Turkey as of 2024 is 25% although there are some designated free zones and tax exemptions for new businesses.

The country’s Value Added Tax (VAT) is 20% although this is reduced to 10% and even 1% on certain items.

If you plan on hiring local employees for your business, you can expect to pay about 22.5% of their salaries towards their social security contributions.

 

 

Visa And Residency Requirements For Foreign Entrepreneurs

 

Before you proceed with setting up a business in Turkey, you will need to find the right visa applicable to you. Let’s take a look at some of the available options.

Short-Term Business Visa: This is valid for up to 90 days and ideal for those who are entering the country to scope it out or have meetings.

Residence Permit: This is required should you want to exceed the 90 day period or plan to live and work in Turkey.

Turkish Citizenship: Those who invest $500,000 whether in capital or property can apply for Turkish citizenship as long as they meet the specific requirements.

 

The Process For Setting Up A Business

 

If Turkey sounds like the right location for the business that you have in mind, here is a step-by-step guide on how to legally get started.

 

Select A Business Structure

 

This is also referred to as a legal entity. In Turkey, there are three options that are commonly used for foreigners looking to start a business.

Limited Liability Company: This requires one or more shareholder with a minimum capital amount of 10,000 TRY.

Joint Stock Company: This structure is ideal for bigger businesses with a minimum amount of 50,000 TRY.

Branch Office: Applicable to a branch of an existing foreign company opening in Turkey.

 

Reserve A Name

 

Once you have decided on a name for your business, you can check that it is available and reserve it. Keep in mind that the name you choose should comply with Turkish commercial law.

 

Prepare All Necessary Documentation

 

For this step, you will be required to submit your Articles of Association, proof of address, signature declarations and copies of the passports of all shareholders and directors if applicable.

 

Deposit The Capital Amount

 

A minimum of 25% of your total capital amount is required to be deposited into a Turkish bank account before you proceed with the registration. After that, you have 24 months to pay the remaining 75%.

 

Register The Company

 

All documentation can be submitted to the Central Registration System, known as MERSIS. You will then be able to register with the Trade Registry Office, Tax Office and Social Security Institution if you are hiring Turkish employees.

 

Tips For Foreigners Starting A Business In Turkey

 

Turkey certainly has a promising environment for entrepreneurs and startups, offering plenty of support and opportunities across numerous sectors.

Keep in mind that Turkish laws tend to change quite frequently so it’s always recommended to work with a local business consultant who can advise you of changes.

Relationships are also highly valued in Turkish business and personal connections can go a long way so building a strong network of support from the get-go can help you in the long run.

Best of luck for your venture!