Corporate & Commercial Law

Company Formation in Türkiye (LLC & JSC), Corporate Governance & Executive Work Permits (2026)

Everything foreign entrepreneurs and multinational corporations need to establish a company in Türkiye under Turkish Commercial Code No. 6102: LLC vs. JSC comparison, capital rules, tax structure, and director work permits.

Company Formation Corporate Law and Work Permits in Türkiye
Atty. Murat Can Koptay • • 12 min read

EXECUTIVE LEGAL SUMMARY (TL;DR)

  • Under Foreign Direct Investment Law No. 4875, foreign individuals and foreign legal entities enjoy equal treatment with domestic investors and may hold 100% of the shares in a Turkish Limited Liability Company (Ltd. Şti.) or Joint Stock Company (A.Ş.) without requiring a local Turkish partner.
  • As of 2024–2026, the minimum statutory share capital is 50,000 TRY for a Limited Liability Company (Ltd. Şti.) and 250,000 TRY for a Joint Stock Company (A.Ş.); however, to sponsor foreign work permits, the Ministry of Labor requires at least 500,000 TRY in paid-in capital.
  • In a Turkish LLC (Ltd. Şti.), shareholders remain personally liable for the company’s unpaid public debts (taxes and SGK social security premiums) strictly in proportion to their capital share, whereas in a JSC (A.Ş.), non-board shareholders have zero personal liability for public debts.
  • Full company incorporation via MERSİS and the Trade Registry can be completed within 3 to 5 business days via Power of Attorney without the foreign founder traveling to Türkiye.

1. 100% Foreign Ownership Under Turkish Foreign Direct Investment Law No. 4875

Türkiye offers one of the most liberal corporate regimes in the EMEA region. Under Foreign Direct Investment Law No. 4875, foreign investors are not required to obtain prior ministerial permission to incorporate a business, nor are they required to appoint a Turkish citizen as a shareholder or company director. A single foreign individual or a foreign parent corporation (based in the UK, USA, EU, GCC, or CIS) can establish a 100% wholly owned Turkish subsidiary.

Moreover, foreign investors are guaranteed unrestricted repatriation of net profits, dividends, liquidation proceeds, royalties, and management fees in any convertible foreign currency through Turkish commercial banks after corporate tax obligations are settled.

2. Strategic Corporate Structuring: Should You Form an LLC (Ltd. Şti.) or a JSC (A.Ş.)?

Under the Turkish Commercial Code (TTK No. 6102), over 95% of foreign businesses choose between a Limited Liability Company (Limited Şirket — Ltd. Şti.) and a Joint Stock Company (Anonim Şirket — A.Ş.). Selecting the wrong entity type can expose foreign shareholders to unexpected personal tax liability or costly exit procedures.

Why choose an A.Ş. (Joint Stock Company)? Institutional investors, joint ventures, and asset-protection structures strongly favor the A.Ş. Non-managing shareholders bear zero personal liability for corporate tax or SGK debts, share transfers require no notarization, and capital gains on registered share certificates held over 2 years enjoy 0% income tax.

Why choose an Ltd. Şti. (Limited Liability Company)? For a single foreign founder or family trading/consulting business managed directly by its sole shareholder, an Ltd. Şti. offers lower initial capital (50,000 TRY payable within 24 months) and streamlined corporate governance.

3. Step-by-Step Remote Incorporation via MERSİS & Power of Attorney

Koptay Law Firm incorporates your Turkish company in Ankara, Istanbul, Izmir, or Antalya within 3 to 5 business days without requiring your physical travel. First, we obtain Potential Tax IDs for foreign shareholders and draft bilingual Articles of Association in MERSİS.

Next, we execute Trade Registry registration, obtain the corporate Tax Plate (Vergi Levhası), activate Electronic Notification (UETS) and SGK registrations, and coordinate multi-currency corporate bank account setup (TRY, USD, EUR).

4. Executive Work Permits Under International Labor Force Law No. 6735

Holding shares or serving as a director in a Turkish company does not automatically grant the right to reside or work physically in Türkiye. Foreign company partners (LLC managers and JSC board members who are also shareholders) must obtain a Work Permit (Çalışma İzni) from the Ministry of Labor and Social Security, which simultaneously serves as a valid Turkish Residence Permit.

Under the updated October 2024 – 2026 Ministry of Labor Evaluation Criteria, a newly established company applying for a foreign shareholder work permit must have a minimum paid-in capital of 500,000 TRY, and the foreign applicant must hold at least a 20% capital share (not less than 500,000 TRY). While the 5-Turkish-employee quota is waived during the first 6 months of a new company’s first work permit, fulfilling the quota (or qualifying for the $100,000+ capital/export exemption) is required for work permit renewals.

Statutory Capital & Work Permit Eligibility Thresholds (2026)

Standard LLC Capital = Min. 50,000 TRY | Standard JSC Capital = Min. 250,000 TRY | Work Permit Eligible Company = Min. 500,000 TRY Paid-In Capital (and min. 20% share / 500,000 TRY for foreign partner)

To employ foreign personnel or obtain a shareholder work permit after the first 6 months, the company must either employ 5 Turkish citizens per foreigner or meet the high-capital/export exemption criteria.

Council of State — General Assembly of Tax Law Chambers (Danıştay Vergi Dava Daireleri Kurulu) — Principle Ruling on Personal Liability of LLC vs. JSC Shareholders for Corporate Tax Debts (Law No. 6183 Art. 35 & Repeated Art. 35)

While shareholders of a Limited Liability Company (Ltd. Şti.) are directly pursued pro-rata for uncollectible corporate tax debts under Law No. 6183 Art. 35, shareholders of a Joint Stock Company (A.Ş.) who do not hold legal representation authority on the Board of Directors bear zero personal liability beyond their subscribed share capital.

Limited Liability Company (Ltd. Şti.) vs. Joint Stock Company (A.Ş.) in Türkiye

Corporate FeatureLimited Liability Company (Ltd. Şti.)Joint Stock Company (A.Ş.)
Minimum Statutory Capital (2026)50,000 TRY (No upfront bank block before registration)250,000 TRY (25% must be blocked in bank prior to registration)
Shareholder Liability for Tax / SGK DebtsShareholders are liable in proportion to their capital shareNon-director shareholders have ZERO personal liability
Share Transfer ProcedureRequires Notarized Share Transfer Contract + General Assembly Resolution + Trade Registry RegistrationSimple endorsement of share certificates (No Notary or Trade Registry required)
Capital Gains Tax on Share SaleTaxed as value increase gain regardless of holding period0% Income Tax if registered share certificates are held for more than 2 years

REQUIRED DOCUMENTS & COMPLIANCE CHECKLIST

  1. Notarized & Apostilled Passport copy of each foreign individual shareholder and director
  2. For Foreign Corporate Shareholders: Apostilled Certificate of Good Standing, Trade Registry Extract & Board Resolution
  3. Apostilled Power of Attorney authorizing Koptay Law Firm to draft and sign the Articles of Association at the Trade Registry
  4. Registered Turkish Office Lease Agreement or Legal Virtual Office Contract (for tax inspection verification)
  5. 3 Biometric Photographs & Digital Signature Token (E-İmza) setup for MERSİS and Work Permit filings

FREQUENTLY ASKED LEGAL QUESTIONS (FAQ)

Do I need a Turkish citizen partner or Turkish resident director to open a company in Türkiye?

No. Both Limited Liability Companies (Ltd. Şti.) and Joint Stock Companies (A.Ş.) can be incorporated with 100% foreign shareholding and managed exclusively by foreign directors residing in Türkiye or abroad.

What is the standard corporate income tax and VAT rate in Türkiye in 2026?

The standard Corporate Income Tax (Kurumlar Vergisi) rate in Türkiye is 25% on net corporate profits (with a 5-point reduction to 20% for qualifying export revenues), and the standard Value Added Tax (KDV) rate is 20% (with 0% VAT on exported goods and qualifying international services).

Can I open a Turkish corporate bank account remotely via Power of Attorney?

Yes, several major Turkish banks allow our attorneys to initiate corporate account opening under a specific banking Power of Attorney, though some compliance departments require either a brief video KYC verification or a single signature visit by the company’s authorized signatory.

Related Turkish Law Guides