Starting a Business in Turkey as a Foreign Investor
Turkey has one of the most open economies for foreign investment in the region. Under the Foreign Direct Investment Law No. 4875, foreign investors are granted equal rights with domestic investors. Companies can be established and investments made without any prior permission or screening, making Turkey an attractive destination for international entrepreneurs. Turkey has signed double taxation avoidance agreements with over 80 countries, providing significant advantages for investors engaged in international trade.
Key Advantages for Foreign Investors
- Equal treatment with domestic investors guaranteed by law
- Free transfer of profits and capital without restrictions
- Protection against expropriation and nationalization
- Access to international arbitration for dispute resolution
- Ability to establish 100% foreign-owned companies
- Tax advantages under double taxation avoidance agreements
Required Documents and Process
1. Obtaining a Tax Number: Foreign nationals can obtain a potential tax number from the tax office or through the e-devlet (e-government) portal. This is required to open a bank account and establish a company. A passport copy and a Turkish address are sufficient.
2. Company Formation: Application is submitted through the MERSIS system. Both Ltd. Sti. and A.S. structures are available. Foreign partners require apostilled passport translations and notarized signature declarations. Corporate partners also need apostilled certificates of incorporation and authorization documents.
3. Residence Permit: A short-term residence permit application can be filed alongside company formation. For work residence permits, an application to the Ministry of Labor and Social Security is required. A company can be established without a residence permit, but one is required to physically reside in Turkey.
4. Work Permit: Foreign partners who wish to work in the company must obtain a work permit. The company is expected to meet minimum capital and employment requirements. The general rule requires employing 5 Turkish nationals per foreign worker, though exceptions exist for company partners.
Investment Incentives
- General Incentive: KDV exemption and customs duty exemption for qualifying investments. Available across all sectors and regions
- Regional Incentive: Tax reductions, employer social security contribution support, interest rate support (varies by region and priority level). Eastern and Southeastern Anatolia offer the highest support rates
- Strategic Investment: Comprehensive support packages for large-scale projects of national importance. Priority given to investments reducing import dependency
- Teknoloji Gelistirme Bolgeleri: Corporate tax exemption, income tax withholding support for R&D employees in certified technoparks. Ideal environment for software and technology ventures
- KOSGEB Support: Foreign-partnered SMEs can also benefit from KOSGEB entrepreneurship and innovation grants
Important Considerations
Some sectors such as media, energy and mining may have restrictions on foreign ownership percentages. Real estate purchases are subject to reciprocity principles. Under KVKK, transferring customer data outside Turkey may require additional permissions. Professional legal and financial advisory is critical for a smooth process, particularly when navigating residence and work permit requirements alongside company formation.
Zunapro supports foreign investors with every aspect of establishing a business in Turkey, from company formation through to full operational readiness.