Starting a company in Turkey

This is just comments from my own experiences and others experiences may differ greatly.

Starting a company in Turkey is not easy or cheap, if you are used to the company procedure or self employment in the UK then don't expect similar procedures (or expenses) in Turkey.

Since 2005 it is possible for Foreigners to have a 100% ownership of a Turkish Limited company, before this you needed a Turkish partner who had to be the majority shareholder. You can now have a limited company with a minimum of 2 board members and can arrange the shareholdings as you wish.

As of 2008 you can also set up as a 100% foreign owned sole proprietor company. This is a very new regulation and more details will follow here when I get reliable information.

Procedure for starting a Turkish Limited Company :-

• You and your partner must first find a good accountant in the province you intend to start your company, take your passport, residence visa and lots of passport photos. After agreeing the company structure, setup fees and the monthly accountant fees  you must visit the Notary to have your passports officially translated and all the documents notarised.
• Your accountant will register the business with the local office of trade and industry and also the tax office
• As of 2007 you MUST, as a company owner, obtain the state bag-kur insurance, your accountant should be able to organise this for you. If you dont apply for the insurance and you are not caught beforehand, when you come to close the company you will have to pay all the back payments (and its not cheap) as well as fines for late payment. BUT this insurance does give you access to very cheap state healthcare and entitles you to a basic Turkish state pension.
  
• You are then a company owner. BUT you still may not be allowed to work, this just gives you the right to run, administer and manage a company! For certain business types you may still have to apply for a work permit, this is a very grey area so take advice from your accountant.

NOTE: If you ever want to close your company it will take at least 12 months during which time you are not entitled to conduct any business but still have to pay all taxes, insurance and accountant fees whilst it is being closed!

Costs of starting a business in Turkey :-

(this is just a rough guide to give you an idea as they change frequently, please check with your accountant for exact figures)

• Setup fees for a limited company - around 2500ytl (£1100)
• Accountant fees - Negotiable but should be around 200-300ytl per month (£80-£120)
• Basic tax payments - (based on zero profit, including all required taxes, KDV (vat equivalent) and stoppage (tax on office rental or the room in your home you do business from) - 150ytl per month (£60)
• Obligitary state insurance (Bag-Kur) - 200-400ytl per month (£80-180)

£1100 startup costs

£220 per month running costs

£2000 close down costs

Working illegally and running a company illegally is a risk that is up to you, punishments are severe and as in all countries the tax man doesn't like being cheated of the smallest amounts. As an illegal company you cannot issue official KDV reciepts which (like the UK) allow companies and individuals to claim back their taxes, if you cannot provide this some people (even foreigners who are clued up) can get very upset. All its takes is a disgruntled customer or competitor to shop you to the local tax police (Maliye) and you could have a knock at your door from the boys in blue with a ticket to your home country for you.

If your'e serious about living and working in Turkey then I would advise starting a company as eventually the law will catch up with you and the fines will be substansive and maybe even deportation will be imposed.

If you would like any more information or if I can help then please contact us.