Limited Liability Company In Turkey

Limited Liability Company in Turkey: Setup & Regulations

A Limited Liability Company (LLC) in Turkey, known as "Limited Şirket" (Ltd. Şti.), is a popular business structure for both local and foreign entrepreneurs due to its flexibility, limited liability, and straightforward establishment & liquidation process.

In this article you are going to find an in-depth look at the essential aspects of forming and operating an LLC in Turkey.

Key Features of Limited Liability Company in Turkey

• Limited Liability: Shareholders are only liable for the company's debts to the extent of their share capital. (Excluding public debts)This provides a significant level of financial protection.
• Minimum Share Capital: TThe minimum share capital required to establish an LLC is 50,000 Turkish Liras (TRY). This amount must be paid off by shareholders to the bank account of the company within 24 months.
• Shareholders: An LLC can be established by at least one and up to fifty shareholders. These shareholders can be individuals or legal entities.100% ownership is avaliable for foreigners.
• Management: At least one of shareholders has to be a Manager. Other directors can be from shareholders or non-shareholders.It may be arranged on the articles of incorporation that directors can use their signature individually or common during representing the company.
• Name Requirements: The company name must include "Limited Şirket" to denote its limited liability status. The name should also be unique and not resemble existing company names in Turkey.
  
  

Steps to Establish an LLC in Turkey

• Draft the Articles of Association: This document outlines the company's purpose, capital, management structure, and operational rules. It must be prepared as online on MERSIS system before submission.
• Deposit the Minimum Share Capital: The undertaken equity must be paid off within 24 months by shareholders to the bank account of company. Full or part of the initial share capital may be deposited into a bank account opened in the name of the company, under formation at the establishing time of company, optionally.
• Register with the Trade Registry: The articles of association, registration form, ID, Tax ID & contact info of shareholders proof of share capital deposit, and other required documents must be submitted to the local Trade Registry Office.
• Tax Registration & Getting a Tax Identification Number: The company must register with the local tax office to obtain a tax identification number.VAT, Withholding(WHT) Tax, Provisional Tax and Corporate Income Tax(CIT) registrations must be made with this number. identification number.
• Registry of e-notification: E-notification registration for tax office must be made within 15 days immediately after tax registration. Otherwise, administrative fines will be imposed.
• Social Security Registration: The company must register with the Social Security Institution (SGK) to ensure compliance with employment and social security regulations.This is usually done automatically with registration of the company, but it is still useful to confirm it.
• Publication: The establishment of the company must be announced in the Turkish Trade Registry Gazette.You can confirm this with the Registry Gazette that the registry office will deliver to you after registration has done. Additionally, a registration certificate will be issued for your company as duly.

Advantages of an LLC in Turkey

• Flexibility in Management: An LLC provides flexibility in structuring the management and operation of the company, making it suitable for small and medium-sized enterprises.
• Ease of Establishment: The process of setting up an LLC in Turkey is relatively straightforward, with a well-defined legal framework. No cash capital is required for establishment.
• Tax Benefits: Turkey offers various tax incentives and benefits for companies, including reduced corporate tax rates for specific sectors and regions.
• Social Security Premium Suports: Turkey offers various social security premium incentives and benefits for companies, specific sectors such as IT and regions such as Technopark.Additionally, employers who do not have premium debt receive an indefinite and unconditional 5% premium support.
• Foreign Investment Friendly: There are no restrictions on foreign ownership of an LLC in Turkey, making it an attractive option for international investors.

Compliance and Reporting Requirements in Turkey

• Applying for Business Licenses If your company in Turkey intends to engage in regulated activities such as health or education, it is mandatory to complete the business licensing phase. This process involves obtaining specific business licenses and permits from the relevant authorities overseeing your industry.
• Setting Up the Accounting System: In Turkey, Companies must record their financial transactions completely and accurately in accordance with the Turkish Tax System and Generally Accepted Accounting Practices. These records must be archived and made available upon request, making an effective accounting system indispensable.
• Financial Reporting: Companies must prepare and submit annual financial statements in accordance with Turkish accounting standards.
• Tax Filings: Regularly, tax filings, including corporate tax, VAT, and social security contributions, must be made to the relevant authorities.It is inevitable for you to hire an Turkish Accountant for this.
• Annual General Meeting (AGM): LLCs are required to hold an annual general meeting to review financial statements and make key business decisions.These meetings, which can be either ordinary or extraordinary, are crucial for taking necessary measures and making updates to achieve sustainable profit, the natural goal of companies. If it is determined that achieving this goal is impossible, liquidation of the company becomes inevitable.

Establish your LLC in Turkey Through A&M Consulting Co.

Establishing a Limited Liability Company in Turkey offers numerous advantages for both local and foreign investors. With its limited liability protection, flexible management structure, and straightforward registration process, an LLC is an ideal choice for those looking to start or expand their business in Turkey.

By understanding the key features, steps to establish, and compliance requirements, entrepreneurs can effectively carry out the process or take a professional quidance and take advantage of the opportunities available in the Turkish market.

As a Turkish Business Consulting Firm; A&M Consulting Co. is an essential business partner for global investors & individual entrepreneurs who are willing to invest or extend theirs business in Turkey ,

From compliance and reporting to strategic tax planning, A&M Consulting Co. offers Company Registration Services in Turkey that can save time, reduce costs, and provide peace of mind.

By selecting us as the right consultant, you can navigate the complexities of Turkish Trade & Tax regulations with confidence and efficiency.

For expert advice and support, consider reaching out to us today, We are in your side for reputable Company Registration Services, Tax, Accounting & Bookkepping Services in Turkey.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.