Limited Liability Company (LLC) in Turkish Law

A limited liability company (LLC – in Turkish: Ltd. Şti.) is a type of business structure that combines the liability protection of a corporation with the tax benefits of a partnership or sole proprietorship. In an LLC, the owners (or single owner) have limited liability for the company’s debts and legal obligations, meaning their personal assets are protected in case the company faces financial difficulties or legal issues.

The limited company must have a company contract written and registered to the trade registry at the place where its headquarters is.

A limited company with a single shareholder is also possible but the number of shareholders may not exceed fifty. Partners of a limited company can be both real and legal persons. All shareholders consist The General Assembly which is the legal organ exclusively authorized to take some important decisions about the company (e.g. changing the company contract, selecting the managers and the auditor of the company, etc.). And the manager(s) consist The Board Of Directors which is the other legal organ responsible for the management and representation of the company. It is also possible to have only one “manager/director” but at least one of the them must be a partner of the company. It is not required to be a Turkish Citizen or to reside in Turkey.

To set up an LLC in Turkey, the following steps are generally required:

1. Choose a company name: The name must be unique and not already registered with the Turkish Trade Registry.
2. Draft and sign the articles of association: The articles of association should specify the company’s purpose, capital structure, and management structure.
3. Open a bank account: The company must open a bank account in Turkey and deposit the required minimum capital (currently 50,000 Turkish Liras) into the account.
4. Register with the Turkish Trade Registry: The company must register with the local Trade Registry Office where it plans to conduct its business.
5. Obtain a tax identification number: The company must obtain a tax identification number from the tax authorities.
6. Obtain any necessary business licenses: Depending on the type of business, the company may need to obtain additional licenses or permits.

Once the company is registered, it must comply with Turkish corporate and tax regulations, including annual reporting requirements and tax filings.

It’s important to note that there are certain restrictions on foreign ownership of Turkish companies in certain industries, such as banking, insurance, and energy. Additionally, foreigners must obtain a work permit to work in their own company in Turkey.

Note that there are several guides for foreign investors prepared by The Ministry Of Trade in German, French and Arabic languages.

Please also check and consider the updated information on the website of the Investment Office: https://www.invest.gov.tr/en/investmentguide/pages/establishing-a-business.aspx

It’s strongly been advised to seek the advice of a professional legal and tax advisor when setting up an LLC in Turkey to ensure compliance with all legal and regulatory requirements.