Limited vs Joint Stock Company in Turkey
The two most common types of commercial companies in Turkey are the Limited Şirket (LTD) and the Anonim Şirket (AŞ), commonly referred to as a joint stock company.
The appropriate structure depends on the nature of the business, number of shareholders or partners, investment plans, corporate governance requirements and the intended ownership structure.
| Feature | Limited Şirket (LTD) | Anonim Şirket (AŞ) |
|---|---|---|
| Owners | Can be established with a single shareholder | Can be established with a single shareholder |
| Capital | Subject to the minimum capital requirements applicable under Turkish law | Subject to the minimum capital requirements applicable under Turkish law |
| Liability | The company is a separate legal entity. In certain circumstances, partners and managers may have liability as provided by law. | The company is a separate legal entity. The liability of shareholders and management bodies is determined by law. |
| Transfer of ownership | Transfer of shares is subject to statutory procedures and may also be affected by the company's articles of association. | Share transfers generally provide a more flexible corporate structure. |
| Typical use | Commonly used by small and medium-sized businesses and closely held companies. | Often suitable for more complex corporate structures and businesses seeking investment. |
Taxes and Ongoing Business Costs
When planning a business in Turkey, it is important to consider not only the initial costs of incorporation but also the company's ongoing tax, accounting and administrative obligations.
Corporate Income Tax
The applicable tax rate depends on the legislation in force, the company's status, the relevant tax period and any applicable exemptions or special tax regimes.
VAT (KDV)
The applicable VAT rate depends on the nature of the relevant transaction and the rules established under Turkish tax law.
Registered Address
A Turkish company must have a registered address in Turkey.
Accounting Services
Companies generally work with a professional accountant (SMMM) to meet their accounting, tax and reporting obligations.
Work Permits for Company Owners
Owning a company and having the right to work in Turkey are legally separate matters. Establishing a company does not automatically grant a foreign national the right to work in Turkey.
Work Permit
A foreign national who wishes to work in their own company must meet the applicable requirements under Turkish work permit legislation.
Additional Requirements
Depending on the company's structure, the individual's role, investment amount and other circumstances, additional requirements may apply.
How Atalı & Tagi Can Assist
We approach company formation not merely as a formal registration procedure, but as the establishment of a legal and corporate structure designed to support the business over the long term.
- Choosing the Right Structure We help determine the appropriate legal form based on the objectives, ownership structure and intended activities of the business.
- Corporate Documents Legal preparation and review of the documents required to establish the company.
- Company Registration Legal assistance throughout the registration process and interactions with the relevant Turkish authorities.
- Corporate Risk Assessment Analysis of corporate governance, ownership arrangements and the protection of shareholders' or partners' interests.
- Banking Matters Legal support in dealing with banks regarding corporate bank accounts and related matters.
- International Business Legal consideration of cross-border transactions, foreign shareholders and international contractual relationships.
Important: company formation is only the beginning. The legal, tax and corporate structure of the business should be considered before incorporation.