Company Formation in Turkey: 2026 Complete Guide

Entrepreneurs seeking to establish a company in Turkey must evaluate not only incorporation costs, but also company type, partners' liability, minimum capital requirements, tax obligations, and the processes that may arise when closing a company.

In particular, due to the increased minimum capital amounts in 2024, the Electronic Commercial Ledger System (ETDS) obligation that took effect in 2026, and the removal of Bağ-Kur premium support for young entrepreneurs, much of the older content available online is no longer current.

This guide addresses, as of July 2026, the fundamental rules for establishing a sole proprietorship, limited liability company (LLC), and joint-stock company in Turkey, together with MERSIS procedures, incorporation documents, costs, taxes, and post-incorporation obligations.

1️⃣Which Company Type Should You Choose?

The three structures most commonly encountered among small and medium-sized ventures in Turkey are:

• •Sole proprietorship
• •Limited liability company (LLC)
• •Joint-stock company

The right company type should be selected not only based on incorporation cost, but by jointly evaluating matters such as business risk, number of partners, projected earnings, plans to raise investment, share transfers, taxation, and the eventual closure of the company.

Sole Proprietorship

A sole proprietorship does not have a separate legal personality. The business and the business owner are not regarded in law as entirely independent of each other. For this reason, the owner may be personally liable for the business's debts with their personal assets.

In a sole proprietorship:

• •There is no minimum capital requirement.
• •Incorporation procedures are simpler than for capital companies.
• •Registration with the trade registry may be required depending on the nature of the activity.
• •Income is taxed under the progressive income tax tariff.

Closing the business is relatively easier than for an LLC or joint-stock company.

It may be preferred for small-scale e-commerce, consulting, manufacturing, software, and similar single-person activities. However, depending on the nature of the work performed, the activity may be treated as professional income rather than commercial income. It is important to open the tax liability under the correct category.

Young entrepreneur income exemption

Natural persons who have not reached the age of 29 on the date their tax liability begins, who are registered as income taxpayers for the first time in their own name, and who meet the other statutory conditions may benefit from the young entrepreneur income exemption.

In 2026, the exemption amount is 400,000 TL. The exemption applies for three taxation periods starting from the calendar year in which the activity begins. The exemption covers qualifying commercial, agricultural, or professional income—not the business's turnover up to 400,000 TL.

The one-year Bağ-Kur premium support previously provided to young entrepreneurs has been abolished under Law No. 7566. As of 1 January 2026, this premium support does not apply to newly starting young entrepreneurs. The income tax income exemption, however, remains in effect.

Limited Liability Company (LLC)

An LLC may be established by one or more natural or legal persons. The number of partners may not exceed 50.

The company is liable for its own debts with its own assets. As a rule, partners are obliged to pay only the capital share they have committed to with respect to the company's private-law debts.

However, a different liability regime applies with respect to public debts. For taxes, social security premiums, and other public receivables that cannot be collected from the company, LLC partners may be held liable in proportion to their capital shares under Article 35 of Law No. 6183 (the Public Receivables Collection Procedure Law). Separate liability may also arise for company managers and other legal representatives under the duplicated Article 35 of Law No. 6183 and Article 10 of the Tax Procedure Law.

An LLC generally offers a balanced structure for:

• •SMEs,
• •Service businesses,
• •E-commerce companies,
• •Manufacturing and workshop operations,
• •Family businesses,
• •Ventures with a small number of partners

offers a balanced structure.

Joint-Stock Company

A joint-stock company is a capital company whose capital is divided into shares and which is liable for its debts only with its own assets. It may be established with a single shareholder.

A joint-stock company is especially preferred for businesses with objectives such as:

• •Raising investors,
• •Facilitating share transfers,
• •Conducting large-scale operations,
• •Planning a public offering,
• •Establishing a corporate governance structure,
• •Selling the venture in the future

is preferred in businesses with such objectives.

Joint-stock companies must have a board of directors. The board may consist of a single person.

In the sale of joint-stock company shares, whether the shareholder is a natural person or a legal entity, whether share certificates or interim certificates exist, and the holding period may change the tax outcome. Gains arising from the sale by natural persons of share certificates of fully liable joint-stock companies after holding them for more than two years are not treated as taxable capital gains if the conditions are met. For corporate partners, gains from the sale of participation shares held in assets for at least two full years may, if other conditions are also met, be 50% exempt from corporate tax as of 2026. Each share transfer must be evaluated separately according to its own conditions.

Brief comparison

2️⃣2026 Minimum Capital Amounts

Under Presidential Decree No. 7887 published in the Official Gazette on 25 November 2023, the minimum capital amounts for LLCs and joint-stock companies were increased, and the new amounts entered into force on 1 January 2024.

The amounts valid as of July 2026 are as follows:

These amounts apply to newly established companies.

3️⃣How Capital Is Paid In

Minimum capital is not an incorporation fee paid to the state or the chamber of commerce. Capital is a resource belonging to the company, to be used in its operations.

After capital is paid into the company, it becomes part of the company's assets. Partners may not freely withdraw capital as personal money; it may be used for the company's operations, investments, inventory, and operating expenses.

Capital payment in an LLC

There is no requirement to block a specified portion of cash capital in a bank before registration when establishing an LLC.

Capital committed in the articles of association may be paid within 24 months from the company's registration. A shorter payment period may be specified in the articles of association.

For this reason, the 50,000 TL minimum capital set for an LLC should not be treated as an incorporation expense paid to the trade registry or the state at the time of formation.

Capital payment in a joint-stock company

In a joint-stock company, at least 25% of cash-committed capital must be deposited into a bank account opened in the company's name before registration.

The remaining capital may be paid within 24 months following the company's registration. Since the minimum capital for a joint-stock company is 250,000 TL, where the entire minimum capital is committed in cash, at least 62,500 TL must be deposited before registration.

Capital in kind

It is possible to contribute real estate, machinery, vehicles, intellectual property rights, or other transferable economic value to the company as capital in kind.

However, in capital-in-kind transactions:

• •Appointment of an expert by the court,
• •Preparation of a valuation report,
• •Registration of a note on the title deed or relevant registry,
• •Examination of whether any encumbrance exists on the asset

Such additional procedures may be required. For this reason, incorporations with capital in kind may take longer and cost more than those funded entirely in cash.

4️⃣How Is Company Formation Carried Out?

LLC and joint-stock company formation procedures are initiated through MERSIS and completed at the relevant Trade Registry Directorate.

A virtual office address may be used for certain consulting, software, and e-commerce activities. However, for production, warehousing, food, health, beauty, education, and license-dependent activities, a virtual office address alone may not be sufficient.

5️⃣Documents Required for Company Formation

Required documents vary depending on company type, whether partners are natural or legal persons, presence of foreign partners, and contribution of capital in kind.

Typical documents for an LLC

• •Articles of association prepared through MERSIS
• •Identity information of founding partners
• •Managers' declarations of acceptance of duty
• •Signature circular
• •Information regarding the company address
• •Competition Authority share payment document or collection record
• •Power of attorney if acting by proxy
• •Valuation and registry documents if capital in kind is contributed
• •Resolution of the authorized body if a legal entity is a partner

Additional documents for a joint-stock company

• •Articles of incorporation
• •Documents relating to board members
• •Declaration of acceptance of duty by board members who are not shareholders
• •Bank letter showing that at least 25% of capital has been deposited
• •Expert report if capital in kind is contributed
• •Resolution regarding the natural person representative if a legal entity is a board member
• •Permit document for activities subject to ministry approval

The document list may vary in practice depending on the trade registry directorate. Before application, the directorate's current list of "documents required for registration" should be checked.

Requirement of a contracted lawyer

Under Article 35 of the Attorneys' Law No. 1136, joint-stock companies whose issued capital is five times the minimum capital set for joint-stock companies or more must retain a contracted lawyer.

Since the minimum capital for joint-stock companies is 250,000 TL, the threshold for retaining a contracted lawyer is 1,250,000 TL and above as of 2026.

This obligation does not apply to LLCs. Failure to comply may result in an administrative fine. The minimum monthly fee of a contracted lawyer is also determined in the tariff of the Union of Turkish Bar Associations.

6️⃣2026 Company Formation Costs

There is no single incorporation cost valid for every company across Turkey.

Total cost varies according to:

• •Whether the company is an LLC or joint-stock company,
• •The province where the company headquarters is located,
• •The chamber of commerce tariff,
• •Length of the articles,
• •Volume of the announcement text,
• •Number of partners and managers,
• •Use of power of attorney,
• •Presence of foreign partners,
• •Translation and apostille procedures,
• •Contribution of capital in kind,
• •Scope of accounting and legal advisory services,
• •Use of a virtual or physical office.

Basic cost items

Minimum capital is not a fee added to incorporation cost and paid to the state. Since it is an asset of the company, incorporation expenses and capital amount should be evaluated separately.

Figures on the internet stating that "the cost of establishing an LLC is definitely this amount" are often misleading because they do not specify:

• •The city,
• •Number of partners,
• •Need for notary services,
• •Accounting fee,
• •Foreign document expenses,
• •Address and license costs.

can be misleading because they do not specify these items.

The soundest approach is to prepare a written cost estimate based on the characteristics of the company to be established.

7️⃣Post-Incorporation Obligations

Registration of the company with the trade registry is not the end of the process, but the beginning of ongoing financial and legal obligations.

Accounting and commercial ledgers

LLCs and joint-stock companies keep books on the balance sheet basis.

The main accounting books are:

• •Journal (yevmiye defteri),
• •General ledger (defter-i kebir),
• •Inventory ledger.

Additionally, depending on company type:

• •Share ledger,
• •General assembly meeting and minutes ledger,
• •Board of directors resolution ledger,
• •Board of managers resolution ledger

may also apply.

Electronic Commercial Ledger System (ETDS)

As of 1 January 2026, companies registered with the trade registry are required to maintain their share ledger and general assembly meeting and minutes ledger in the Electronic Commercial Ledger System (ETDS).

These ledgers are opened in the system upon the company's registration. ETDS should not be confused with the electronic ledger application used for the journal and general ledger. E-ledger obligations relating to accounting are subject to separate regulations.

Tax returns

Depending on activity and tax liability status, companies' main tax obligations include:

• •Value Added Tax (VAT) return,
• •Withholding and Premium Service Declaration,
• •Provisional tax return,
• •Annual corporate tax return,
• •Stamp tax return,
• •Sectoral returns such as special consumption or accommodation tax.

The VAT return is generally filed monthly. The Withholding and Premium Service Declaration may be monthly or quarterly depending on the taxpayer's status and conditions for benefiting from the quarterly period.

Since declaration and payment deadlines may occasionally be extended by the Revenue Administration (GİB), the current Tax Calendar should be followed.

E-invoice and e-archive

E-invoice and e-archive obligations are not determined solely by whether a company has been established. They are determined according to turnover, line of business, and special sector regulations.

In some sectors, e-document obligations may arise regardless of turnover thresholds or with lower turnover limits. For this reason, whether the company falls within e-invoice scope at the start of operations should be checked separately.

SGK obligations

If employees are hired:

• •SGK workplace registration,
• •Employment commencement and termination notifications,
• •Withholding and Premium Service Declaration,
• •Occupational health and safety obligations,
• •Payroll records

must be followed regularly.

The 4/a or 4/b social security status of a company partner or manager should also be evaluated separately according to personal conditions.

Beneficial owner notification

Corporate taxpayers are obliged to declare beneficial owner information and keep it up to date.

In determining the beneficial owner, natural persons holding more than 25% of the legal entity's shares are considered first. Persons who ultimately control the entity independently of share ratio may also be regarded as beneficial owners.

UETS and electronic notifications

A National Electronic Notification System (UETS) address is created for companies. Notifications from courts, enforcement offices, SGK, and other competent public institutions may reach the company electronically.

It is important to keep email and telephone information in the UETS account up to date. Failure to see a notification message does not eliminate the legal consequences of electronic service.

Municipal and sectoral permits

A tax plate and trade registry registration do not replace a workplace opening and operating license.

Depending on the activity, the following may additionally be required:

• •Municipal license,
• •Craft certificate,
• •Food business registration,
• •Health or tourism permit,
• •Environmental permit,
• •ETBİS registration,
• •İYS registration,
• •Professional chamber registration,
• •KVKK and, where required, VERBİS procedures

may be required.

Annual company law procedures

Companies are not obliged only to file tax returns.

Each year, depending on company type:

• •An ordinary general assembly must be held,
• •Financial statements must be approved,
• •Use of profit must be resolved,
• •Manager or board resolutions must be adopted,
• •Capital payments must be monitored,
• •Commercial ledger procedures must be completed

may be required.

8️⃣Formation of Companies with Foreign Partners

In Turkey, foreign natural and legal persons may generally establish the same types of companies as Turkish investors and may become partners in existing companies.

Residence in Turkey is not mandatory for a foreign natural person merely to become a partner in a company. However, presenting only a passport at incorporation is usually not sufficient in most cases.

The following documents are generally required:

• •Notarized Turkish translation of the passport,
• •Potential tax number,
• •Residence permit document if residing in Turkey,
• •Power of attorney if acting by proxy,
• •Apostille or consular legalization depending on the country where the document was issued.

For foreign legal entity partners, the following may additionally be requested:

• •Certificate of activity,
• •Resolution of the company's authorized body,
• •Resolution appointing a representative,
• •Registry records,
• •Apostille or consular legalization,
• •Notarized Turkish translations

Company formation may be carried out through a duly executed power of attorney without the foreign partner traveling to Turkey.

However, establishing a company in Turkey or becoming a partner in a company does not automatically grant a foreign person:

• •A residence permit,
• •A work permit,
• •Turkish citizenship

The work permit status of foreign partners and company managers who will actually work in Turkey should be examined separately. Residence permit applications are also evaluated according to the foreign national's purpose of stay and other conditions.

9️⃣As of 2026, the general corporate tax rate is 25%.

Corporate tax

As of 2026, the general corporate tax rate is 25%.

For banks, finance companies, electronic payment institutions, insurance companies, capital markets institutions, and certain other entities listed in law, the rate is applied as 30%.

• •For qualifying:
• •Export income at 20%,
• •Manufacturing income at 24%,
• •Certain entities going public for the first time at 23%

rates may come into play. The reduced rate may apply only to the relevant qualifying income portion.

Domestic minimum corporate tax regulations applicable for 2025 and subsequent periods should also be taken into account. The existence of an exemption or reduction does not mean that no tax will be paid in every case.

Value Added Tax (VAT)

General VAT rates are:

• •General rate: 20%
• •Deliveries and services in List II: 10%
• •Deliveries and services in List I: 1%

These rates are structured as follows.

The VAT rate for a product or service is not determined solely by sector name. How the relevant product or service is classified in the lists annexed to the Presidential Decree must be considered.

For this reason, generalizations such as "all food products are 1%" or "all textile products are 10%" are incorrect.

Income tax

Income of sole proprietorships and self-employed persons is taxed at progressive rates under the annual income tax tariff.

As income rises, the applicable tax bracket also rises. For this reason, in activities where high income is expected, the tax burden between a sole proprietorship and a capital company should be compared.

However, looking only at the corporate tax rate is not sufficient. If company profit is distributed to partners, dividend withholding and the partner's income tax status must also be calculated separately.

Provisional tax

LLCs and joint-stock companies pay provisional tax on calculated corporate income in three-month provisional tax periods.

Provisional taxes paid are credited against annual corporate tax.

Stamp tax

Stamp tax may arise with respect to returns, contracts, and certain documents.

Since stamp tax amounts and rates are updated each year, the current tariff on the date of the transaction should be used.

🔟Common Mistakes

❓Frequently Asked Questions

✅Company formation in Turkey is not a technical procedure completed merely by entering information into MERSIS.

Choosing the right company type directly affects partners' liability, taxes payable, ability to raise investment, share transfers, and the eventual closure of the company.

Those establishing a company in 2026 should pay particular attention to the following:

• •Minimum capital of 50,000 TL for LLCs and 250,000 TL for joint-stock companies applies.
• •31 December 2026 is an important date for existing companies with low capital.
• •The young entrepreneur income exemption continues, but the one-year Bağ-Kur premium support does not apply.
• •Companies established after 1 January 2026 must maintain certain commercial ledgers through ETDS.
• •Incorporation costs vary according to city, partnership structure, and document requirements.
• •Trade registry registration does not mean that tax, social security, license, and sectoral permit obligations are complete.

Before deciding on company formation, a customized incorporation analysis should be prepared taking into account line of business, projected turnover, partnership structure, and future plans.