Company Formation in Turkey: 2026 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, because of the minimum capital amounts applied from 1 January 2024, the Electronic Commercial Ledger System (ETDS) duty for companies registered after 1 January 2026, and the withdrawal of 4/B premium support for young entrepreneurs, much of the older material on the internet is no longer current.

This guide, as of 30 August 2026, covers company formation in Turkey: the sole proprietorship (şahıs işletmesi — a natural person trading in their own name, not a separate legal person), the Turkish limited company (Ltd. Şti.; often described in English as a limited liability company, but governed by Turkish law) and the Turkish joint-stock company (A.Ş.), together with MERSİS procedures, documents, costs, taxes and post-formation duties. Ltd. Şti. and A.Ş. are Turkish-law forms; they are not the legal equivalent of an LLC, SARL, GmbH or similar foreign type, and an A.Ş. is not in every case a listed public company.

1️⃣Which Company Type Should You Choose?

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

• •Sole proprietorship
• •Turkish limited company (Ltd. Şti.)
• •Turkish joint-stock company (A.Ş.)

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 a Ltd. Şti. or an A.Ş.

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.

Turkish limited company (Ltd. Şti.)

A Ltd. Şti. 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 to public debts. For taxes, social-security premiums and other public receivables that cannot be collected from the company, Ltd. Şti. partners may be held liable in proportion to their capital shares under Article 35 of Law No. 6183. Separate liability may also arise for company managers and other legal representatives under Mükerrer Article 35 of Law No. 6183 (the separate provision governing the liability of legal representatives) and Article 10 of the Tax Procedure Law.

A Ltd. Şti. 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

Suitability must still be assessed in light of the activity, the shareholder structure and the growth plans.

Turkish joint-stock company (A.Ş.)

An A.Ş. 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.

An A.Ş. 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

The appropriate company type should nevertheless be chosen after financing, governance and exit plans are assessed together.

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

Share transfers and taxation

In a Turkish limited liability company (Ltd. Şti.), the transfer of a capital share and the acts that create an obligation to transfer must be made in writing; the parties’ signatures are notarised. Unless the articles of association provide otherwise, general-assembly approval is required. The company managers apply for registration of the share transfers with the trade registry.

In an A.Ş., a share transfer depends on whether the share is registered or bearer and on any restrictions in the articles of association. Unless the law or the articles provide otherwise, registered shares are as a rule freely transferable; company approval may be required for registered shares that are not fully paid up and for restricted registered shares provided for in the articles.

The tax outcome of a share sale depends on whether the shareholder is an individual or a company, whether a share certificate or interim certificate exists, the holding period and other statutory conditions. Each transfer must be assessed on its own facts; there is no automatic exemption.

For corporate shareholders, the exemption rate on gains from participation shares held as assets for at least two full years is 50% under Presidential Decree No. 9160, in force from 27 November 2024. The exemption also depends on the holding period, how the asset is recorded, securities-trading activity or holding-company status, and similar conditions. The Revenue Administration (GİB) 2026 guide on the exemption for gains from sales of immovable property and participation shares explains these conditions separately.

Brief comparison

Young entrepreneur income exemption

The young-entrepreneur earnings exemption is not a company type and does not apply automatically to a Ltd. Şti. or an A.Ş. Individuals who, on the date their tax liability starts, have not yet turned 29, for whom income-tax liability is established for the first time in their name, and who meet the other statutory conditions may use this earnings 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 exemption, however, remains in force.

2️⃣2026 Minimum Capital Amounts

Under Presidential Decree No. 7887 published in the Official Gazette on 25 November 2023, the minimum capital amounts for Ltd. Şti. and A.Ş. were increased, and the new amounts entered into force on 1 January 2024.

The amounts in force as of 30 August 2026 are as follows:

These amounts apply to companies to be formed from 1 January 2024. Companies whose capital remains below the minima in TCC Arts. 332 and 580 must increase capital by 31 December 2026; otherwise the statutory consequences follow. In practice this deadline mainly concerns companies registered before 1 January 2024.

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 a Ltd. Şti.

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

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 a Ltd. Şti. should not be treated as an incorporation expense paid to the trade registry or the state at the time of formation.

Capital payment in an A.Ş.

In an A.Ş., at least 25% of the capital subscribed in cash 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 an A.Ş. 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.

An in-kind contribution must be capable of being valued in cash and transferable; it must not be subject to a limited real right, attachment or precautionary measure. These are conditions of acceptance as in-kind capital, not merely matters for review. The following additional steps are also required:

• •Appointment of an expert by the court,
• •Preparation of a valuation report,
• •Registration of a note on the title deed or relevant registry,
• •Documentation of cash-valuability, transferability and the absence of a limited real right, attachment or precautionary measure, which are conditions of acceptance

Formations with in-kind capital can take longer and cost more than formations with cash capital only.

4️⃣How Is Company Formation Carried Out?

Ltd. Şti. and A.Ş. 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 a Ltd. Şti.

• •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 an A.Ş.

• •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 the capital subscribed in cash 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.

Statutory requirement to retain a lawyer

Under Article 35 of the Attorneyship Law No. 1136, an A.Ş. whose issued capital is at least five times the statutory minimum capital for an A.Ş. must retain a lawyer.

Because the A.Ş. minimum capital is 250,000 TL, the threshold for this statutory duty is 1,250,000 TL and above as of 2026.

This statutory duty does not apply to a Ltd. Şti. Failure to comply may result in an administrative fine. The minimum monthly lawyer’s fee is set 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 a Ltd. Şti. or A.Ş.,
• •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 a Ltd. Şti. 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.

A written cost estimate should therefore be prepared according to the characteristics of the company to be formed.

One-off formation costs, ongoing obligations and share capital should be shown separately.

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

Ltd. Şti. and A.Ş. keep books on the balance sheet basis.

The main accounting books are:

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

Depending on the company type, the company may also be required to keep:

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

For books and records, the Tax Procedure Law as a rule provides a five-year retention period, while the Turkish Commercial Code provides a ten-year retention period; the two periods are not interchangeable.

Electronic Commercial Ledger System (ETDS)

According to the Ministry of Trade announcement of 18 December 2025, all companies to be registered with the trade registry from 1 January 2026 must keep the share ledger and the general-assembly meeting and minutes ledger in ETDS. These ledgers are opened in the system together with the formation registration. Keeping the board-of-directors resolution ledger electronically is left to the company’s choice; the ETDS duty does not cover that ledger.

Not every company registered before 1 January 2026 automatically falls within ETDS. The communiqué provides a separate transition period for companies whose formation or articles amendment is subject to Ministry of Trade approval. ETDS must not be confused with the Tax Procedure Law e-Ledger application for the journal, general ledger and inventory book.

Tax returns

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

• •Value Added Tax (VAT) return,
• •Withholding and social-security premium return (Muhtasar ve Prim Hizmet Beyannamesi),
• •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 social-security premium return (Muhtasar ve Prim Hizmet Beyannamesi) may be monthly or quarterly depending on the taxpayer’s status and the conditions for using 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, the following obligations must be handled regularly:

• •SGK workplace registration,
• •Employment commencement and termination notifications,
• •Withholding and social-security premium return (Muhtasar ve Prim Hizmet Beyannamesi),
• •Occupational health and safety obligations,
• •Payroll records

The statutory deadlines for SGK notifications should be checked separately.

Ltd. Şti. partners are as a rule within 4/B (Bağ-Kur). In an A.Ş., 4/B arises for shareholder partners who are board members; merely being a shareholder, or being an A.Ş. partner who is not a board member, does not by itself create 4/B. 4/A reporting from one’s own company is limited and its conditions are examined separately. For foreign partners, work permits and social security are assessed separately.

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

UETS is the national electronic-notification system used for court, enforcement and other authorised-authority notices. GİB e-Tebligat is the tax administration’s own electronic-notification application; they are not the same system and both must be monitored separately.

Contact details on UETS and GİB e-Tebligat accounts must be kept up to date. Not seeing a notification message does not remove the legal effects 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

Permits must be checked separately according to the activity and the practice of the municipality or competent authority.

Annual company law procedures

Companies are not obliged only to file tax returns.

Each year, depending on the company type, the following may be required:

• •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

The exact duties are determined by the company type and the applicable legislation. Independent audit is not automatic for every A.Ş.

8️⃣Formation of Companies with Foreign Partners

In Turkey, foreign natural and legal persons may, under the equal-treatment principle in Law No. 4875, form a Ltd. Şti. or an A.Ş. and become partners in existing companies. There is no duty to have a Turkish partner; the entire capital may be foreign-owned. Sectors that are regulated or subject to prior approval remain reserved.

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 a foreign corporate shareholder, the following additional documents may also be requested:

• •Certificate of activity
• •Resolution of the company’s competent body
• •Resolution appointing a representative
• •Registry extracts
• •Originals authenticated by apostille or consular legalization, where applicable
• •Notarized Turkish translations of the foreign documents

The required form of authentication depends on the issuing country and the current practice of the relevant trade registry.

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

The following statuses are governed by separate application procedures:

• •Residence permit
• •Work permit
• •Turkish citizenship

Forming a company or becoming a partner does not itself grant any of them.

Work-permit or exemption conditions are assessed separately for a foreign partner who is a Ltd. Şti. manager and for a foreign partner who is an A.Ş. board member. Opening a bank account depends on the bank’s own compliance process; no named bank or account-opening guarantee can be given. Work-permit criteria must not be confused with the company’s formation capital.

9️⃣Tax obligations and current rates (2026)

Corporate tax

As of 2026 the general corporate-tax rate for Ltd. Şti. and A.Ş. is 25%. That general rate does not mean the 30% rate applied to the special institutions listed in the law is extended to every company.

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%.

• •Qualifying export income: 20%
• •Qualifying manufacturing income: 24%
• •Certain companies that go public for the first time and meet the statutory conditions: 23%
• •The reduced rate applies only to the relevant qualifying portion of income.

The statutory conditions for each reduction must be checked separately.

Domestic minimum corporate-tax rules applicable for 2025 and later periods must also be taken into account. An exemption or reduction does not mean that no tax is payable in every case. On dividends distributed to an individual partner the general withholding rate is 15% since 22 December 2024; advance corporate tax (geçici vergi) is an advance collection and is not a separate final tax.

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%

The applicable rate is determined according to the classification in the lists annexed to the Presidential Decree.

The VAT rate for a product or service is not determined solely by the sector name.

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.

The 2026 income-tax schedule for non-wage income such as sole-proprietorship and professional earnings is 15% up to 190,000 TL, 20% between 190,000–400,000 TL, 27% between 400,000–1,000,000 TL, 35% between 1,000,000–5,300,000 TL and 40% above 5,300,000 TL. For wages the upper limit of the 27% band is 1,500,000 TL, which is different from non-wage earnings.

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.

Advance corporate tax (geçici vergi)

Ltd. Şti. and A.Ş. pay advance corporate tax (geçici vergi) on calculated corporate income in three-month advance-tax periods.

Advance corporate tax paid is credited against annual corporate tax. Advance corporate tax is not a separate final tax that replaces transaction-based taxes such as VAT or withholding.

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 Ltd. Şti. and 250,000 TL for A.Ş. applies.
• •Companies whose capital remains below the TCC 332/580 minima have until 31 December 2026 to increase capital; in practice this mainly concerns registrations before 1 January 2024.
• •The young entrepreneur income exemption continues, but the one-year Bağ-Kur premium support does not apply.
• •In companies registered after 1 January 2026 the share ledger and the general-assembly ledger are kept in ETDS; not every existing company is automatically in scope.
• •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.