How to Set Up a Sole Proprietorship in Turkey? 2026 Guide

If you want to open a sole proprietorship in Turkey, the first question is not “how do I go to the tax office?” but “which door should I enter through?” Tax registration alone is not enough; depending on the nature of the activity, tradesman chamber, tradesman registry, trade registry, MERSIS, municipality and SGK layers may also apply.

For real persons, the business start notification is generally filed within 10 days of the start date. Applications can be made in person, by post, or via the Digital/Interactive Tax Office. Standard tax opening can now be done digitally, but supporting documents may still be required for address verification, power of attorney, licences and chamber/registry processes.

This guide covers, as of July 2026, correct status selection, step-by-step formation, documents, cost scenarios and 4/b Bağ-Kur obligations together.

1️⃣Choosing the Right Status

Before setting up a sole proprietorship, clarify the nature and scale of your activity, stock/store needs, trade-name use and bookkeeping regime. Activities dominated by manual work and falling under tradesman professions usually go to the tradesman registry/chamber; activities with a commercial-enterprise character kept on the balance-sheet basis go to the trade registry.

The practical mapping below is a sound starting point for most small ventures in Istanbul:

Status mapping by activity type

Short NACE selection checklist

The main NACE code must reflect the activity that actually generates income. A wrong NACE can lead to the wrong chamber, licence class, bookkeeping regime and sometimes the wrong document type. For filings with the Istanbul Chamber of Commerce (İTO), the NACE in MERSIS and in the paper file must match.

• •What is my primary revenue line?
• •Do I have a secondary revenue line?
• •What do I deliver to the customer?
• •Is the activity continuous or project-based?
• •Do I hold inventory?
• •Is there a physical store or workshop?
• •Will there be employees?
• •Is there a special activity requiring chamber/registry or sector licence?

Example: if you develop software and deliver projects, your main activity is not retail trade. If you are a barber, test the tradesman route instead of the trade registry. If you buy and sell goods, hold stock and want a trade name, the real-person merchant route is usually more accurate.

2️⃣Step-by-Step Formation Procedure

The backbone of formation is tax registration. In Istanbul, the practical sequence for most files is as follows:

In short: tax registration can usually be started in 1 day; fully compliant activity start takes from 1 day to a few weeks depending on the scenario.

3️⃣Required Documents and Systems

The list below groups documents most often needed in July 2026 Istanbul practice; it is not a claim that every file requires every item. Confirm current rules with the relevant authority.

Core tax-opening file

• •Business Start/Cease Notification
• •Identity details
• •Address evidence (if inspection/special case)
• •Power of attorney (if someone acts on your behalf)
• •Electronic Notification Request (for real persons)

Typical tradesman registry/chamber file

• •ID photocopy
• •Vehicle licence photocopy in some sectors
• •Tax exemption certificate if exempt
• •Residence certificate
• •Personal application or power of attorney

Typical trade registry and İTO file

• •MERSIS application and request number
• •Petition (trade name, capital, start date, activity, NACE)
• •Chamber registration declaration
• •Signature declaration or new ID + MERSIS authority acceptance
• •Tax plate photocopy
• •Foreign-national documents if applicable

For real-person commercial enterprises, İTO requires business capital of at least 100 TL to be stated for chamber records. The petition should also include balance-sheet bookkeeping details.

Notary, e-signature, e-documents and bookkeeping

Under the 2026 workload-based tariff for Istanbul, the formation of a sole proprietorship costs 2.240 TL for a file without employees and 2.900 TL for a file with employees. An e-signature is not mandatory for every opening; it does, however, make e-document and digital processes easier.

• •Self-employed professionals issue a self-employment receipt (SMM) for their professional collections and must switch to e-SMM by the end of the third month following the month they start work.
• •For commercial activities, the invoice, e-Fatura and e-Arşiv Invoice regimes are assessed separately.
• •As of 1 January 2026, the monetary threshold for issuing e-Arşiv Invoices has been abolished for “other taxpayers”.
• •For taxpayers under the simplified method and those keeping books on the operating-account basis, the 3.000 TL threshold including taxes remains in force until 31 December 2026; for these taxpayers, issuance regardless of amount begins on 1 January 2027. The general e-Fatura transition threshold and sector-specific obligations must be assessed separately.

4️⃣2026 Formation and First-Year Costs

There is no single nationwide “sole proprietorship formation cost”. The calculations below are based on the 2026 workload-based CPA tariff for Istanbul and the relevant registry and chamber fees.

Tariff amounts are minimum references. Business volume, document count, employees, e-transformation, additional consultancy, rent, licences, ÖKC, POS and sector permits may be priced separately.

2026 official and tariff references

Start-up costs by formation scenario

The amounts below cover only the basic procedures at the formation stage; monthly and periodic operating expenses are excluded from the totals.

Expenses excluded from the formation total

The following expenses are not included in the amounts above:

• •Monthly accountancy services
• •Bağ-Kur premium
• •Income tax, VAT and stamp duties on tax returns
• •Workplace rent and deposit
• •Municipal workplace opening and operating licence
• •E-signature and private integrator services
• •Business stamp
• •Cash register and POS device
• •Trademark registration
• •Mastery certificate and sector-specific permits
• •Employees’ wages and SGK costs

Conclusion: As of July 2026, the cost of forming a sole proprietorship is not fixed. For a business requiring only tax registration, the cost can start from 2.240 TL. It can rise to approximately 9.917 TL if tradesman registry registration is required, or to approximately 9.310 TL if trade registry and İTO registration are required, excluding notary procedures. The total cost increases where procedures such as a physical signature declaration or notarised power of attorney are needed.

The formation cost and the business’s first-year cash requirement are not the same. Monthly CPA fees, 4/b premiums, taxes, rent, licences and employee expenses must be budgeted separately when operations begin.

5️⃣4/b Bağ-Kur Obligations

A real person who sets up a sole proprietorship is generally insured under Article 4/1-b of Law No. 5510. This includes income-tax payers for commercial or professional earnings, and those exempt from income tax but registered in the tradesman registry.

For income-tax payers, 4/b insurance starts on the tax registration date. Notification to SGK is made via the tax office, tradesman registry and related bodies; if notification is missing, the person may apply directly with supporting documents.

If a 4/a employee also opens a sole proprietorship

Under SGK Circular No. 2025/7 dated 19 February 2025, from 1 January 2025 onward, no compulsory 4/b premium arises for a month in which the total number of 4/a premium days is 30. If the total 4/a declaration is fewer than 30 days, the remaining days are completed to 30 under 4/b, regardless of the reason for the missing days. 4/a days reported by multiple employers are aggregated.

July 2026 premium structure

The 5-point discount requires premiums to be paid on time and no own 4/b debt (or a regularly paid restructuring). 4/b premiums are due by the end of the month following the premium month.

Registration, monitoring and payment flow

• •Tax business-start notification (10 days)
• •4/b registration via institution notice or direct application
• •e-Devlet: 4B Registration, Debt Status, Payment Statement, Daily Earnings Declaration
• •Pay 4/b premium by the end of the following month
• •If hiring: 4/a workplace declaration + hire entry + e-Bildirge/MUHPHB
• •For healthcare: 30 days of premiums + no more than 60 days of debt at application

Calculation examples

Scenario 1 — No employees, no other 4/a job: If declared at the lower limit, monthly premium is 11.808,23 TL; with 5-point discount conditions met, 10.156,73 TL.

Employee cost example — At the gross minimum wage of 33.030 TL, the 15% employee share equals 4.954,50 TL and is deducted from gross pay. The undiscounted employer share of 23,75% equals 7.844,63 TL. It is therefore incorrect to treat the combined 38,75% as an additional employer expense on top of gross pay; the undiscounted employer cost is 33.030 + 7.844,63 = 40.874,63 TL.

4/a–4/b example — If one or more other employers report a total of 20 days under 4/a during the month, the remaining 10 days are completed under compulsory 4/b. If the total 4/a declaration is 30 days, no compulsory 4/b premium arises for that month.

6️⃣Timeline and Checklists

Tax registration can usually be started in 1 day. Saying “everything finishes in one day” is still wrong because of inspection, registry appointments, municipal paperwork, e-Tebligat and employee registration.

Fully compliant activity start ranges from 1 day to a few weeks depending on the scenario.

Scenario A — Home-office / digital services checklist

• •Is the activity commercial or self-employment; has the related document type been correctly determined?
• •Is there a lease/title or building-management obstacle for home office?
• •Will customer traffic or signage trigger municipal issues?
• •Are e-Tebligat and bookkeeping planned?
• •If serving foreign clients, how will VAT and collections be tracked?

Scenario B — Tradesman checklist

• •Are tax opening + chamber + tradesman registry planned together?
• •Municipal operating licence and mastery certificate if needed?
• •Extra permit/inspection needs for food/cosmetics checked?
• •Document regime and ÖKC plan ready for cash/retail sales?
• •Understood that İSTESOB new-registration total does not cover municipality/equipment?

Scenario C — Real-person merchant checklist

• •Are MERSIS + trade registry + trade name ready?
• •Balance-sheet basis and e-Defter/e-Belge architecture planned?
• •Chamber declaration and petition fields complete?
• •İTO appointment and physical filing set ready?
• •Moved away from “just open tax and see later”?

7️⃣Common Mistakes

❓Frequently Asked Questions

9️⃣Tax Types and Declaration Obligations

The profit of a sole proprietorship is subject to the owner’s income tax. The tax base is not turnover, but the net commercial or professional profit determined under tax legislation.

Filing periods, VAT/withholding status and special exemptions vary according to the activity structure. The tax calendar should be documented with the CPA when tax registration is opened.

Young entrepreneur earnings exemption

Individuals who are under 29 when their tax liability begins, are becoming income-tax payers for the first time and meet the other conditions may benefit in 2026 from an earnings exemption of up to 400.000 TL for three tax periods.

The one-year 4/b insurance premium support for young entrepreneurs was abolished by Law No. 7566 as of 1 January 2026. The income-tax earnings exemption remains in force.

🔟Home-Office, Rent Withholding and Expenses

Using a home address as a workplace should be assessed jointly in terms of tax, the lease agreement, the condominium/building management plan and the municipal licence.

Rent and withholding tax

Under Article 94 of the Income Tax Law (GVK), a taxpayer subject to the actual method who is required to withhold tax must generally deduct 20% from the gross rent of a workplace or home office rented from an individual. Whether the lease states net or gross rent affects the cash burden.

The outcome may differ where the lessor is a company or a tax-exempt organisation, or under special contract scenarios. The lessor's tax status should be checked before signing the lease.

Main items deductible as expenses

• •General expenses directly related to earning and maintaining the income
• •In self-employment, the full rent paid if part of the residence is used as a workplace
• •In self-employment, half of home-office expenses such as heating, lighting and water
• •If the workplace is owned by the taxpayer, depreciation — or half of the home-office depreciation — subject to the conditions
• •Depreciation of fixtures used in the professional/commercial activity
• •Activity-related travel, communication, software and professional publication expenses
• •Statutory rates and monetary limits apply to passenger car expenses and rentals

Not every expenditure is a deductible expense. Documentation, the causal link with the activity, statutory limits and VAT deduction must each be examined separately; personal expenditures cannot be booked as business expenses.

1️⃣1️⃣Sole Proprietorship Closure Procedures

The complete cessation of taxable transactions constitutes a cessation of business. Real persons must report the cessation within one month of the event.

Closing a sole proprietorship for tax purposes is simpler than liquidating a capital company; however, the file should not be considered complete until all tax, SGK, chamber/registry and licence layers have been closed.

1️⃣2️⃣Sole Proprietorship or Limited Company?

The choice should not be made on formation cost alone. Personal liability, profit level, partnership and investment plans, public debts and the closure process should be evaluated together.

A sole proprietorship can be practical for low-risk, single-person start-ups. Where there is high contractual risk, a partner/investor plan or a need for a corporate structure, a limited company may be more suitable; the decision should be based on concrete figures.

✅Practical Takeaways

Setting up a sole proprietorship involves more than completing a single form. The correct status and NACE code, tax and e-document arrangements, the 4/a–4/b day calculation, actual costs, home-office withholding tax and the closure plan must be managed together.

As of July 2026, the practical priority order is:

• •Activity + address + NACE + status selection
• •Business start notification within 10 days
• •e-Tebligat and book/document regime
• •Solve tradesman or trade-registry needs through the correct door
• •Budget 4/b premiums and any employee processes

A well-planned file makes both opening and first-year cost more predictable; the wrong door and wrong assumptions waste both time and money.