a. Persons who are the subject of double sided agreements of Turkey

b. Nonresident scientists, artists or performers  sportmen, who may visit and perform their skills for less than a month.

c. Imported machinery service staff or trainers for less than 3 month visits.

d. Exportation  activites trainer or service suppliers with less than 3 months visits.

e. Permitted Tourism operators for less than 6 months activity.

f. Academic staff with less than 2 year visits.

g. EU Education and Youth Program Headoffice activists during the activity program.

h. Tour Operators with less than 8 months.

g. Foreign football players and trainers

  are working permission exempt with proper documentation.

Social Security is an obligation for Directors and Shareholders of a company. Directors also should have working permission to act as a director. Directors should be payrolled unless they are not shareholders. Shareholders should have independant social security payment to SGK with 4B section.

Corporate tax rate in Turkey is principally 22%. That is relatively low compared with EU and applies to all kind of companies

All corporate or income tax payers (except rental incomes only) should pay their advance income tax from quarter based profit or income.

Q1 at May 17th, Q2 at August 17th, Q3 at November 17th and Q4 at February 17th of next fiscal year.

Manufacturing activities at Free Trade Zones

New  or Strategic Technology profits at special Technopark areas.

R&D activities has special R&D incentive program.

Companies with Investment Certificate. That certificate may allow to reduce the rate of corporate tax according to regime.

Paid dividents out of Turkish Company are subject for witholding taxation. Transfer of profit from branch to parent company  are also subject to same basis.

Personal income taxe rates start from 15% and up to 35% with a step scale.

Taxation of employment income is based on witholding tax on payroll. The amounts will shown in payroll and employer should cut it off from gross salary. According to company profile, declaration to government could be done monthly or quarterly. Employer should declare all witholding taxes for services, employees, rentals, interests.

Common consumer products are 18%, Basic food, apparels and textile are 8%, Flour, sugar and raw foods 1%.

Bank transactions, worker salaries, rentals (except with invoices), services with expense draft, exportations, purchases with exportation notation, sales to some governmental enterprises, purchases by diplomats are VAT exempt.

VAT collected is an amount of VAT generated by company to its customers for services or sales. VAT paid is an allowed amount of VAT paid to third parties for service or goods purchases. VAT deductable is the balance of VAT collected and VAT paid which could be used in next periods of estimation. Vice versa, company should pay the difference to tax office.

Stamp duty has variable rates according to the activity. Some actions and rates are listed below.

Rental Agreements  :  0,189 % of annual rental amount.

Guarantee Agreements   : 0,948 % of total value

Bond, loan agreements   : 0,948 % of total value

Business Agreements      : 0,948 % of total value

Advance Income Tax : 17th of period

VAT Payable               :  26th of every month

Witholding Tax          :  26th of period

Corporate Tax           :  17th of period

Stamp Duty               :  15th days after the agreement signed

Social Security          :  last day of the month

Joint Stock Companies could be established minimum with one real person or legal entity as shareholder.

1. Preparation of Shareholders documents

2. Preparation of Articles of Association.

3. Notarization & Translations

4. Blocking the Capital for registering the company. (1/4 minimum)

5. Registry House and registration process

6. Application to tax office

7. Application to social insurance

Yes, after establishment process finalized. Shareholders could recover the settlement expenses from company.

The documents (trade letters, invoices, notes ..etc ) with company header should contain the items listed below.

a. Trade Registry Number

b. Name of the company.

c. Address of the HQ

Resident or a nonresident person could be a manager of a limited liability company. According to regulations, Turkish Citizen or a foreigner could be manager of company in Turkey, but working permission is an obligation to obtain for a foreigner.

Company should apply to Ankara, Working and Social Security Ministry on behalf of worker. Working permissions are usually granted for a year and should be extended periodically. First manager or major shareholder is easy to obtain, but second or more foreigner may need some extra specifications.

• Company should prove that, applicant is vital for business activity.

• Activity should cause positive results for Turkish Economy. Such as exportation or high potential benefit for public grants many working permissions to workers with ease.

• Company should have at least 5 local workers on the payroll while application is processed.

Local person or a foreigner with working permission could be appointed and registered as manager of Limited Liability Company. Also, a Legal entity could be a manager and pointed real person can represent that legal person to act as manager.

• Shareholder or their authorized representatives should prepare an share sell agreement with buyer. Then both side will sign the Equity Booklet.

• All share transfers are free from Trade Registry process. But annual Board of Meeting will announce and register all changes in a fiscal year at once.

All kind of activites are allowed if there was no restriction or prohibition for it. The rule named “Ultra Vires” was aborted. So, companies could do anything even if it is not mentioned at Articles of Association.

Board of Directors could have Act of Resolution for dismiss or point a new director any time. Signature Identification on Notary and Duty Acceptance Declaration is needed if the director is from out of company. 

Liaison Offices in Turkey Could be established with the permission of Ministry of Treasury. Steps for Liaison Office settlement are as follows;Preparation of Documents of Parent Company Permission from Ministry of Treasury in Ankara , Application to Tax Office for address registry of Office and for workers income tax

Liasion Offices are not permitted to perform trade or financial activities. Those offices only permitted to represent the parent company to potential customers or markets. Liasion Offices have no permission to buy a property or commercial goods. They could only spent for operational expenses.

Liaison Offices could establish a bank accounts with their representatives notarized signature. That account is not allowed to transfer money abroad, but only parent company could transfer and deposit the funds to that account for operational expenses. At the end of permission or operation, remaining amount could be transferred back to parent company.

Liaison Offices are permitted to operate for 3 years. After 3 years, extension for another 3 years is possible. But extension needs re-application

Parent company should prepare the documents listed below for application to Ministry of Treasury.

• Trade Registry of Parent Company

• Shareholders Resolution for establishment of a Liasion Office in Turkey. That resolution should clearly mention about the name of liasion Office and representative.

• Last two years Financial Reports. (Audit is not obligatory)

• Power Of Attorney to representative and/or local accountant / lawyer.

A liasion Office should have regular bookkeeping and accountancy services for fiscal year. That is not same with another type of company and relatively easy. Regular compliances are as follows.

• Bookkeeping of expenses and bank statements

• Application to tax Office for income taxes of services and rentals.

• Application to Ankara for past fiscal year with activity report.

Representatives of a Liasion Office in Tukey should apply for living and working permission. But applicant should be the Parent Company on behalf of liasion Office to point a representative on its behalf.