Legal Considerations for US Entrepreneurs Setting Up in Turkey
Yes, a US citizen can own 100% of a Turkish company in most sectors, set it up remotely without traveling, and repatriate profits freely. Turkey treats US founders on equal footing with local investors, but the rules on company structure, minimum capital, work permits and tax differ sharply from those at home. This guide walks American entrepreneurs through the legal essentials of launching and running a business in Turkey in 2026, and flags the recent changes that catch foreign founders out.
Foreign Investment Framework: Equal Treatment for US Investors
Turkey's Foreign Direct Investment Law No. 4875 is the cornerstone for any US entrepreneur. Its guiding principle is equal treatment: foreign investors carry the same rights and obligations as Turkish nationals, with no special permit required simply to invest. A US citizen or US company can own 100% of a Turkish company in almost every sector, repatriate profits, and access the same incentives as domestic businesses.
A few practical points flow from Law 4875 and related rules:
- No prior approval is needed for most activities, and a foreign-owned company is treated as a Turkish legal entity.
- Sector-specific limits still apply in regulated areas such as banking, aviation, media, maritime and energy, where licensing or ownership caps may exist.
- Real estate acquisition by foreign-owned companies follows separate rules and may need additional clearance in certain locations. If property is part of your plan, our team can advise on real estate acquisition by foreign-owned companies.
Because foreign and local investors are treated alike, most US founders set up an ordinary Turkish company rather than a branch. It is cleaner, fully eligible for incentives, and easier to operate day to day. To map your project onto the right structure from the outset, see our company formation in Turkey service.
A.Ş. vs Ltd. vs Branch vs Liaison: Choosing Your Structure
Company types are governed by the Turkish Commercial Code (TTK) No. 6102. Each entity carries different liability, capital and governance implications. The table below compares the four routes US founders weigh most often.
| Feature | Joint-Stock (A.Ş.) | Limited (Ltd. Şti.) | Branch | Liaison Office |
|---|---|---|---|---|
| Minimum capital | 250,000 TRY (500,000 TRY registered-capital) | 50,000 TRY | No fixed minimum | None (no revenue allowed) |
| Liability | Limited to shares | Limited to shares* | US parent fully liable | N/A |
| Share transfer | No notarization needed | Notarized and registered | N/A | N/A |
| Investor-ready | Strong (best for funding rounds) | Workable but heavier | Limited | No |
| Can earn revenue | Yes | Yes | Yes | No |
*Ltd. shareholders can also face personal liability for unpaid public debts (taxes, social security) in proportion to their stake.
Joint-Stock Company (Anonim Şirket / A.Ş.)
Best suited to larger ventures, capital-raising and eventual investment rounds. Minimum share capital is 250,000 TRY (or 500,000 TRY for companies using the registered-capital system). An A.Ş. allows a single shareholder and a single director, permits share transfers without notarization, and is the natural vehicle for businesses planning to attract outside investors. If you expect share transfers and investment rounds, this structure usually fits best.
Limited Liability Company (Limited Şirket / Ltd. Şti.)
The most common choice for small and mid-sized operations. Minimum capital is 50,000 TRY. Governance is lighter than an A.Ş., but share transfers must be notarized and registered, and shareholders can be held personally liable for unpaid public debts in proportion to their shareholding.
Branch and Liaison Offices
A branch office is an extension of the US parent, which remains fully liable for the branch's obligations. A liaison (representative) office may conduct market research and coordination but cannot generate commercial revenue; it is licensed by the Ministry of Industry and Technology, typically in three-year increments.
The 31 December 2026 Capital Deadline You Cannot Ignore
The minimum-capital figures above were raised on 1 January 2024. A separate rule then set a deadline that affects every existing company, including any Turkish business a US founder buys or already runs.
For US founders this matters in two scenarios. If you are acquiring an existing Turkish company, confirm during due diligence that it has met (or will meet) the new minimum, so you do not inherit a dissolution risk. If you already operate one, treat the increase as a near-term compliance task, not a someday item. Either way, a short capital-increase resolution and registry filing usually resolves it — but the clock is real.
The Company Registration Process Step by Step
Forming a Turkish company is a sequential, largely electronic process handled through MERSIS (the central trade registry system) and the local Trade Registry Office:
- Obtain a potential tax number for each foreign shareholder and director from the local tax office.
- Prepare the articles of association via MERSIS and have them executed before the Trade Registry or a notary.
- Deal with capital. For an A.Ş., 25% of subscribed cash capital must be paid into a blocked bank account before registration, with the remaining 75% due within 24 months. A Ltd. Şti. can pay subscribed cash capital within 24 months after registration.
- Register with the Trade Registry Office, submitting the articles of association, signatures and supporting documents.
- Publication of the incorporation in the Turkish Trade Registry Gazette.
- Tax and VAT registration, plus opening corporate books certified by a notary.
- Social Security Institution (SGK) registration before hiring any employee.
Documents issued abroad (such as a parent company's certificate of incorporation or a shareholder's passport) must be notarized and apostilled in the US under the Hague Apostille Convention, then translated into Turkish by a sworn translator. We can prepare your articles of association and shareholder agreements in bilingual form so governance is clear from day one.
Cost, Timeline and the Turkish Bank-Account Hurdle
Two questions dominate every first call: how long does it take, and how much does it cost? The honest answer is that incorporation is fast; the friction sits before and after it.
Timeline
Once your US documents are apostilled and sworn-translated, and a power of attorney is in place, the registry stage itself can complete in a matter of days. The realistic critical path is the paperwork abroad (apostille and translation) and, afterwards, the bank account and tax setup. Plan in weeks, not months, but front-load the document gathering.
Cost
Set-up costs combine government and registry fees, notary and translation charges, mandatory accountancy registration and professional fees. These vary with entity type, capital and city, and Turkish bar rules prevent us from quoting or competing on fixed fees in published content — we give a clear written estimate for your specific project on request.
The corporate bank account
This is the step foreign-owned companies underestimate. Turkish banks apply strict know-your-customer and anti-money-laundering checks, ask for beneficial-owner documentation, and frequently require a director to attend a branch in person to open the account and collect the signature device. Compliance review can add time, and some banks are more comfortable with foreign-owned entities than others.
Work and Residence Permits for the Founder and Staff
Owning a Turkish company does not automatically grant the right to live or work in Turkey. A US founder who wants to be physically present and active in the business generally needs a work permit, which doubles as a residence permit.
- International Labour Force Law No. 6735 governs work permits, issued by the Ministry of Labour and Social Security.
- Foreigners and International Protection Law No. 6458 governs residence permits and the broader status of foreigners in Turkey.
Where the founder is a shareholder-director, the company typically must meet financial and employment conditions. Current practice points to a company paid-in capital of around 500,000 TRY, the founder holding at least a 20% share, and a ratio of five Turkish employees per foreign worker (commonly waived for the first six months for company partners). A shareholder whose capital contribution exceeds roughly USD 100,000 may be exempt from the five-to-one employee ratio. These thresholds change and are applied case by case, so confirm the current figures before relying on them.
For larger or strategic profiles, the Turquoise Card regime offers an indefinite work-permit route based on qualifications and strategic contribution rather than investment size alone. Separately, Turkish citizenship by investment is possible under Law No. 5901 on Turkish Nationality, with thresholds that are revised periodically. Our team handles work and residence permits for foreign founders alongside the formation itself.
Taxation and the US-Turkey Double Tax Treaty
Tax planning is decisive for US entrepreneurs, who must reconcile Turkish obligations with US worldwide taxation and reporting.
- Corporate income tax is 25% for most companies; banks and certain financial institutions pay 30%. Incentive zones and qualifying activities can reduce the effective rate.
- Domestic minimum corporate tax. Since 2025 a minimum-tax floor ensures corporate tax is generally at least 10% of corporate income before certain exemptions and deductions. This caps how low incentives can push the effective rate, with limited carve-outs (for example, newly established companies for their first years).
- Value-Added Tax (VAT) has a standard rate of 20%, with reduced rates of 10% and 1% for specified goods and services.
- Withholding tax applies to dividends, certain service payments and royalties, often reduced by the treaty.
- Stamp duty applies to many contracts at varying rates.
The US-Turkey Double Taxation Treaty (in force since 1998) prevents the same income from being taxed twice and sets reduced withholding ceilings on dividends, interest and royalties.
The US side: do not overlook these
US founders carry reporting duties at home that a Turkish accountant will not flag:
- FBAR (FinCEN Form 114) for foreign bank accounts over the threshold.
- Form 5471 for US persons who own or control a foreign corporation, such as your Turkish A.Ş. or Ltd. Şti.
- GILTI and Subpart F rules can pull certain Turkish-company income onto your US return.
- "Check-the-box" entity classification lets you elect how a Turkish entity is treated for US tax purposes, which can materially change your US outcome and is best decided before you incorporate.
Employment, Data Protection, IP and Sector Regulation
Employment Law
Once you hire staff, several statutes apply. Labour Law No. 4857 sets a standard 45-hour work week and governs contracts, leave and severance. Social Security Law No. 5510 mandates employer contributions for pension and health coverage. Occupational Health and Safety Law No. 6331 imposes workplace safety duties, and Trade Unions Law No. 6356 protects collective bargaining.
Data Protection (KVKK)
If your company handles personal data of Turkish employees or customers, the Personal Data Protection Law No. 6698 (KVKK) applies. It mirrors many GDPR concepts and may require registration with the data controllers' registry (VERBİS), lawful-basis and consent management, and care with cross-border data transfers — a point US tech and SaaS founders should plan for early rather than retrofit.
Intellectual Property
IP is consolidated under the Industrial Property Law No. 6769 (in force since 10 January 2017). Trademarks are registered for 10-year renewable terms, patents for up to 20 years subject to annual fees, and registered designs for 5-year terms renewable up to a maximum of 25 years. Copyright arises automatically and lasts the author's life plus 70 years. Turkey is party to the Madrid Protocol, the Patent Cooperation Treaty and the Hague Agreement, so US owners can extend existing rights into Turkey.
Incentive Zones: Free Zones and Teknopark
Two regimes draw US tech and export-focused founders in particular. Free Zones can offer customs and tax advantages for manufacturing and trade. Technology Development Zones (Teknopark) can offer income- and corporate-tax exemptions for qualifying R&D and software activity, plus support for staff. Eligibility is activity-specific and conditions change, so confirm the current rules and whether the domestic minimum tax affects your case.
Sector Regulation
Regulated industries answer to dedicated authorities, including the Banking Regulation and Supervision Agency (BDDK), the Capital Markets Board (SPK), the Energy Market Regulatory Authority (EPDK) and the Information and Communication Technologies Authority (BTK). Confirm licensing requirements before entering these sectors.
How Lexin Legal Helps US Entrepreneurs
From entity selection to registration, work permits and tax structuring, the formation phase sets the legal and financial trajectory of your Turkish venture. Lexin Legal acts for US founders, startups and investors, working in English and coordinating with your US advisors where needed.
We can handle formation remotely under a power of attorney, prepare bilingual articles of association, secure tax numbers and work permits, and advise on the structure best suited to your goals. After launch, we also help foreign-owned companies on the commercial side, including enforcing unpaid commercial debts in Turkey. To discuss your project, get in touch with our team or review our company formation service in detail.
Frequently asked questions
Can a US citizen own 100% of a company in Turkey?
Yes. Under Foreign Direct Investment Law No. 4875, foreign investors are treated equally with Turkish nationals and can own 100% of a Turkish company in most sectors. Limited exceptions apply in regulated industries such as banking, aviation, media and energy.
What is the minimum capital to start a company in Turkey?
Since 1 January 2024, a Limited Liability Company (Ltd. Şti.) requires a minimum of 50,000 TRY and a Joint-Stock Company (A.Ş.) requires 250,000 TRY (or 500,000 TRY under the registered-capital system). Existing companies must also reach these minimums by 31 December 2026. Confirm current amounts before incorporating.
How long does it take to open a company in Turkey?
Once your US documents are apostilled and sworn-translated and a power of attorney is in place, the trade registry stage can complete in a matter of days. The realistic critical path is the document preparation abroad beforehand and the bank account and tax setup afterwards, so plan in weeks rather than months.
How much does it cost to set up a company in Turkey?
Costs combine government and registry fees, notary and sworn-translation charges, mandatory accountancy registration and professional fees, and vary with entity type, capital and city. Turkish bar rules prevent us from publishing fixed fee figures, but we provide a clear written estimate for your specific project on request.
Do I need to be in Turkey to set up my company?
No. A Turkish lawyer can complete the entire formation under a power of attorney using your notarized and apostilled US documents translated into Turkish. The one step that often still needs the director in person is opening and activating the corporate bank account.
Can I open a Turkish business bank account remotely?
Often not fully. Turkish banks apply strict know-your-customer and anti-money-laundering checks for foreign-owned companies and frequently require a director to attend a branch in person to open the account and collect the signature device. Plan a bank visit into your schedule even when formation itself is done remotely.
Does owning a Turkish company give me the right to live and work there?
Not automatically. To be physically present and active in the business you generally need a work permit under International Labour Force Law No. 6735, which also serves as your residence permit under Law No. 6458. Note that the capital expected for a founder's work permit is far higher than the minimum needed just to form the company, so capitalise accordingly.
How does the US-Turkey tax treaty affect my business?
The US-Turkey Double Taxation Treaty prevents the same income from being taxed in both countries and reduces withholding rates on dividends, interest and royalties. US founders must still meet US reporting duties such as FBAR and Form 5471 for foreign corporations and consider GILTI and entity-classification elections, so coordinate advisors in both countries.
