Turkey Business Guide

Form of investment in Türkiye

1. Establish an entity
Entity Form Type
Foreign investors can conduct business in Türkiye through joint-stock companies, limited liability companies, partnerships and other entities, among which joint-stock companies and limited liability companies are the most common types of companies.

joint-stock company
The capital of a joint-stock company is divided into several shares, and the responsibility of the shareholders is equal to the number of shares they own. Shareholders of a joint-stock company can be individuals or legal entities, and their nationality is not restricted. The minimum share capital of a joint-stock company is 50000 shares, and the minimum share capital for implementing the registered capital system is 100000 shares. In certain regulated industries, such as financial services and energy, the minimum share capital is much higher and may vary depending on the activities undertaken.

limited liability company
According to the New Commercial Code, a limited liability company can be established by one person. The company needs to register and publicize within 7 days, and publish it on the company website. In addition, the new law increases the minimum registered capital of a limited company from 5000 lire to 10000 lire.

General partnership
A general partnership is a company established and maintained by at least two individuals for the purpose of conducting business, with the greatest characteristic being that its shareholders have unlimited liability to the company's creditors. There is no minimum registered capital requirement for such companies, but all investors must be natural persons. The responsibilities of shareholders are stipulated in the company's articles of association. The company is established by at least 2 shareholders, each of whom has the right and obligation to independently manage the company. However, the management business can be distributed to one, several, or all shareholders through a company agreement or by a majority of shareholders.

limited partnership
A limited partnership is a company established for the purpose of operating a commercial enterprise, in which some shareholders have limited liability to creditors and some shareholders have unlimited liability to creditors. Therefore, a limited partnership has at least two shareholders. A limited partnership company can only be managed and represented by shareholders with unlimited liability, and limited liability shareholders shall not obstruct the actions of shareholders with unlimited liability and management rights.

Co. Ltd.
The share capital of a limited liability partnership enterprise can be transferred. A limited liability partnership must be established and maintained by at least one shareholder, of whom at least one shareholder is liable for debt
The rights holder bears unlimited responsibility. Only shareholders with unlimited liability have management rights. Although this type of company does not have a board of directors, shareholders with management rights have obligations and responsibilities similar to those of a board of directors.

cooperative
A business association based on mutually beneficial cooperation, composed of individuals willing to provide their own professional skills and other resources, and established in accordance with the Cooperative Society Law.

Steps for company establishment
In order to improve the investment environment, Türkiye has simplified the procedures for company establishment. At present, investors can handle company establishment matters at the Trade Registry Office of their local chamber of commerce, and the entire process can be completed within one day. Specific requirements can be inquired in Türkiye Investment Office（ https://www.invest.gov.tr ）. The specific process is as follows:
(1) Submit the organizational outline and articles of association. According to the Trade Registration Regulations, companies need to go through MERSIS（ https://mersis.gtb.gov.tr ）Submit the charter online.
(2) Notarized documents. The founder submits the following documents to the trade registry. Except for the first item, all documents issued outside Türkiye must be translated and notarized at the local embassy and consulate of Türkiye.
(3) Obtain tax identification number. The company must obtain the tax identification number of non Türkiye shareholders and non Türkiye board members from the tax department to open a bank account and deposit the funds of the proposed company.
(4) Pay competition management fees. 0.04% of the Company's share capital must be paid to the account of the Türkiye Competition Authority (TCA) through the Trade Registry. The Competition Authority of Türkiye is an independent law enforcement agency, whose functions include detecting and preventing unfair commercial competition.
(5) Pay the share capital. Before registration, at least 25% of the subscribed share capital must be paid, and the remaining amount must be fully paid within 2 years. The subscribed capital of a limited company can be paid within 24 months after the establishment of the company.
(6) Apply for registration with the Trade Registry.
(7) Document authentication. The personnel of the trade registration office authenticate the account books and other materials.
(8) Notify the tax bureau of the establishment of the company. The trade registration office shall notify the tax bureau and social security agency of the establishment of the company, and send the company establishment form including the tax number to the tax bureau. Tax officials will go to the company to handle the procedures.
(9) Issue a notice. The founder or authorized agent of the company shall issue a notice of establishment at the trade registration office on the day of registration.

2 Mergers and acquisitions
Merger and Acquisition Review
If the enterprise's merger and acquisition in the form of merger, acquisition, share transfer, asset transfer, etc. results in a change of control, the transaction must be approved by the Türkiye Competition Authority (TCA) in advance.

necessary condition
Mergers and acquisitions are subject to Article 6102 of the Türkiye Commercial Code (TCC). According to TCC, there are two ways to merge: one is for one company to be acquired by another company, known as "merger and acquisition"; The second is the merger of multiple companies into a new company, known as a 'new company merger'. TCC requires that both companies involved in a merger and acquisition must be of the same type. If the entities participating in the merger are not of the same type, the merger cannot be carried out. TCC Article 6102, Act No. 137 specifies the types of enterprises that can be merged.

 
Generally speaking, the company can carry out merger or acquisition if it meets the conditions specified by TCC and other relevant laws of Türkiye, but the merger or acquisition involving special industries such as banking, energy, insurance, telecommunications, etc. needs to comply with specific rules: the company can only proceed after applying to the Banking Regulatory Authority, the Energy Regulatory Authority, the Competition Authority, the Capital Market Commission, the Civil Aviation Administration and other institutions and obtaining approval.

 
3 Joint research and development

Joint R&D Center for Rail Transit Technology
On October 30, 2018, CRRC set up a joint R&D center for rail transit technology in Ankara, the capital of Türkiye, to jointly promote rail transit technology innovation along the "the Belt and Road" with Turkey. The R&D center cooperates with Türkiye Middle East University of Technology and Karabakh University. Relying on several rail transit projects undertaken by CRRC Zhuzhou Electric Locomotive Co., Ltd. (CRRC Zhuzhou Locomotive Co., Ltd.

Huawei Istanbul R&D Center

On February 27, 2010, Huawei Technologies Co., Ltd. of China held the unveiling ceremony of its research and development center in Istanbul, which is Huawei's second largest research and development center in the world. Huawei went to Türkiye for development in 2002 and has built a strong R&D team in Türkiye. From 2008 to 2011, the R&D center invested more than 5000 dollars in Türkiye and employed 350 people. Earthmoving engineering personnel. Huawei will also support its research and development work in Türkiye with an additional $20 million.
4 Overseas Economic and Trade Cooperation Zones