How to Start a Business in Istanbul
Turkey as a whole is in an enviable position for business owners, but Istanbul is certainly a hotspot for businesses to grow into huge multi-national concerns. If you’re considering opening a business in Istanbul, there is a lot of information you need to digest. There is a lot of red tape to know about, and it’s always best to have a trusted friend or family member who speaks fluent Turkish on your side.
There are many national and international companies who have offices in Istanbul, taking advantage of the trading routes of old. Istanbul is also a city which its on two continents, and again, that is ideal for great business.
Setting up a business in Turkey overall is advantageous and possible becuase of new legislation that was bee passed, allowing foreigners to invest and purchase businesses within the country. Incentives have been put in place to encourage more business in the country, including;
- Foreign companies being allowed to hold the status of being a Turkish companies and therefore having the same right as a native company
- International standard conformity
- Custom duty exception on certain types of equipment and machinery imports
- Some exemptions on certain income taxes and contributions to social insurance
- Subsidisation on energy
- Foreign investor protection schemes
- There are also plans to allow those who buy property in Turkey, to also work legally in the country
How to Set up a Business in Istanbul
Basically it’s about research. We can’t give you the solid guidelines here becuase the red tape and regulations changes so often, that we wouldn’t want to lead you down the wrong path. Having said that, a private limited company is a relatively easy company that a foreigner can establish in Istanbul, and indeed in Turkey overall. To do this, you need to be two o more people and you need to have one shareholder at least. The share capital you have needs to be 10,000 TL minimum.
The best places to get advice on starting your new Istanbul business are:
- A lawyer, for solid, up to date advice and guidance
- Turkish Embassy
- A company formation agent – do your research into how good they are, there are some which are better than others!
You do need to be aware that there are some types of businesses which a foreigner cannot open up in Turkey without getting the go-ahead from the Ministry of Commerce and Industry. These include any private financial institutions, free trade zone operations, banks, factoring, foreign currency exchange offices, and public warehousing.
The good news is that once you have all your paperwork in order and you know what rules you need to adhere to, you can usually get your go-ahead in place and start trading within a week or so. Turkey overall is very keen to bring more foreign investment into the economy, as we mentioned, so they aren’t going to hold you back or cause you excessive hurdles, provided you have everything they have asked for. In brief, the first steps are:
- Draft the Articles of Association, signed by your company director. These need to be done legally and work with the Turkish Commercial Code – remember that the name needs to have ‘limited’ within it. This is then translated and taken to the official Notor office
- The share capital (minimum 10,000TL) needs to be put into a bank account in the company name
- The registration process begins, including the fee paid to the Turkish Commercial Registry Office, who will give you a certificate and the announcement is made in the Turkish Gazette
- Registration for VAT needs to be made with the correct tax authority
That is the clip notes version, but as we mentioned, always check the most up to date information, as goal posts change regularly!
