Turkey has emerged as one of the most dynamic business destinations bridging Europe, Asia, and the Middle East. With a rapidly growing economy, a strategic location, and a supportive investment environment, it’s no surprise that more and more foreign entrepreneurs are looking to start businesses in Turkey.
Whether you’re an investor, freelancer, or corporation seeking expansion, Turkey offers a range of business structures, incentives, and opportunities that make company formation both attractive and accessible.
This comprehensive guide explains how to start a business in Turkey as a foreigner, covering legal requirements, business types, tax considerations, and practical solutions such as using an Employer of Record (EOR) to simplify entry into the Turkish market.
1. Why Start a Business in Turkey?
Before diving into the process, it’s important to understand why Turkey is such a compelling business destination in 2025.
Strategic Location
Turkey’s geographical position provides unmatched access to European, Asian, and Middle Eastern markets, reaching over 1.5 billion consumers within a four-hour flight. Major trade routes pass through Turkey, making it a perfect base for logistics, export, and regional management.
Growing Economy
As one of the top 20 economies in the world, Turkey continues to show strong performance in manufacturing, technology, energy, and services. The country’s GDP has surpassed USD 1 trillion, with stable domestic demand and global trade expansion.
Young and Skilled Workforce
Turkey’s young, educated, and digitally skilled workforce gives foreign businesses a competitive advantage. Labor costs remain significantly lower than in Western Europe, making Turkey ideal for outsourcing, tech development, and industrial operations.
Government Support and Incentives
Foreign investors benefit from tax incentives, free zones, R&D grants, and simplified company registration processes. The government actively encourages international investment through the Investment Office of the Presidency of Turkey.
2. Legal Framework for Foreign Investors
The Foreign Direct Investment Law (FDI Law No. 4875) guarantees equal treatment for local and foreign investors. This means that foreign individuals and companies can establish businesses, acquire real estate, and transfer profits freely, just like Turkish citizens.
There are no restrictions on 100% foreign ownership in most sectors, except for specific industries such as defense, broadcasting, and aviation, which may require special permits.
Foreign entrepreneurs can choose among several business structures, depending on their goals, capital, and risk tolerance.
3. Types of Business Entities in Turkey
a. Limited Liability Company (LLC / Ltd. Şti.)
The Limited Liability Company is the most common and flexible business type in Turkey.
Key Features:
- Requires at least one shareholder (individual or legal entity).
- Minimum share capital: TRY 10,000.
- Liability is limited to the company’s capital.
- Suitable for small to medium-sized enterprises.
This structure allows full foreign ownership and is ideal for startups, service companies, and trading businesses.
b. Joint Stock Company (A.Ş.)
The Joint Stock Company (Anonim Şirket) is more suitable for large-scale operations or companies planning to go public.
Key Features:
- Requires at least one shareholder.
- Minimum share capital: TRY 250,000.
- More complex governance structure (board of directors, general assembly).
- Shares can be transferred freely and listed on the stock exchange.
c. Branch Office
A branch office is an extension of a foreign parent company. It is not a separate legal entity but operates under the parent company’s name and responsibility.
Key Features:
- No minimum capital requirement.
- Must appoint a Turkish resident representative.
- Subject to Turkish tax regulations.
A branch office is ideal for testing the Turkish market before committing to full incorporation.
d. Liaison Office (Representative Office)
A liaison office allows foreign companies to conduct non-commercial activities, such as market research, promotion, or partnership development.
Key Features:
- Cannot engage in direct sales or earn income.
- Requires permission from the Ministry of Industry and Technology.
- Permission is usually granted for 3 years, renewable upon application.
Liaison offices are a great starting point for businesses exploring Turkish opportunities without immediate financial commitments.
4. Step-by-Step Process to Start a Business in Turkey
Starting a business in Turkey involves a series of structured legal steps. With the right support, the entire process can be completed in as little as one week.
Step 1: Choose a Business Structure
Select the most suitable type of company (LLC, JSC, Branch, or Liaison Office) based on your business goals and investment capacity.
Step 2: Prepare and Notarize the Articles of Association
Draft your company’s Articles of Association (AoA), which define the company’s name, address, scope, shareholders, and capital distribution. These must be notarized and translated into Turkish.
Step 3: Register with the Trade Registry Office
Submit your application to the Turkish Trade Registry Office in the province where your company will operate. You’ll need:
- Application form
- Articles of Association
- Proof of capital deposit
- Identification documents for shareholders and directors
- Lease agreement for the company address
Once approved, your company will receive a registration number and become a legal entity.
Step 4: Open a Corporate Bank Account
After registration, open a corporate bank account in Turkey. You’ll need to deposit the initial share capital (for LLCs or JSCs) before final approval.
Step 5: Register for Taxes and Social Security
Obtain a tax identification number and register with the Social Security Institution (SGK). This step is essential for hiring employees and conducting transactions legally.
Step 6: Obtain Necessary Licenses or Permits
Certain sectors—such as healthcare, construction, or energy—require special operating licenses. The type of license depends on your industry and business activity.
Step 7: Start Hiring Employees
Once your company is registered, you can hire Turkish or foreign employees. All employment contracts must comply with Turkish Labor Law.
Foreign businesses can simplify this process by using an Employer of Record (EOR) to handle payroll, taxes, and compliance.
5. Taxation and Financial Obligations
Turkey offers a competitive tax system that supports business growth and investment.
Corporate Income Tax:
- Standard rate: 25% (as of 2025)
- Reduced rates apply in certain free zones or under incentive programs.
Value Added Tax (VAT):
- Standard rate: 20%
- Reduced rates (1% or 10%) for certain goods and services.
Withholding Tax:
- Dividends, interest, and royalties may be subject to withholding tax, typically 10–15%, depending on international tax treaties.
Annual Reporting:
All companies must submit annual financial statements and tax returns. Bookkeeping must comply with Turkish Financial Reporting Standards (TFRS).
6. Investment Incentives for Foreign Businesses
Turkey provides generous incentives for foreign investors through national and regional programs, including:
- Corporate tax reductions or exemptions for strategic sectors.
- Free zones offering tax-free imports, exports, and profits.
- R&D and innovation incentives supporting technology-based companies.
- Investment protection treaties that safeguard against expropriation.
Popular investment areas include renewable energy, technology, logistics, healthcare, manufacturing, and e-commerce.
7. Hiring and Employment in Turkey
Turkey’s labor market is one of the largest and most competitive in the region. Hiring locally helps businesses integrate more easily into the market.
However, for foreign companies without a local entity, hiring can be complex due to tax and labor law requirements. This is where an Employer of Record (EOR) in Turkey becomes invaluable.
An EOR acts as the official employer on your behalf, managing:
- Employment contracts
- Payroll and taxes
- Social security contributions
- Labor law compliance
This allows you to build your team in Turkey without setting up a company, saving time and administrative costs while remaining fully compliant.
8. Challenges to Consider
While Turkey is a highly promising market, foreign investors should be aware of potential challenges:
- Bureaucratic procedures can vary by region.
- Exchange rate fluctuations may affect imported goods or materials.
- Certain industries may require sector-specific permits.
Partnering with local legal experts or an EOR provider helps mitigate these risks and ensures smooth business operations.
9. Why Use an Employer of Record (EOR) to Enter the Turkish Market
For entrepreneurs and corporations who want to test the Turkish market before full incorporation, an EOR solution is the most efficient route.
Through an EOR like Employer of Record Turkey, you can:
- Hire Turkish employees legally in days.
- Manage payroll and benefits without opening a subsidiary.
- Ensure compliance with Turkish labor and tax laws.
- Focus on business growth while we handle administrative processes.
This model reduces setup costs, shortens entry time, and provides flexibility as your business expands.
10. Turkey as a Gateway for Global Entrepreneurs
Starting a business in Turkey as a foreigner has never been easier. With a strategic location, young workforce, and open investment policies, Turkey offers unmatched opportunities for global entrepreneurs.
Whether you plan to launch a startup, establish a manufacturing hub, or expand your services, Turkey provides a stable, innovative, and cost-effective environment for success.
And if you’re looking to enter quickly and compliantly, partnering with an Employer of Record in Turkey allows you to hire, pay, and manage local talent seamlessly—without the administrative burden of company formation.