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FOUNDING A COMPANY IN TURKEY

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If you are considering to make some profit but you cannot decide whether to invest your money in establishing a company or purchasing property instead (i.e. to hold it for personal use, sell it when you get a good deal or rent it), we assume this article may help you make up your mind.

At the outset of all, the first question to be asked is how much capital you have for such investment. We can truly say that your experience does not play the main part at the beginning, but your financial position does. Collaborating with a qualified and well versed lawyer/legal consultant is strongly advisable.

This article aims to provide those who intend to establish a company in Turkey with general information about company set up procedure and acquaint them with the company types in accordance with Turkish Commercial Law.

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The first thing you should decide is the TYPE of your company: According to Turkish Laws, you can either set up a company in Turkey as a Joint Stock Company or a Limited Company. At this point your lawyer presumably will not tell you what can be the ideal type for your company to be established but make you decide by asking you the right questions.

The Amount of the initial capital: While limited company can be set up with a minimum initial capital amount of TRY 10,000, a joint stock company can be set up with a minimum initial capital amount of TRY 50,000.

Also, you should bear in mind that in both types, ¼ of the total capital is to be paid at the time of establishment, and ¾ is to be paid within 24 months following the official establishment.

The number of shareholders and its significance: As per Commercial Code, 1 shareholder would now be sufficient to establish the company. However, more than 50 shareholders cannot be sought for limited liability companies while no such limit is brought by law for joint stock companies.

Board of Directors- Initial Procedure:

Limited Company type: Initial director(s) should be attained by the Article of Association. At least one shareholder should also be appointed as one of the

directors should there be more than one director.

Joint Stock Company type: Initial management board should be attained by Article of Association (for a period of 3 years). This management board can be constituted of 1 or more members.

For both types, the company’s core activities must be determined. Examples could be construction, tourism, food, export, import, etc. This can be up to 5 fields and is usually filled up to its limits to give most flexibility.

Please be reminded that every country has its own judicial system which may be quite complicated for foreigners sometimes, but can be made clear with the explanations and guides of a legal consultant. Should you wish to make a wise investment and search for options, establishing a company in Turkey may be the right answer for you.