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MisakLex • Corporate law • Updated: 13 September 2026
When starting a business in Türkiye, the structure’s fitness for the business’s future matters as much as completing formation promptly. An investor building a manufacturing plant, a foreign company assembling a Turkish sales team, and an entrepreneur expanding a family business with two partners do not have identical legal needs. A choice that seems easy initially may require costly restructuring when a new investor joins or one partner leaves.
This article examines joint-stock and limited liability companies, foreign-company branches, and liaison offices from the perspectives relevant to choosing among them. Formation costs are not the only question: Who will sign contracts, who will bear commercial risk, how will management work, and how will growth be financed? Both investors from Russia, Uzbekistan, or elsewhere and domestic investors should choose their structure according to these questions.
1. First distinction: A Turkish company or a branch of a foreign company?
A joint-stock or limited liability company formed in Türkiye under the Turkish Commercial Code is a legal person separate from its shareholders. This remains true even if all shareholders are foreign. For example, a limited liability company formed in Türkiye by an Uzbek manufacturer is a separate company that contracts in its own name and owns its own assets. A Turkish branch of a foreign parent, by contrast, acquires no separate legal personality; it operates as part of the foreign company’s organization. 1, 21,2
This difference affects whom creditors can pursue and how the investment is managed. The legal link between the headquarters and Turkish operations is direct for a branch. For a subsidiary, the parent’s liability is assessed separately under the company form, any security it gave, its conduct in management, and special statutory rules. Thus, opening a branch does not entirely separate Turkish risk from headquarters. Forming a separate company also does not invariably release its parent or managers from liability.
The general framework for foreign investment in Türkiye is equal treatment with domestic investors, subject to statutory exceptions and international agreements. Sectoral rules apply separately in banking, insurance, and other regulated fields. An investor’s nationality alone does not confer lower capital requirements or automatic operating permission. Freedom to form a company must be distinguished from licences required to conduct a specific business. 33
2. What needs does a joint-stock company meet?
A joint-stock company is worth considering where admission of investors, ownership structure, and corporate governance become important. It can be formed by one shareholder. Its board manages and represents it, while statutory powers of the general meeting remain distinct. Share ownership does not itself authorize a person to sign contracts for the company. Board membership, authority to represent, and share ownership are separate capacities. 11
If new investors are contemplated, share classes, voting rights, management representation, and transfer restrictions should be considered at formation. Yet not every desired arrangement may be put in the articles. Mandatory provisions of the Turkish Commercial Code and any capital markets rules set limits. A foreign-language investment agreement downloaded online should not be assumed to produce identical effects in Türkiye.
Suitability of a joint-stock company depends on more than business size. Plans for a later share sale, fresh financing, or several investor groups may also matter. Conversely, turning a small owner-managed business into a joint-stock company simply because it seems “more prestigious” may impose needless governance burdens. The decision should consider recurring operations and the expected investment plan as well as formation expenses.
3. When might a limited liability company be considered?
A limited liability company may suit a business whose ownership relations remain within a smaller circle. It may have one shareholder but no more than fifty. Managers conduct management and representation, and at least one shareholder must have a management right and authority to represent. This form cannot be chosen on the assumption that an external manager alone will be appointed and all shareholders wholly removed from management. 1, 41,4
The form of share transfer and company approval are important in a limited liability company. Besides the statutory written agreement and notarized signatures, general meeting approval must be considered unless the articles provide otherwise. An investor’s assumption that “I can sell my share to anyone whenever I wish” should therefore be tested before formation. Agreements between shareholders on exit, valuation, and transfer can reduce the likelihood of disputes. 11
Public debts are another significant difference. A limited liability company shareholder may be liable in proportion to their share for certain public receivables. The risk is not restricted to shareholders who are managers. When comparing forms, commercial debts, taxes and other public claims, managerial liability, and personal security must therefore be addressed together. The word “limited” in the name does not conclusively exclude personal liability for every debt. 55
4. How should minimum capital and payment deadlines be read?
Since 1 January 2024, the general minimum registered capital has been TRY 250,000 for joint-stock companies and TRY 50,000 for limited liability companies. For non-public joint-stock companies adopting the registered capital system, the minimum initial capital is TRY 500,000. These are general minimums; specific business sectors may require more capital or other conditions. 6, 76,7
In a joint-stock company, at least one quarter of subscribed cash capital is paid before registration and the remainder within twenty-four months following registration. In a limited liability company, all subscribed cash capital may be paid within twenty-four months after registration; the pre-formation quarter-payment rule for joint-stock companies does not apply. Earlier payment terms in the articles must be observed. Contributions in kind, meaning specified assets instead of money, follow separate valuation and eligibility rules. 1, 41,4
Minimum capital is not a formation fee; it is a resource committed to the company. Nor does it reflect the business’s actual financing need. A business with high rent, staffing, inventory, and licensing costs may face a cash shortage if it starts with only the statutory minimum. Records should also make clear whether extra money sent by a shareholder is capital, a loan, or an advance. Ambiguous transfers may later become disputes over debts between shareholders.
5. Branches and liaison offices serve different purposes
A Turkish branch may be used to conduct a foreign company’s commercial activity in Türkiye. Formation requires attention to documents on the foreign parent’s existence, resolutions, representation arrangements, and the representative authorized in Türkiye. The branch can earn income; however, its lack of separate legal personality matters for debts and litigation. Tax consequences should also be examined in light of the activity and applicable international treaties. 22
A liaison office is a different structure permitted on condition that it conducts no commercial activity. It may be suitable for market research or specific representative and coordination work; it cannot replace a business that makes sales in Türkiye. If the foreign company plans to find customers here, participate in contract processes, and earn income, the proposed activities must be checked against permitted limits in advance. 33
For example, a Russian company might plan limited representation to learn the Turkish market. If that company will instead hold stock and make regular sales and invoices in Türkiye, another structure may be needed. The activity actually performed, not the office sign or headcount, determines the appropriate form. The form should be reviewed again if activities expand after the initial phase.
6. Documents and permits for a foreign shareholder
A foreign individual and a foreign company do not require the same documents to become shareholders. For a corporate investor, incorporation and current existence documents, a resolution of the competent body, representation documents, and signing authority are especially important. Certification or apostille requirements for use in Türkiye depend on the country of issue and applicable agreements. The need for Turkish translation is checked document by document. 2, 82,8
If formation by power of attorney is planned, a bare statement of authority “to form a company” may be insufficient. The scope of power should be examined for subscribing capital, signing the articles, accepting appointment as manager or board member, and dealing with relevant bodies. Failure to comply with the founder company’s internal decision rules abroad may complicate Turkish formalities too.
Forming a company or buying shares does not automatically give a foreigner the right to work or reside in Türkiye. The shareholder’s actual role, presence in Türkiye, and statutory exemptions must be assessed separately. Ministry guidance distinguishes the work-permit framework for shareholder-managers of limited liability companies and shareholder-board members of joint-stock companies from the exemption framework for non-resident joint-stock company board members and shareholders without a managerial role. 99
7. Plan for the business’s future in its founding documents
Equal shares between two partners do not ensure easy decision-making. Representation rules, approval mechanisms for particular transactions, information sharing, profit policy, and what happens if one partner wants to leave should be discussed beforehand. A balance suitable to the business can be struck between a system that blocks routine payments and one that leaves all authority with one person.
A shareholders’ agreement may elaborate on these issues but does not have the same legal effect as the articles of association. Breach of an undertaking between the parties does not always invalidate a company decision. The parties should design which provisions belong in which document, within which limits, especially where they affect corporate bodies and third parties. For documents in several languages, the prevailing language and meaning of terms should be clear. 1, 101,10
8. Operations to complete after registration
Trade registry registration does not mean all business obligations have been completed. Operating licences, tax and social security steps, bank accounts, accounting arrangements, contracts, and communication of representation powers to institutions should be planned together. For foreign-invested companies, direct foreign investment notification duties must be tracked separately from the formation file. 33
It is especially important that initial contracts be made in the correct company name. A lease signed personally by the founder, a trademark they purchased, or a customer contract they concluded should not be assumed to pass automatically to the new company. Pre-formation undertakings and the company’s assumption of them require separate review. Otherwise, business may be carried on through the company while fundamental rights remain with the founder. 11
9. Link the formation decision to a concrete business plan
If two partners will conduct local sales in Türkiye, they should first decide whether they will work in the business and how they will share earnings. If a foreign manufacturer will market only its own products in Türkiye, the terms of its supply relationship with headquarters should form part of the plan. If it later expects external investors, the fact that they would acquire shares in a separate company, not in a branch, affects the choice.
Changing the structure as the business plan changes may be possible, but the transition should not be assumed automatic or cost-free. Contract transfers, permits, tax consequences, and corporate decisions may arise. Discussing expected growth from the outset can reduce later conversion costs. The lowest formation expense and the most suitable long-term structure are not always the same option.
Before a formation consultation, it is useful to prepare a description of activities, share percentages, approximate funding need, management arrangements, and planned first contracts. If a foreign legal entity will be a shareholder, its authority documents should also be checked ahead of time. The decision will then reflect the actual business rather than an abstract comparison of joint-stock and limited liability companies.
Conclusion: Design the structure around the business
A sound choice of entity considers investment size, relations between shareholders, commercial risks, and likely future changes together. Bringing the business plan, ownership breakdown, proposed managers, funding source, and foreign investor documents to the consultation makes the assessment concrete. Formation then becomes a start that supports sound operations, rather than merely an entry in the register.
This article is for general information. Sector licences, tax effects, and the investor’s individual permit position require separate assessment under the specific business model.
Sources
Sources checked on 13 September 2026. Numbers in the text refer to the sources below.
[1] 6102 sayılı Türk Ticaret Kanunu. Relevant corporate-law provisions; legislative text with amendment notes, KS Law Mevzuat Access source
[2] Presidency Investment and Finance Office. Türkiye’de İş Kurmak. Documentation and procedure framework for establishing companies and branches Access source
[3] 4875 sayılı Doğrudan Yabancı Yatırımlar Kanunu, in particular Articles 3–4. LEXPERA consolidated legislative text Access source
[4] Ministry of Trade. Şirket Bilgileri. Company types, capital payments, and groups of companies Access source
[5] 6183 sayılı Amme Alacaklarının Tahsil Usulü Hakkında Kanun, Article 35 and repeated Article 35. Legislative text with amendment and annulment notes Access source
[6] Ministry of Trade, General Directorate of Domestic Trade. Anonim ve Limited Şirketlerde Asgari Sermaye Tutarları Artırılmıştır. Announcement concerning Presidential Decision No. 7887 Access source
[7] Ministry of Trade. Şirketler Hakkında Sıkça Sorulan Sorular. Current explanation of minimum capital Access source
[8] Istanbul Chamber of Commerce. Limited Şirketler: kuruluş ve tescil işlemleri Access source
[9] Ministry of Labour and Social Security. Çalışma İzni Sıkça Sorulan Sorular, question 31. Foreign shareholders and board members Access source
[10] 6098 sayılı Türk Borçlar Kanunu. In particular Articles 26–27, 112, 202, and 581–603. Legislative text with amendment notes Access source