Company formation in Turkey
Turkey offers a natural gateway to three of the world’s largest and most dynamic markets: Europe, Asia and the Middle East. No wonder its economy is booming, up 34% over the four years to 2005, and still growing more than 5% per annum.
- The minimum share capital for a limited liability company is between 5,000 and 10,000 TL (US 3,200 – US6,400). However the recommended amount is 50,000 TL for non-Turkish Directors
- At least 25% of the authorized share capital must be paid up after the company is established.
- Minimum of one shareholder required.
- Minimum of one director required (may be either Turkish or Foreign)
- For non-Turkish clients who need a Work Permit the minimum requirement will be a physical office, as you will have to employ local staff
- To apply for a work permit you should aim to employ at least 5 – 8 local Turkish staff.
- A local Accountant must be appointed before company registration is complete. We can provide one.
- Company formation packages available. Ask now.
Turkish companies are best used for general trading purposes, especially for those aiming to enter the Middle East and Golf countries markets.
- CORPORATE INCOME TAX (CIT): The standard rate is 20%
- INCOMING DIVIDENDS:0% if Participation Exemption applies:
- the foreign company paying out dividends is a limited liability company;
- the Turkish company holds at least 10% of share capital for at least 12 months;
- the subsidiary company is subject to corporate income tax rate of at least 15% (for trading company) or 20% (for investment company);
- CAPITAL GAINS TAX (CGT): Participation Exemption applies to 75% of Capital Gains, if the conditions are met.
- WITHHOLDING TAX:
ROYALTIES: 15% which can be reduced under a Tax Treaty.
DIVIDENDS: 15% which can be reduced under a Tax Treaty.
INTERESTS: 0% if the entity is a Financing Company. Companies that do not qualify as financing pay 10% withholding tax on paid out interest.
- BILATERAL TAX TREATIES with 74 countries including UAE and Singapore.
- VALUE ADDED TAX (VAT). The standard rate for inland sales is 18%.