THE DUTIES OF THE FOREIGN WHO WANTS TO ESTABLISH A COMPANY IN TURKEY

THE DUTIES OF THE FOREIGN WHO WANTS TO ESTABLISH A COMPANY IN TURKEY

          First of all, foreigners want to establish a company or ply a trade in Turkey, they need agreement with Accountant Office about procedure.

TERMS OF COMPANY ESTABLISHMENT

           Firstly, they establish a joint-stock company or a limited company according to the work to be done. They can choose one of them. Turkish Commercial Code allows it. Moreover, these companies may have belonged a person completely.

           A person who wants to establish a company; can choose a foreign citizen as a member of the board of directors. Foreign person can establish a joint-stock company as a single person and can create member of the board of directors as a single person. Person does not have to be a Turkish citizen or residing in Turkey to become a member of the board of directors.

           On the other hand, foreign person may establish a limited company as a single person and may be manager of the company. However, manager of the company must have at least one corporate partner.

DOCUMENTS REQUIRED TO ESTABLİSH A COMPANY

           Independent accountant prepares the necessary documents for registration of Chamber of Commerce. In addition, Chamber of Commerce wants to:

1. Bank letter and receipt about 25% of cash capital has been paid.
2. Signature of members of the board other than shareholders about consenting    

      To the task. If the person is a Turkish citizen, must be declared ID number and   

      Residence address. If the person is a foreign, must be declared ID number or   

      Tax number. In addition, foreigners add a notarized copy of passport (3 pieces   

      Original) and notarized copy of residence permit certificate or work permit 

      Certificate (3 pieces original).

3. Partners and authorities in a company; If the foreign person, must be translated, notarized passport (3 pieces original) and add residence permit certificate or work permit certificate  (3 pieces original). If the Turkish citizens residing abroad ; copy of ID card, the country of residence permit certificate or work permit certificate (These certificate must be apostille stamped and translated by notary) and residence address in a foreign country by Birth

      Registration Office (3 pieces original).

4. Foreigners who have area of residence permit  in Turkey; must be declared a   

      Notarized photocopy of identity card.

5. The company’s partners and authorities photos (2 pieces).
6. Notarized of the signature circular to be used by a company representative (wet signature - 2 pieces original – 1 pieces copy).
7. Rental agreement of the place of establishment of company.

           These documents must be original. Copy documents do not accept by Chamber of Commercial.

           If the above-mentioned documents complete, foreign partner give power of attorney for somebody in Turkish consulate. In this case, foreign partner can be preparing requested documents from the notary in the Turkish consulate.

THE COSTS OF SETTING UP A COMPANY                 

           If the company is a limited, its capital of at least 10.000,00 Turkish Liras and if the company is a joint-stock company, its capital of at least 50.000,00 Turkish Liras. These are the lowest legal limit so, it might be higher. When the establishment of the company, ¼ of the capital blocked into bank account. After the establishment of the company, this amount is withdrawn. The company’s registers of the chamber of commercial and notary costs amount of USD 3.000,00.

           In addition, independent accountant should be paid monthly and annual fees.

This amount varies according to the work. However, beginning at least 250-300 USD monthly amounts.

TAXES APPLIED IN TURKEY

1.  VALUE-ADDED TAX

There are three rates of value added tax.

• The rate of 1% in these trade areas :

1.  Bakery products.
2. Grain trade.
3. Livestock trade.
4. Trade in fruit and vegetables connected to the municipality.
5. Funeral services

• The rate of 8% in these trade areas :

1. Foodstuff and non-alcoholic beverages for sale.
2. Poultry and eggs.

c.   Hotel accommodation fees.

• 18% Value-added tax apply for all jobs outside of these areas.

2. CORPORATİON TAX

          The company paid an annual profit arising calculating income and expenses. The rate of corporation tax is %22. The tax is paid four times a year every three months.

3)  INSURANCE PREMIUM AND WITHHOLDING TAX

                Over the monthly minimum wage for the company’s employees and withholding tax deducted insurance premiums. (For 2018, gross fees: 2.029,50TL).

This rate for insurance premium 37, 5% (20, 5% employer 17% employee). 15% deductions made from the employee for withholding. After deducting this amount, net wages paid to employees (for 2018 net fees: 730,00 TL).