There are around 47,000 international companies in Turkey. The government treats all the investors equally and provides investors with competitive investment conditions with a well-developed industrial and service culture. The government also introduced new laws for investors, making it easier for them than ever to get Turkish Citizenship by investment. It is ranked as the 8th most popular destination. It is soon to enter the top five most visited countries and can provide fertile ground for new businesses.
The Process to Start a Business in Turkey
Turkey's law gives equal rights and treatment to foreign investors as to local investors. Before setting up your business in Turkey, there are a few procedures you need to complete, and you need to do your research before investing, and it is essential to take legal advice. Foreigners can consider setting up collective companies, joint-stock companies, liaison offices, or a branch of an already established company.
Setting up a business in Turkey is a quick step, and the investor can start trading within the next week. The first step is drafting the articles of association conforming to article 279 of the Turkish commercial code, signed by the company directors.
The investor needs to state their name, surname, nationality, address, and trading address in the application form. The document is notarized officially and translated if necessary. The registration process can begin after the investor deposits the minimum share capital in the bank account in the company name, paying a fee to the Turkish Commercial Registry Office.
The office will issue a registration certificate, and the company's incorporation will be published in the Turkish newspaper. Lastly, the company needs to be registered for VAT with the tax authority.
Can Foreigners Set Up a Limited Company in Turkey?
Setting up a limited company is the most popular form of business for foreigners. Two or more foreigners can set it up, as at least one shareholder needs to form this type of company with a minimum share capital of 10,000 TL.
Consultancy in the Establishment Process
You need to take legal advice from legal entities before setting up and investing in a business. It is significant to employ an excellent legal advisor, well-educated about Turkish company laws, and having experience helping foreigners who want to set up a company in Turkey. You can look through these articles: The Turkish Embassy, British Chamber of Commerce Turkey, The Turkish British Chamber of Commerce and Industry.
Areas for Business Activities in Turkey
Turkey is rapidly emerging in investment and business markets and is Europe's sixth-largest economy for economic growth. Turkey's talented workforce, low setup costs, and location attract foreign investors for business opportunities. The sectors you can invest in are the Construction sector, automotive and metals, IT, Environment, Energy, Agriculture, Textile, Finance, and Tourism.
It is essential to define the regions to invest in before starting a business in Turkey. The four best provinces to start a business are:
The Marmara Region is where Asia meets Europe. It is famous for manufacturing, especially the cities such as Istanbul, Bursa, and Kocaeli. It has been an economic power of the country for a long time.
You can purchase textiles, cement, paper, chemical products, processed food, and so much more. %73 of Turkey's sunflower and 30% of corn, oil, and wine are produced in Marmara Region. Since the Marmara Region is strong in manufacturing, international trade, and tourism, it is one of the most attractive areas to start a business in Turkey.
Black Sea Region
If your business is related to food, the Black Sea region's climate makes it a prime location for commercial agriculture. The Black Sea Region has major seaport transportation and is home to the light industry zone that manufactures medical products, chemicals, and automobile parts.
With tea plantations in the Black Sea region, Turkey is the 6th most tea exporter country. Since the Black Sea region meets approximately 65-70% of the world's hazelnut production and 70-75% of its exports, Turkey is 1st in producing and exporting hazelnut. Zonguldak city in the Black Sea region has become the major coal production center in Turkey.
It contains precious touristic destinations such as Bodrum, Cesme, Marmaris, and world heritage sites such as Ephesus, Bergama, and Pamukkale. This region provides more than 70% of fig and olive production, more than half of tobacco, and nearly half of grape production.
The most famous city in the Aegean Region is Izmir. It is well connected with other regions; for example, it is 45 minutes away from Istanbul by car and has overnight ferry and bus options. Izmir is the engine of economic development, being Turkey's commercial hub.
Central Anatolian Region
Wheat production is usually done in the Central Anatolia Region. Being the capital of Turkey, Ankara is the perfect destination for trade as it is centrally located in Turkey's transportation networks.
Turkey's largest industrial park, OSTIM Industrial Zone, is in Ankara, specializing in small business trade with 5,000 companies and 50,000 employees. This industrial zone will surely provide value to your business. Access to transportation, industrial potential, and agricultural possibilities make the region one of the most attractive for foreigners when they start a business in Turkey.
Turkish Citizenship for Foreign Investors
The Turkish government has made it easy for foreigners who want to be business owners in Turkey to acquire Turkish Citizenship if they invest in property of about $400,000. Therefore, in addition to benefits related to business, when you start a business in Turkey, the door to Turkish Citizenship opens to you as well, if you desire.
Other ways apart from property investment to acquire Turkish Citizenship are:
- Employ at least 50 people in your company
- Fixed capital investment of at least $500,000
- Deposit $500,000 into a Turkish account
- Venture capital investment fund worth $500,000
Rise of Foreign Direct Investment
Turkey received 3.93 billion dollars in foreign direct investment, with nearly 3.2 million dollars in the service industry last year. With many foreigners looking to invest in a business in Turkey, there is an increase in Turkey's direct foreign investment. Most sectors like finance, manufacturing, and energy attract the highest amount of FDI.
Setting Up Business in Turkey: Advantageous In Many Ways
As you can see, it is highly appealing for investors to start a business in Turkey with its many opportunities, geographical advantages, and high-skilled, low-cost, passionate, young labor force.
The combination of encouraging laws for foreign investors setting up business in Turkey and considerably lower costs make it even more desirable. Thus, considering all these advantages, you may want to take the first steps to start a business in Turkey.
Frequently Asked Questions
1. Can someone start a small business in Turkey?
Yes. Turkey, one of the world's fastest-growing economies, is one of the best places to expand your business. The country attracts foreign investors from all over the world due to its thriving economy, geopolitical position, promising growth opportunities, the hardworking business community, and young population.
2. What are the advantages of starting a business in Turkey?
One of the advantages of starting a small business is financial gain. Turkey offers many advantages to foreigners with its low operating costs, highly skilled labor force, stable consumer spending, and tax incentives.
3. Is it easy to start a business in Turkey?
The company incorporation process in Turkey is relatively simple, and the investor will be able to begin trading within a week if everything is in order. The minimum share capital needs to be deposited in the corporation's name in a bank account.
4. Is it safe to do business in Turkey?
On the ease of starting a business, Turkey ranks 77th out of 190 economies. Turkey ranks 61st out of 140 in the Global Competitiveness index 2018 compiled by the World Economic Forum. In 2018, Turkey was ranked 78th out of 180 countries in Transparency International's corruption indicators.
5. What business is Turkey known for?
Turkey has the world's 18th largest nominal GDP and the 15th largest GDP in purchasing power parity. The country is a global leader in agricultural products, textiles, motor vehicles, vessels and other transportation equipment, construction materials, electronic goods, and household appliances.
6. In Turkey, what should I invest in now?
5 Best Sectors to Invest in Turkey:
1) Information Technology and Technology
2) Construction and Real Estate
3) Textiles and Ready-to-Wear Clothing
4) Energy and Natural Resources
5) Environment and Recycling
7. Is it safe to invest money in Turkey?
The Turkish economy has faced numerous roadblocks, such as political instability. But it has remained firm and persists in providing a trusted environment for investors, making it the safest hub for foreigners interested in investment opportunities.
8. Why should we invest in Turkey?
Turkey is known for its hospitality and geopolitical location, which has made it a valuable center for inviting local and foreign investors in different sectors, particularly the tourist industry and real estate sectors, which have piqued investors' interest.
9. Does Turkey welcome foreign investors?
The legislation governing foreign investments in Turkey complies with international standards, and all foreign investors are welcome in this country without discrimination.