By introduction of Turkish Direct Investment Act No.4875 [1] (“FIA”), all previously required permits for establishment of both limited liability and joint stock companies with foreign capital have been abolished. In other words, FIA does not foresee any distinction between a local company and a company with foreign capital. 

FIA does not impose any restrictions on the foreign capital and enables foreign investors to invest into Turkey by either establishing a new company or a branch or acquiring the shares of an already operating Turkish company without being subject to any kinds of pre-permissions which are generally sought solely due to the foreign character of the investment. 

The best foreword of this Section should be quoted as “there exists no difference between establishing a company with Turkish and foreign capital.” Therefore, after drafting and notarization of the articles of incorporation, one may apply to the Chamber of Commerce for the company’s registration with the relevant trade registry at a cost of maximum US$500. The registration transactions including the notarization process should not last more than three days. 

On the other hand, pursuant to the requirements of Turkish Commercial Code the basic differences between establishing a limited liability company and joint stock company are the minimum required number of shareholders and the minimum required amount of capital. The capital of a joint stock company should be at least YTL50,000 and number of its shareholders should not be less than five, where such requirements are YTL5,000 and two for the limited liability companies. 

Please note that the employers of the company (general manager, managers) that are not Turkish citizens should obtain both residential and work permits. Since the work permit cannot be obtained in absence of a residential permit, the foreign employee should in three months of the company’s date of establishment apply for a residential permit and for a work permit immediately after when the residential permit is issued.