How to start a business in Turkey

Preface

Turkey, a bridge between Europe and Asia, has become an attractive destination for entrepreneurs and investors worldwide. Known for its vibrant economy, strategic location, and young workforce, Turkey offers immense opportunities for starting a business. Whether you’re planning to tap into its thriving industries or explore its emerging markets, establishing a business in Turkey can […]

Why Start a Business in Turkey?

Turkey is a land of opportunity for entrepreneurs, offering a combination of economic strength, strategic location, and government-backed incentives. For those seeking a gateway to both established and emerging markets, Turkey is a compelling choice. Here’s why:

Economic Strengths

Turkey’s economy is diverse and dynamic, driven by thriving industries such as manufacturing, tourism, agriculture, construction, and technology. As one of the top global producers in sectors like textiles, automotive, and electronics, the country has established itself as a critical player in international trade.

Turkey’s startup ecosystem is growing rapidly, particularly in major cities like Istanbul and Ankara, which have become hubs for innovation. Entrepreneurs can benefit from Turkey’s large domestic market, characterized by an increasingly tech-savvy population, as well as its competitive labor costs compared to many European nations.

Moreover, Turkey’s renewable energy sector and sustainable agriculture initiatives present forward-thinking entrepreneurs with opportunities to contribute to critical global challenges while building profitable businesses.

Strategic Location

Turkey’s geographic position is unmatched, acting as a natural bridge between Europe, Asia, and the Middle East. With access to nearly 1 billion consumers within a 4-hour flight radius, businesses operating in Turkey can efficiently reach diverse markets. The country’s well-developed logistics infrastructure—including modern highways, ports, and airports—further enhances its appeal as a regional trade hub.

For foreign businesses, Turkey serves as a springboard into both the European Union market and Middle Eastern economies. This dual access is particularly beneficial for companies looking to diversify their consumer base or supply chain.

Incentives for Entrepreneurs

Turkey’s government has implemented numerous policies to attract and support entrepreneurs, making it easier for new businesses to thrive. Some of these incentives include:

Tax Reductions in Free Zones: Businesses operating in Turkey’s free zones can enjoy significant tax benefits, including exemptions on corporate taxes and customs duties.
R&D and Innovation Support: Turkey prioritizes innovation, offering grants, tax advantages, and reduced social security contributions for research and development projects.
Startup Funding Programs: Entrepreneurs have access to funding through government initiatives, private equity, and angel investors. Programs like TÜBİTAK and KOSGEB provide financial and technical assistance to startups.
Investment in Priority Sectors: The Turkish government offers tailored support to businesses in sectors such as technology, renewable energy, and tourism, providing additional incentives like land allocation and lower utility costs.

These factors, combined with a business-friendly environment and continued economic reforms, make Turkey an ideal choice for establishing a business.

Choosing the Right Business Structure in Turkey

How to start a business in Turkey - 2025 Full Guide

Selecting the appropriate legal structure is a fundamental step in starting a business in Turkey. The structure you choose will determine the level of liability, capital requirements, and operational flexibility for your business. Here are the primary options available:

1. Sole Proprietorship (Şahıs Şirketi)

A sole proprietorship is ideal for individuals or small-scale businesses. It offers simplicity in setup and operation, making it a popular choice for freelancers and single-owner enterprises.

Advantages: Straightforward registration process, low administrative costs.
Disadvantages: The owner bears unlimited personal liability for all debts and obligations of the business.

2. Limited Liability Company (Limited Şirket)

The Limited Liability Company (LLC) is the most common choice for entrepreneurs in Turkey due to its balanced flexibility and protection.

Minimum Capital Requirement: 10,000 TRY.
Ownership Structure: Can have up to 50 shareholders.
Liability: Limited to the capital invested, protecting personal assets.
Suitability: Perfect for small to medium-sized businesses looking for liability protection and structured operations.

3. Joint-Stock Company (Anonim Şirket)

This structure is designed for larger enterprises that require significant capital and may plan to go public.

Minimum Capital Requirement: 50,000 TRY.
Ownership Structure: No limit on the number of shareholders.
Advantages: Shares can be traded publicly, allowing access to additional capital through the stock market.
Liability: Shareholders’ liability is limited to their shareholding.

4. Branch Office

Foreign companies looking to extend their presence in Turkey often opt for a branch office.

Features: Operates under the parent company’s name and legal framework.
Benefits: Offers a straightforward way to establish a presence in Turkey without creating a new legal entity.
Drawbacks: The parent company remains fully liable for the branch’s activities.

Steps to Start a Business in Turkey

1. Conduct Market Research

Before diving into business operations, it’s essential to thoroughly understand Turkey’s market environment. Utilize tools like industry reports, local consumer behavior studies, and competitor analysis. This step helps identify your niche and ensures your business aligns with market demands.

2. Prepare a Business Plan

A well-structured business plan remains a cornerstone for success. Include key components like:

Objectives: Define your short-term and long-term goals.
Market Strategy: Identify your target audience and unique selling proposition (USP).
Financial Projections: Create realistic revenue and cost estimates.
Operational Plans: Detail how the business will be structured and managed.

This document will not only guide your operations but is also critical when applying for loans or attracting investors.

3. Register Your Business

Registering a business in Turkey involves several key steps, now streamlined by digital platforms introduced by Turkish authorities.

Steps to Register:

Company Name Reservation: Reserve your unique company name through the Trade Registry Gazette. Ensure it complies with Turkish naming regulations.
Draft and Notarize Articles of Association: Collaborate with a lawyer to prepare the document and notarize it at a public notary office.
Submit to the Trade Registry Office: Provide the following documents:
- Articles of Association.
- Tax Identification Number (TIN).
- Proof of the initial capital deposit (see minimum requirements below).

Updated Costs and Timelines:

Registration Timeline: Typically 2–3 business days, barring complications.
Fees:
- Sole Proprietorship: Approximately 5,000–7,000 TRY.
- Limited Liability Company: Around 12,000–15,000 TRY, inclusive of notary and administrative fees.
- Joint-Stock Company: Starts at 20,000 TRY, reflecting its higher complexity.

Ensure you also allocate funds for legal and consulting fees, which can range from 5,000–10,000 TRY depending on the complexity of your setup.

4. Obtain Licenses and Permits

Different industries in Turkey require specific permits and licenses. Examples include:

Food and Beverage: Health and hygiene permits from local municipal offices.
Retail: Operating permits and trade licenses.
Construction: Building and environmental permits.

Costs for licenses vary by sector but generally range between 1,000–5,000 TRY. Check with local authorities to confirm specific requirements for your business type.

5. Register for Taxes

All businesses must register with Turkey’s Tax Office for compliance. Key tax obligations include:

Value Added Tax (VAT): 1% for essential goods, 8% for some services, and 18% for most standard products.
Corporate Tax: Fixed at 20% of net income.
Social Security Contributions: Generally 34.5% of gross salaries, split between employer and employee.

Tax registration is free, but you’ll need to budget for ongoing filing and accounting services.

6. Open a Business Bank Account

A business bank account is mandatory in Turkey for financial operations and tax compliance. When opening an account:

Provide the registration certificate, TIN, and notarized Articles of Association.
Deposit the initial capital: 10,000 TRY for LLCs or 50,000 TRY for JSCs (minimum requirements as of 2025).

Banks may charge setup fees ranging from 500–1,000 TRY, depending on the provider.

7. Hire Employees and Comply with Labor Laws

Turkey’s young, skilled workforce is an asset, but you must adhere to labor regulations:

Minimum Wage (2025): 14,000 TRY/month gross.
Employment Contracts: Written agreements are mandatory.
Social Security Registration: Employers must register employees with the Social Security Institution (SGK).

Employee benefits like healthcare, pensions, and severance pay should also be factored into costs.

8. Promote Your Business

Marketing strategies in Turkey vary by industry but commonly include:

Social Media Campaigns: Platforms like Instagram, TikTok, and LinkedIn are widely popular.
Networking: Join local business chambers or industry-specific associations.
Trade Shows: Participate in expos to connect with potential clients and partners.

Annual marketing budgets can range from 10,000–50,000 TRY depending on your business size and strategy.

Obtain Licenses and Permits

Starting a business in Turkey often requires industry-specific permits and licenses. These vary depending on the nature of your operations. For example, businesses in food production, healthcare, education, and real estate must meet sector-specific regulations.

Steps to Obtain Licenses:

Research which licenses are required for your industry through local municipalities or government agencies.
Prepare necessary documentation, such as business registration certificates, Articles of Association, and proof of compliance with safety or environmental standards.
Submit your application to the relevant authorities and pay associated fees.

Cost Range (2025): Licensing fees typically range from 1,000 TRY to 7,500 TRY, depending on the business type and industry. Delays are common in industries with stringent regulatory standards, so early preparation is crucial.

Register for Taxes

All businesses in Turkey must register with the Tax Office. Tax obligations depend on the nature and scale of your business.

Key Tax Requirements:

Value Added Tax (VAT): 1% for basic goods, 8% for specific services, and 18% for standard goods.
Corporate Tax: Maintained at 20% of net profit for 2025.
Social Security Contributions: 34.5% of gross salaries, shared between employer and employee.

After registering, you will receive a Tax Identification Number (TIN), which is required for all financial transactions. Hiring a certified accountant can ensure tax compliance and minimize errors in filing.

Open a Business Bank Account

A business bank account is essential for managing finances and meeting tax obligations in Turkey. Choose a reputable bank that offers services tailored to business needs, such as foreign exchange options or financing support.

Required Documents:

Business registration certificate.
Tax Identification Number (TIN).
Notarized Articles of Association.
Proof of address for the company.

Bank Setup Costs: Initial account setup fees typically range from 500 TRY to 1,500 TRY. Additionally, you must deposit the required minimum capital, which is 10,000 TRY for LLCs and 50,000 TRY for JSCs.

Hire Employees and Comply with Labor Laws

Turkey’s workforce is known for its youthful energy and skills. However, employing workers requires strict compliance with Turkish labor laws.

Key Requirements:

Draft written employment contracts outlining job roles, salaries, and benefits.
Register employees with the Social Security Institution (SGK).
Ensure compliance with minimum wage regulations and overtime laws.

Updated Minimum Wage (2025): 14,000 TRY gross per month. Additional costs, including social security contributions and healthcare provisions, must be factored into your budget.

Promote Your Business

Marketing in Turkey’s competitive business environment requires a blend of traditional and digital strategies.

Effective Strategies:

Utilize social media platforms like Instagram, LinkedIn, and TikTok to connect with Turkey’s tech-savvy consumers.
Build networks through chambers of commerce and trade associations.
Participate in industry-specific trade fairs and expos to showcase your offerings and build partnerships.

Marketing Costs: Depending on your budget, annual expenses can range from 10,000 TRY to 50,000 TRY, with digital marketing often being the most cost-effective channel.

Challenges and Solutions

Bureaucratic Hurdles

Turkey’s administrative processes can be complex and time-consuming. To navigate these effectively, consider hiring a local consultant or legal expert familiar with the requirements.

Language Barriers

Turkish is the dominant language in business settings. Employing bilingual staff or learning basic Turkish can enhance communication and foster local relationships.

Opportunities for Foreign Investors

Thriving Sectors:

Technology and Startups: Istanbul and Ankara are thriving innovation hubs with a vibrant startup ecosystem.
Tourism: With millions of annual visitors, opportunities abound in hospitality, travel services, and cultural experiences.
Renewable Energy: Turkey’s focus on sustainability has created openings for solar, wind, and hydropower projects.

Government Incentives:

Programs like TechnoPark and Invest in Turkey provide tax exemptions, grants, and other support for foreign businesses.

Conclusion

Turkey’s unique position as a bridge between Europe and Asia, combined with its robust economy and government support, makes it a prime destination for entrepreneurs and investors. With opportunities across diverse industries like technology, tourism, and renewable energy, Turkey offers a fertile ground for businesses looking to innovate and expand. The country’s strategic location provides access to a vast market, while incentives such as tax breaks and grants further enhance its appeal to both local and foreign investors.

By carefully planning, adhering to updated regulations, and leveraging available resources, you can successfully establish and grow a business in Turkey. Whether you’re entering a thriving industry or introducing a fresh concept to its dynamic market, Turkey’s potential for growth and innovation is unmatched. Take the first step by exploring market opportunities, registering your business, and building a foundation for long-term success in this vibrant economy.