What Advantages Are Offered to Foreign Investors?

Foreigners who invest directly can equally benefit from the opportunities provided to domestic investors. While direct investment company in Turkey to open branches or partners to be done in the form of an existing company. On the other hand, there is no incentive for foreign investors in indirect investments made by buying stocks or bonds. For this reason, and only long-term foreign direct investment in Turkey can benefit from the facilities offered by the state. However, the profits from the activities of foreign investors in Turkey, sales, liquidation and compensation, licensing, management, and similar agreements are provided for earnings can be freely transferred abroad. In addition to all these foreigners who want to invest in Turkey; tax reductions, investment allocation, insurance premiums and similar government incentives.

What are The advantages of investing in Turkey for Foreigners ?

Rapidly growing young population, qualified labor force, due to its geographical and geopolitical position, Turkey is among the countries preferred by foreign investors. In 2003 enacted “Foreign Direct Investment Law” with the number of foreign investors and companies in Turkey has increased and continues to increase. With this law, the obstacles to foreign investors have been removed and many advantages have been provided to investors. Moreover, Turkish investors living abroad can benefit from these advantages. We therefore foreign investors and the advantages of investing in Turkey for Turkish citizens living abroad have compiled for you.

Establishing a Business in Turkey

Turkey’s Foreign Direct Investment (FDI) Law is based on the principle of equal treatment makes it possible to have the same rights and obligations as local investors and international investors.

The conditions for establishing and transferring shares are the same as those applied to local investors. Accordingly, international investors can establish all types of companies specified in the Turkish Commercial Code (TCC). TCC; It meets international standards, encourages private equity and IPO activities, providing transparency in government operations and business environment which makes Turkey’s compliance with EU legislation and EU accession process offers an approach to corporate governance.

Turkey has been based on the ease of doing business with reforms to improve the investment climate and thus removed realized bureaucracy experienced in company establishment procedures and costs are minimized. In this respect, the company’s organizations are now realized only in the Trade Registry Directorates operating in the Chambers of Commerce and designed as a “one stop office ve and can be completed on the same day.

Limited or Joint Stock Company in Turkey?

Limited or Joint Stock Company?

Since the most preferred types of companies are limited and joint stock companies, we will talk about these two types of companies. Both companies can be established with a minimum of one partner and the partners are limited to the capital they are committed to. The limited liability company can be established with a minimum capital of 10,000 Turkish Liras (TL) and a joint stock company with a capital of 50,000 TL. The initial capital of non-public joint stock companies that have accepted the registered capital system must be at least TL 100,000. In both types of companies, there is no hindrance for all or part of the partners to be foreign nationals.

Which type of company investors should prefer depends entirely on their expectations and current conditions. Our expert lawyers Katja Habermann and Buse Guide will be happy to assist you with which company has the most advantageous investment.

Tax Liabilities

Capital companies in Turkey (limited liability, joint stock company) as of 2017, 20% of the corporate tax payers. At the same time, individuals are obliged to pay income tax on their earnings and income during the year. Personal income tax rates vary between 15% and 35%. Residence, any of the companies or individuals with legal or business center in Turkey are taxed on their income both in Turkey and abroad. Otherwise, it is only taxable earnings and revenues obtained in Turkey. In addition, the payment of value added tax, special consumption tax and stamp tax comes into question. As a rule, a 15% tax deduction is required from the profit in case the shareholders are distributed at the end of the year.

The company or persons may also benefit from tax incentives, exemptions or exceptions. Within the framework of double taxation agreements, it is aimed to prevent the taxation of investors in both countries.

Companies Start advantageous for Foreigners in Turkey

That experts be advantageous to establish a company in Turkey for foreigners, it says Turkey’s 80 countries signed the agreement on prevention of double taxation.

 About the benefits of establishing foreign companies in Turkey; Turkey avoidance of double taxation with 80 countries signed the agreement. For foreigners it is advantageous to establish a company in Turkey.

Turkey was the preferred country for foreign investors, “Our country is located in a strategic position in the trade to be made to many of the world, a result of the activities of facilitating implementation in our country of foreign capital has led foreign investors preferred by coming into a country. Foreign entrepreneurs willing to invest in Turkey Direct Investment Law in fact can benefit equally from the rights granted to Turkish citizens. On the other hand, Turkey is still one of the most important centers of interest to entrepreneurs.

“Turkey has agreements with 80 countries to avoid double taxation”

Agreements have been signed with 80 countries to prevent double taxation. Accordingly, it is one of the important factors in choosing Turkey of foreign companies. In our country, as of 2017, Limited Liability Company and Joint Stock Company are 22 percent corporate tax payer. Turkey has signed an agreement on the prevention of double taxation with the aim of deducting one tax paid in any country from the tax payable in another country with 80 countries. In addition, Social Security Agreements were signed with 26 countries. Thanks to the Customs Union Agreement, which has been in force since 1996, trade with EU countries is possible without any customs restrictions ”.

Permission required from the Ministry of Economy ”

Foreign firms should obtain permission from the Ministry of Economy fetching wish to open an office in Turkey, “the foreign companies wishing to open a liaison office in our country must get permission from the Ministry of Economy. The first permit is granted for 3 years and can be extended after this period. ”

“5 different companies can be established”

Mostly Joint Stock Company or Limited Company is preferred.

In the Turkish Commercial Code, 5 different trading companies are defined as Limited Company, Collective Company, Limited Partnership Company, Joint Stock Company and Cooperative. These two companies can be established with at least one partner and the partners are limited to the capital they are committed to. The limited liability company can be established with a capital of at least 10 thousand TL and a joint stock company with a capital of 50 thousand TL. Non-public joint stock companies that have accepted the registered capital system must have a starting capital of at least TL 100 thousand. In both types of companies, there is no hindrance for all or part of the partners to be foreign nationals. ”