From Italy to Turkey: A Comprehensive Guide to Company Formation and Required Documents
Why Is Turkey an Attractive Destination for Foreign Investors?
With its strategic location between Europe and Asia, a young and qualified workforce, growing economy, and access to regional markets, Turkey has become a top destination for foreign investors. Thanks to the Foreign Direct Investment Law (Law No. 4875), the process of starting a business has been significantly simplified, and foreign investors now enjoy the same rights and obligations as local ones.
According to Article 3 of this law:
“Unless otherwise stipulated by international treaties or special laws, foreign investors are free to make direct investments in Turkey, and they are subject to equal treatment as domestic investors.”
Step-by-Step Company Formation Process in Turkey
1. Choosing the Type of Company
Under the Turkish Commercial Code, foreign investors can establish any of the following company types:
- Limited Liability Company (Ltd. Şti.)
- Joint Stock Company (A.Ş.)
- General Partnership
- Limited Partnership
- Partnership Limited by Shares
- Cooperative
- Ordinary Partnership (Simple Partnership)
In practice, Limited Liability and Joint Stock Companies are the most preferred structures due to their flexibility, limited liability, and investor-friendly legal framework.
2. Required Documents
For foreign individuals:
- Passport copy (notarized and translated into Turkish)
- Turkish address and contact information
- Power of attorney if a representative will act on their behalf
For foreign legal entities (e.g., Italy-based companies):
- Certificate of activity (apostilled and in Italian)
- Notarized Turkish translation
- Board resolution authorizing incorporation in Turkey
- IDs and authorizations of company representatives
3. Drafting the Articles of Association
The company’s articles of association must include the company name, address, business activity, capital structure, and authorized representatives. This document must be signed and notarized.
4. Tax Registration and Competition Authority Fee
Before registration, a temporary tax number must be obtained. In addition, a Competition Authority fee equal to 0.04% of the capital must be deposited into the relevant bank account.
5. Capital Deposit and Bank Account
For Joint Stock Companies, at least 25% of the capital must be deposited in a Turkish bank before registration. For Limited Companies, this deposit can be completed within 24 months after registration.
6. Commercial Registry Application
All documents are submitted to the Trade Registry Office. Upon approval, the company is officially registered and gains legal personality.
7. Legal Books and Signature Circulars
Following registration, the company’s statutory books are certified and a signature circular is issued for authorized signatories. The company must also complete tax office registration and social security registration if applicable.
Comparison of Company Types for Foreign Investors
Limited Liability Company (Ltd.):
Requires a minimum capital of 10,000 TRY. 1–50 shareholders (natural or legal) allowed. Liability is limited to the capital commitment. All shareholders can be foreign nationals.
Joint Stock Company (A.Ş.):
Minimum capital is 50,000 TRY (recommended: 250,000 TRY). At least 1 shareholder. Shareholders’ liability is limited to their subscribed shares. Full foreign ownership is allowed.
General Partnership:
Only natural persons can be partners. Partners are fully and personally liable for company debts. No minimum capital required.
Limited Partnership:
Requires at least one general partner (unlimited liability) and one limited partner (limited liability). Limited partners can be foreign legal entities; general partners must be natural persons.
Cooperative:
At least 7 members. Partners can be individuals or legal entities. However, board members must be Turkish citizens.
Ordinary Partnership:
Formed by two or more parties for a common goal. No legal personality or capital requirement. All partners may be foreign.
Tax Liabilities and Incentives
- Corporate Tax: 20%
- Personal Income Tax (for individuals): 15% to 35%
- VAT: 1%, 8%, or 20%, depending on the sector
- Other taxes: Stamp tax, withholding tax, temporary tax, etc.
Turkey has signed Double Taxation Avoidance Agreements (DTAAs) with many countries, including Italy, to prevent investors from being taxed twice on the same income.
- Additional incentives may include:
- Corporate tax reductions
- Customs duty exemptions
- Investment site allocation
- VAT exemption
- Social security premium support
Work Permits and Legal Representation
Foreign shareholders or board members of Joint Stock or Limited Companies do not need a work permit.
However, foreign individuals establishing sole proprietorships must have at least 5 years of residence in Turkey and apply for a freelance work permit.
All incorporation steps can be completed by a licensed Turkish lawyer with a notarized power of attorney. Investors do not need to be physically present in Turkey.
Ready to Invest in Turkey?
Turkey offers foreign investors — including those from Italy — a legally secure and economically strategic environment. With equal rights, tax benefits, and operational ease, establishing a company in Turkey is not only feasible but highly profitable.
To ensure a smooth and successful incorporation process, consider working with legal and financial professionals who specialize in international company formation.