FOR COMPANIES
Turkey, with its highly developed banking system, young and skilled labor force, and the ideal location to provide services to European, Asian, African and Middle Eastern markets is the go-to stop for a lot of foreign enterprises. The legal framework is also shaped in a manner to facilitate the relocation process of foreign companies and startups.
COMPANY TYPES IN TURKEY
Turkish legal system primarily allows for the incorporation of six different forms of company with varying advantages and disadvantages for the owners.
The major two forms of companies that provide limited liability for the shareholders are:
- Joint Stock Companies
- Limited Liability Companies
For the same reason, these are also the types of companies highly preferred by foreign investors.
The two types of companies differ from each other on fronts such as the required amount of capital contribution for incorporation, the liability of the shareholders against taxes, ease of share transfer, etc.
Incorporating a company takes on average 3 to 4 days. Based on the company type you would like to incorporate, the expenses can take up to TRY3,500 (appx. 7,000 Ukrainian Hryvnias)
ALTERNATIVES TO INCORPORATING A COMPANY
If you prefer not to set up a company in Turkey, you can still establish a
- Joint venture,
- Branch or
- Liaison Office
to conduct certain commercial or marketing activities
INCENTIVES FOR FOREIGN DIRECT INVESTMENTS
There are a lot of incentives for foreign investors under Turkish law. Based on various factors such as whether the company focuses on medium-high tech, in which city the investments will be made, how much money will be invested, and whether the investment will be made in one of the prioritized areas, etc, you may;
- be fully exempt from VAT and customs duty on the machinery and equipment to be purchased
- be partially or fully exempt from corporate tax of %23 (will be %20 as of 2023)
- be partially or fully exempt from paying the social security premiums of the employees be allocated land for investment
- be covered for high-skilled employee wages
- be partially covered for energy expenditures be supported up to 49% of the subscribed capital by the government be provided with a purchasing guarantee by the government
- be provided with cash support
- be provided with training support
- be provided with loans with reduced rates
- be exempt from property tax
- be exempt from stamp duty
- be exempt from special consumption tax
- be provided with tailor-made incentives
ARE YOU A STARTUP, AN R&D OR TECH COMPANY?
Turkey is a country highly preferred by startup companies and tech companies from all over the region. In the first quarter of 2022 only, startups in Turkey received around 1,25 billion dollars of investment. With this achievement, Turkey joined the same league as England, France, and Germany on a quarterly basis.
Startups, R&D companies, and tech companies may enjoy a lot of advantages and government incentives in Turkey
As a company, you can apply for one of the more than 1500 R&D and design centers or around 90 technoparks.
R&D CENTERS
If you are an R&D or a tech company with R&D activities, you may apply for an R&D Center. Upon admission
- your R&D and design expenditures become wholly deductible from the corporate tax base
- your employees will be exempt from income tax
- you will be partially exempt from paying the social security premiums of your employees
- you will be exempt from customs duty for machinery and equipment to be supplied from abroad
TECHNOPARKS
If you are a startup, R&D, or tech company with R&D activities, you may apply for a Technopark with a project which simply can be the product that you are developing.
Upon admission to a technopark, in relation to your project;
- you will be exempt from corporate tax of %23 (will be %20 as of 2023)
- your employees will be exempt from income tax you will be partially exempt from paying the social security premiums of your employees you are exempted from value-added tax
- you will be partially exempt from paying the social security premiums of your employees
- you are exempted from value-added tax on the services/products you sell
- you will be exempt from customs duty for machinery and equipment to be supplied from abroad
- likewise, the technoparks regularly bring companies with investors and other companies together for partnership and investment opportunities.
- employing foreign citizens becomes relatively easier
In a technopark, you may also be provided with free or discounted rents for very well equipped office rooms and buildings, inhouse experts and mentors from different fields such as intellectual property, business development, marketing, etc. which can help your business grow for free.
Likewise, the technoparks regularly bring companies with investors and other companies together for partnership and investment opportunities.
Our subsidiary company, Legaling, is also a technopark company. Therefore as Sanap & Co. we are highly familiar with the processes before and after admission to a technopark. We would also love to share our contacts and network in various technoparks, when you need.
WHY SHOULD YOU INVEST IN TURKEY?
EU AND CUSTOMS UNION
Turkey is a candidate country to EU. Therefore, it has undergone a lot of harmonization processes. Its legislation and bureaucratic structure are aligned with the EU, ensuring foreseeability for investors.
Turkey is part of the customs union with the EU, allowing the free movement of goods without any customs barriers. Low labor costs also provide a unique opportunity for multinational firms.
STRATEGIC POSITION
With its critical location in the middle of Asia, Europe, Africa and the Middle East and its developed transportation and communication systems,
Turkey offers a highly convenient spot for many multinational companies for managing their commercial activities in adjacent regions.
For this reason, many multinational companies and startups like Coca-Cola, Mercedes, Peak Games, Alibaba, etc. have establishments in Turkey.
STRONG RELATIONS WITH RUSSIA
Turkey has always been one of the countries with the strongest business and political relations with Russia.
The Double Tax Treaty between the two countries prevents the double taxation of any income accrued in one country, in the other. Russian citizens are exempt from visa for their stays in Turkey for up to 60 days.
RULE OF LAW
Turkey is a secular, civil law country with a developed judicial system.
Moreover, there are a lot of private experts in various fields who can help you with any legal or financial matter.
Should you request, you can also always refer your disputes to domestic or international arbitration. Our team at Sanap & Co. would be happy to help you with any of your disputes of any nature.
FOR INDIVIDUALS
Turkey provides a lot of unique opportunities and facilities for foreign individuals. It is chosen by millions of foreigners and expats each year both as a touristic destination and a place to abide for a long time. Turkey is among the top 10 countries in the world which is visited by the highest number of tourists and expats. Among the foreign visitors to Turkey, Russian citizens top the list.
HOW TO GET RESIDENCE PERMIT IN TURKEY
Russian citizens are exempt from visa for their stays in Turkey for up to 60 days. If you would like to stay in Turkey for a term longer than 60 days or exceeding the term granted in your visa, you should receive a residence permit. There are primarily six types of residence permits under Turkish law:
- Short term
- Long term
- Family
- Student victim of
- Human trafficking
- Humanitarian residence permit
Applications are made to Immigration Office (Göç İdaresi) online, followed by a face-to-face appointment with the same authority.
Based on the category of application, the documents to file may be among these:
- Application form
- Passport
- 4 biometric photos
- Proof of financial eligibility
- Health insurance policy
However, additional documents may as well be requested by the Immigration Office based on each case. During the application, there are expenses related to health insurance, notarization fees, application fees, etc. Although the total expenses vary based on various factors, it should not ideally exceed TRY 3,500 (appx. 20,000 Russian Rubles) excluding the attorney’s fee. The application is concluded in 90 days at most, although on average it takes much shorter. The application process can be quite confusing and challenging for a foreigner. Likewise, the rules of application change very often. Therefore make sure to pursue the process with the help of a lawyer if you do not want to lengthen the process or incur unnecessary costs. Our team of experts at Sanap & Co. can help you with all of your relocation processes.
HOW TO GET CITIZENSHIP IN TURKEY
It is possible to receive Turkish citizenship through multiple means. The means of nationalization in Turkey can be primarily condensed into two categories.
- Acquiring citizenship through the passage of time
- Acquiring citizenship through investments
NATURALIZATION THROUGH THE PASSAGE OF TIME
Foreigners can acquire Turkish citizenship through the passage of time primarily in two ways.
- By being a resident of Turkey for at least five years
- By being married to a Turkish citizen for at least three years
NATURALIZATION THROUGH INVESTMENTS
It is also possible to acquire Turkish citizenship without having to wait for a long time via directly making investments. There are different forms of investment that an individual can choose among from.
- Making an investment of $500,000 as capital to a company
- Buying real estate for a value of at least $400,000
- Employing at least 50 people in Turkey
- Depositing at least $500,000 at a bank in Turkey for a term of at least 3 years
- Buying government bills, bonds, or other governmental debt instruments with a value of at least $500,000 and keeping them for at least 3 years.
- Investing at least $500,000 in a real estate fund or a venture capital fund for a term of at least 3 years.
The said amounts can as well be invested in the equivalent amount of Ukrainian Hryvnias or other foreign currencies. The time necessary for making the said investments, collecting and drafting the necessary documents and making the application can take from 4 to 12 months. However, you can spend this time in Turkey if you have a residence permit which you can receive in less than 90 days. It should also be reminded that there is no need for a visa for the first 90 days either. The application process can be quite confusing and challenging for a foreigner. Therefore make sure to pursue the process with the help of a lawyer if you do not want to lengthen the process or incur unnecessary costs. Our team of experts at Sanap & Co. can help you with all of your relocation processes.
