Foreign investors can choose between several types of companies in Turkey, depending on the nature and scale of their planned operations. Choosing between the different types of companies in Turkey affects not only the incorporation process, but also management, shareholder liability, capital requirements, future share transfers, investment structure and exit planning.
For most foreign investors, the practical choice is between a Limited Liability Company (Limited Şirket or Ltd. Şti.) and a Joint Stock Company (Anonim Şirket or A.Ş.). Both can be established with 100% foreign ownership and both can conduct most commercial activities in Turkey.
However, they are not the only ways for a foreign company to establish a presence in Turkey. Depending on the intended activities, a foreign company may instead establish a branch office or, where no commercial activity will be carried out in Turkey, apply for permission to establish a liaison office.
This guide compares the main company types and alternative structures available to foreign investors and explains when each structure may be appropriate.
What Are the Main Types of Companies in Turkey?
The Turkish Commercial Code No. 6102 recognizes several forms of commercial company.
The principal structures include:
- Joint Stock Company (Anonim Şirket – A.Ş.)
- Limited Liability Company (Limited Şirket – Ltd. Şti.)
- Collective Company
- Commandite Company
- Partnership Limited by Shares
Cooperatives are also separately regulated corporate structures.
In practice, however, Joint Stock Companies and Limited Liability Companies account for the overwhelming majority of structures relevant to foreign corporate investors. Turkey’s official investment guidance similarly identifies these two forms as the most commonly selected corporate structures.
A foreign investor does not generally need a Turkish shareholder merely because the investment is foreign-owned. A Turkish company can therefore be established as a wholly foreign-owned subsidiary, subject to sector-specific restrictions that may apply to certain regulated activities.
Among the different types of companies in Turkey, the first practical decision for most foreign investors is therefore whether to establish an A.Ş. or Ltd. Şti.
Limited Liability Company (Ltd. Şti.) in Turkey
Among the main types of companies in Turkey, the Limited Liability Company is commonly used for privately held businesses with a relatively straightforward ownership structure.
It has a separate legal personality from its shareholders and can be established by one or more real or legal persons.
Minimum Capital for a Limited Liability Company
The minimum share capital required to establish a Limited Liability Company is currently:
TRY 50,000
Unlike a Joint Stock Company, there is no requirement to deposit 25% of the subscribed cash capital before registration. The subscribed capital can generally be paid within 24 months following registration.
Companies established under the previous lower capital requirement must also take account of the transitional capital rules. Existing Limited Liability Companies whose capital remains below TRY 50,000 must increase it to the statutory minimum by 31 December 2026, failing which the consequences provided under the transitional provision of the Turkish Commercial Code may apply.
Shareholders of a Limited Liability Company
A Limited Liability Company can have:
- a minimum of one shareholder; and
- a maximum of 50 shareholders.
Shareholders may be individuals or legal entities.
There is no general requirement for a shareholder to be a Turkish citizen or Turkish resident. Accordingly, a foreign individual or foreign company may own 100% of a Turkish Limited Liability Company, subject to restrictions applicable to particular regulated sectors.
Management of a Limited Liability Company
A Limited Liability Company is managed by one or more managers.
At least one shareholder must have management and representation authority. A legal entity may also be appointed as a manager, in which case a real person must be designated to perform the relevant duties on behalf of the legal entity.
This can become an important structural consideration where a foreign corporate shareholder wants to establish a wholly owned Turkish subsidiary.
The foreign shareholder does not necessarily need to appoint a Turkish citizen as the manager merely because the company is foreign-owned. Immigration and work permit requirements, however, must be considered separately where a foreign individual will actively work in Turkey.
Liability of Limited Company Shareholders
As a general corporate law principle, shareholders are not personally liable for the company’s ordinary commercial debts beyond their capital obligations.
However, Limited Liability Companies have an important distinction concerning public debts.
Where public receivables cannot be collected from the company, shareholders may become liable for qualifying public debts in proportion to their capital participation, subject to the applicable rules governing collection of public receivables.
Managers and legal representatives may also face separate liability rules.
This distinction should be considered when comparing a Limited Liability Company with a Joint Stock Company.
Transfer of Limited Company Shares
Transfers of shares in a Limited Liability Company are more formal than ordinary transfers of Joint Stock Company shares.
The process generally involves a written share transfer agreement with notarized signatures and, unless the articles of association provide otherwise within the permitted legal framework, approval by the General Assembly. Registration and trade registry procedures may also need to be completed.
For a closely held owner-managed company, this additional formality may not create a significant problem.
However, where investors expect frequent ownership changes, external investment rounds, group restructurings or a future exit, the relative flexibility of the Joint Stock Company structure may become important.
Joint Stock Company (A.Ş.) in Turkey
The Joint Stock Company is another of the principal types of companies in Turkey and has a separate legal personality with capital divided into shares.
Although it is often associated with larger businesses, an A.Ş. does not require multiple shareholders or a large management team. It can be established with a single shareholder and can therefore also be used as a wholly owned subsidiary of a foreign company.
Its main advantages become more apparent where ownership flexibility, investment, share transfers, corporate governance or future exit planning are important.
Minimum Capital for a Joint Stock Company
The minimum capital for a standard Joint Stock Company is currently:
TRY 250,000
For non-public Joint Stock Companies using the registered capital system, the minimum initial capital is:
TRY 500,000.
For an ordinary A.Ş. established with cash capital, at least 25% of the subscribed capital must generally be paid before registration, with the remaining amount payable within 24 months following registration.
As with Limited Liability Companies, existing Joint Stock Companies that remain below the new statutory minimum must take account of the 31 December 2026 transitional deadline.
Shareholders of a Joint Stock Company
An A.Ş. can be established with a single shareholder.
The shareholder may be an individual or legal entity, and there is no general Turkish nationality or residence requirement for ordinary shareholders.
Unlike a Limited Liability Company, there is no general maximum of 50 shareholders.
This makes the A.Ş. structure significantly more adaptable where additional investors may enter the company later.
Board of Directors
A Joint Stock Company is managed and represented by a Board of Directors.
The board may consist of a single member.
Importantly, a board member does not generally need to be a shareholder.
A legal entity can also be appointed as a board member, provided that a real person is designated to act on behalf of that legal entity.
This can provide greater flexibility for international corporate groups that want to separate ownership from management.
Liability of A.Ş. Shareholders
As a general rule, shareholders of a Joint Stock Company are liable to the company for their subscribed capital and are not personally liable merely because they are shareholders for the company’s commercial debts.
The treatment of public debts also differs from that applicable to Limited Liability Company shareholders.
However, board members and legal representatives can incur personal liability in specific circumstances, including under rules relating to public receivables and failures to perform statutory duties.
The distinction is therefore not simply that “nobody is liable” in an A.Ş. Rather, shareholder status and management responsibility should be analysed separately.
Share Transfers in a Joint Stock Company
One of the principal advantages of the A.Ş. structure is greater flexibility in transferring shares.
Depending on the type of shares, whether share certificates have been issued, the articles of association and other applicable restrictions, an A.Ş. share transfer can generally be structured with considerably less corporate formality than a Limited Liability Company share transfer.
This becomes particularly relevant for:
- investment rounds;
- joint ventures;
- group restructurings;
- employee equity arrangements;
- bringing new investors into the company; and
- future disposals or exits.
The tax consequences of a future share disposal can also differ depending on whether the shareholder is an individual or a corporate entity and on the form and holding period of the shares.
For example, Turkish tax rules provide specific treatment for qualifying disposals of Joint Stock Company share certificates held by individuals for more than two years. The tax position should therefore be considered when the investment is structured rather than only when an eventual exit is planned.
Joint Stock Company vs Limited Liability Company in Turkey
The following table summarizes some of the principal differences:
| Criteria | Joint Stock Company (A.Ş.) | Limited Liability Company (Ltd. Şti.) |
|---|---|---|
| Minimum capital | TRY 250,000 | TRY 50,000 |
| Minimum shareholders | 1 | 1 |
| Maximum shareholders | No general maximum | 50 |
| 100% foreign ownership | Permitted | Permitted |
| Capital before registration | Generally 25% of cash capital | No pre-registration capital payment generally required |
| Management | Board of Directors | Manager(s) |
| Must a manager/director be a shareholder? | No | At least one shareholder must have management and representation authority |
| Legal entity as manager/director | Possible | Possible |
| Share transfer | Generally more flexible | More formal transfer procedure |
| Share certificates | Available | Does not operate under the same share-certificate regime as A.Ş. |
| Public offering | Possible subject to capital markets legislation | Not available |
| Bond/debt security issuance | Available subject to applicable rules | More restricted |
| Shareholder exposure to uncollected public debts | Shareholders are not liable merely due to shareholder status | Shareholders may be liable proportionally under public receivables rules |
| Suitable for external investors / future exit | Generally more flexible | Possible, but less flexible |
| Company duration | May be established for a definite or indefinite period | May be established for a definite or indefinite period |
The comparison between these two types of companies in Turkey should not be read as meaning that an A.Ş. is automatically “better” than a Limited Liability Company.
For many privately owned businesses, the Ltd. Şti. structure is entirely adequate and involves a lower initial capital requirement.
The A.Ş. becomes particularly relevant where the investor expects more sophisticated ownership arrangements, future investment rounds, share transfers, corporate restructuring or an eventual exit.
Can a Company in Turkey Be Established for a Limited Period?
Yes.
A Turkish company does not need to be established permanently. The articles of association may provide for a definite duration, or the company may be established for an indefinite period.
This point is sometimes misunderstood in relation to Limited Liability Companies.
References to a 99-year period should not be interpreted as meaning that every Limited Liability Company must automatically close after 99 years. A Limited Liability Company can be established for an indefinite period.
Where the founders intentionally establish the company for a defined duration, that duration is dealt with through the articles of association and the applicable corporate law rules.
Accordingly, “maximum 99 years” should not be treated as a general lifespan applicable to every Limited Liability Company in Turkey.
Choosing Between the Main Types of Companies in Turkey
There is no single choice among the types of companies in Turkey that is appropriate for every foreign investor.
A Limited Liability Company can be suitable where the business will remain closely held, there are only one or a few shareholders, external investment is not expected and the owners prefer the lower statutory capital requirement.
A Joint Stock Company may be more suitable where the business is expected to bring in investors, transfer shares, establish different ownership arrangements, undergo future restructuring or eventually be sold.
An A.Ş. may also be required for certain regulated activities.
The choice should therefore be based on the intended Turkish operation rather than simply choosing the structure with the lowest incorporation cost.
Can a Foreign Investor Own 100% of a Turkish Company?
Yes.
Foreign investors can generally own 100% of the principal types of companies in Turkey used for foreign investment, including Limited Liability Companies and Joint Stock Companies. Turkish investment rules are based on equal treatment between foreign and domestic investors, although sector-specific ownership or authorization restrictions can apply in certain regulated industries.
A Turkish individual shareholder is therefore not generally required simply because the company is foreign-owned.
Similarly, there is no general rule requiring an ordinary Turkish company to have a Turkish citizen as a shareholder.
This distinction is important because ownership, company management, residence and work authorization are separate legal questions.
Does a Turkish Company Need a Resident Director?
Foreign investors sometimes assume that incorporating a company in Turkey automatically requires a Turkish resident director or nominee shareholder.
That is not a general requirement for an ordinary A.Ş. or Ltd. Şti.
However, the management structure must comply with the requirements applicable to the selected company type.
For a Limited Liability Company, at least one shareholder must have management and representation authority.
For a Joint Stock Company, board membership is not generally restricted to shareholders.
If a foreign individual will actually work in Turkey as a manager or director, work permit requirements should be considered separately from the corporate appointment itself.
Corporate Tax and Dividend Distribution
Both Joint Stock Companies and Limited Liability Companies are Turkish corporate taxpayers.
The standard corporate income tax rate should therefore not normally determine whether an investor chooses an A.Ş. or Ltd. Şti.; the two structures are generally subject to the same corporate tax framework, although different rates or incentives can apply depending on the taxpayer’s sector, activities and circumstances.
Tax is first calculated at company level on taxable corporate profits.
Where after-tax profits are subsequently distributed to shareholders, dividend withholding and the tax status of the shareholder must also be considered. For foreign shareholders, an applicable tax treaty may reduce the withholding tax rate or otherwise affect the taxation of the distribution. For further information, see our guide to Double Taxation Agreements in Turkey.
As of 2026, Turkey applies a 15% domestic dividend withholding rate to relevant distributions, subject to applicable exemptions and treaty provisions.
The tax consequences of operating through a Turkish subsidiary should therefore be considered at both the corporate-profit and profit-distribution levels.
Share Sale and Exit Planning
The future sale of the business is one of the areas where the choice between an A.Ş. and Ltd. Şti. can become particularly important.
An investor establishing a small wholly owned operation may initially view share-transfer mechanics as irrelevant. However, the position can change if the Turkish operation grows and the investor later wants to:
- sell the Turkish business;
- introduce a joint venture partner;
- transfer the subsidiary within an international group;
- issue equity to a new investor; or
- restructure regional ownership.
The legal form of the company, the identity of the shareholder, the holding period and whether qualifying share certificates exist can all affect the legal and tax treatment of the transaction.
For this reason, investors expecting a future equity transaction should consider exit planning when selecting the company type at incorporation.
Can a Limited Liability Company Be Converted Into a Joint Stock Company?
Yes.
A Turkish Limited Liability Company can be converted into a Joint Stock Company through a statutory type-conversion procedure.
This means that choosing an Ltd. Şti. at the beginning does not necessarily lock the investor permanently into that structure.
A growing company may later decide to convert where its ownership structure becomes more sophisticated, new investors are expected, share-transfer flexibility becomes important or the A.Ş. structure is otherwise more appropriate for its future operations.
However, conversion requires corporate documentation, shareholder resolutions, trade registry procedures and compliance with the capital and other requirements applicable to the new company type.
It is therefore preferable to consider the expected medium-term ownership structure before incorporation rather than assuming that conversion will always be the easiest solution later.
Alternatives to Establishing a Company in Turkey
Although A.Ş. and Ltd. Şti. are the principal types of companies in Turkey used by foreign investors, establishing a Turkish company is not the only way to create a local presence.
Two important alternatives are a branch office and a liaison office.
These structures are fundamentally different from establishing a Turkish subsidiary and should not be treated simply as additional company types.
Branch Office in Turkey
A branch allows a foreign company to conduct business in Turkey without incorporating a separate Turkish subsidiary.
The key distinction is that a branch is not a separate legal entity from its foreign parent company.
It has no shareholders of its own and its existence is connected to the foreign parent company.
There is no statutory minimum capital requirement comparable to the TRY 50,000 Ltd. Şti. or TRY 250,000 A.Ş. minimums, although sufficient resources should naturally be allocated for the branch’s Turkish activities.
The branch may operate within the business purposes of the foreign parent company.
Branch Representative
A foreign-company branch must have an authorized representative in Turkey with the authority required to represent the branch.
The incorporation documentation therefore differs from a subsidiary structure and generally includes corporate documents and resolutions of the foreign parent company together with the documents appointing and authorizing the Turkish branch representative.
Documents issued abroad will generally need to satisfy the applicable legalization or apostille requirements and be officially translated for use in Turkey.
Taxation of a Branch
A Turkish branch carrying on commercial activities can create a Turkish taxable presence for the foreign company.
Branch profits attributable to Turkish activities are therefore subject to Turkish corporate taxation under the applicable rules.
Additional taxation may arise when after-tax branch profits are transferred to the foreign head office. Turkey’s official investment guidance currently states a domestic 15% withholding rate on branch profits remitted to headquarters, subject to possible reduction under an applicable double taxation treaty.
A branch should therefore not be selected merely because it does not require the incorporation of a subsidiary. Corporate liability, taxation, treaty treatment and the relationship with the foreign head office should all be considered.
For a detailed explanation of establishment, registration and operational requirements, see our guide to Opening a Branch Office in Turkey.
Liaison Office in Turkey
A liaison office, sometimes referred to as a representative office, is fundamentally different from both a subsidiary and a branch.
Its defining characteristic is that it cannot conduct commercial activities in Turkey.
A foreign company may establish a liaison office only after obtaining the required permission from the Ministry of Industry and Technology, General Directorate of Incentive Implementation and Foreign Investment.
This structure may be appropriate where a foreign company wants a non-commercial presence in Turkey for permitted activities such as representation, coordination, communication, certain market-related activities or other activities falling within the scope approved by the Ministry.
It is not appropriate where the Turkish operation needs to sell goods or services, issue commercial invoices or otherwise generate ordinary commercial revenue in Turkey.
Liaison Office Permission Period
Liaison offices operate under a permission-based system.
According to Turkey’s current official investment guidance, initial liaison office permits may be granted for a maximum period of three years based on the declared activity. Extension applications are assessed by the Ministry considering factors including the office’s previous activities, business plan, future objectives, expenditure and employees.
Importantly, liaison offices established for market research or promotion of the foreign company’s products or services are not eligible for an extension of their operating period under the current framework.
This makes the exact activity selected in the original application important.
Funding a Liaison Office
Because the liaison office cannot carry out commercial activities in Turkey, its operating expenses are generally funded by transfers from the foreign parent company.
This is structurally different from a subsidiary or branch that conducts revenue-generating business activities in Turkey.
The tax and employment treatment of a liaison office should nevertheless be reviewed separately. The absence of ordinary commercial activity does not mean that the office has no Turkish registration, reporting, payroll or employment obligations.
For a detailed explanation of permitted activities, establishment requirements, taxation and extension procedures, see our guide to Liaison Office in Turkey.
Subsidiary vs Branch vs Liaison Office in Turkey
For a foreign investor, the practical comparison can be summarized as follows:
| Structure | Separate Turkish Legal Entity? | Can Conduct Commercial Activities? | Minimum Capital | Ownership / Parent Relationship | Typical Use |
|---|---|---|---|---|---|
| Limited Liability Company | Yes | Yes | TRY 50,000 | Has shareholder(s) | Closely held Turkish business or subsidiary |
| Joint Stock Company | Yes | Yes | TRY 250,000 | Has shareholder(s) | Investment, scalable subsidiary, JV or future exit |
| Branch Office | No | Yes | No statutory minimum comparable to a subsidiary | Part of foreign parent company | Direct Turkish operation of foreign company |
| Liaison Office | No separate commercial company | No commercial activity | No company capital requirement | Extension of foreign parent for permitted non-commercial activities | Representation, coordination and other approved non-commercial presence |
The correct structure therefore depends first on what the foreign company intends to do in Turkey.
If the operation will generate revenue and function as an independent Turkish business, an A.Ş. or Ltd. Şti. will often be the structures considered first.
If the foreign company wants to conduct Turkish business directly through the foreign legal entity, a branch may be considered.
If the intended presence is genuinely non-commercial, a liaison office may be possible.
Factors to Consider When Choosing Between Types of Companies in Turkey
The decision between different types of companies in Turkey should not be based only on incorporation cost or minimum capital.
Foreign investors should consider:
- whether commercial revenue will be generated in Turkey;
- whether the Turkish operation should be legally separate from the foreign parent;
- expected number and type of shareholders;
- management and governance requirements;
- potential exposure to public debts;
- expected investment rounds or ownership changes;
- future share transfers and exit strategy;
- regulated-sector requirements;
- tax and profit-repatriation consequences;
- whether employees will be hired in Turkey;
- whether foreign managers or employees will require work permits; and
- whether the Turkish presence is intended to be temporary or permanent.
For example, a foreign company carrying out preliminary market analysis may not need a subsidiary at all.
Conversely, a business expecting to sign Turkish customer contracts, generate substantial local revenue, employ a significant workforce and develop a permanent operation should generally analyse the subsidiary and branch alternatives in greater detail rather than trying to operate through a liaison office.
Frequently Asked Questions About Types of Companies in Turkey
Can a foreigner establish a company in Turkey?
Yes. Foreign individuals and foreign legal entities can generally establish Turkish companies under the same corporate-law framework applicable to domestic investors. A company can generally be 100% foreign-owned, subject to specific restrictions applicable to certain regulated sectors.
What is the minimum capital for a company in Turkey?
The current minimum capital is TRY 50,000 for a Limited Liability Company and TRY 250,000 for an ordinary Joint Stock Company. A non-public A.Ş. using the registered capital system is subject to a minimum initial capital of TRY 500,000.
Is an A.Ş. always better than a Limited Liability Company?
No. An A.Ş. provides advantages in areas such as ownership flexibility, share transfers and investment structures, but many privately held businesses operate effectively as Limited Liability Companies. The appropriate structure depends on the intended business and ownership model.
Does a foreign company need a Turkish shareholder?
Generally, no. Both an A.Ş. and Ltd. Şti. can generally be wholly foreign-owned.
Does a foreign company need a Turkish director?
There is no general rule requiring an ordinary Turkish subsidiary to appoint a Turkish citizen as a director or manager solely because the company is foreign-owned. The management requirements of the selected company type and any applicable immigration or sector-specific rules must nevertheless be considered.
Can a Limited Liability Company later become a Joint Stock Company?
Yes. Turkish corporate law permits a Limited Liability Company to be converted into a Joint Stock Company through the applicable statutory type-conversion procedure.
Can a foreign company open a branch instead of a subsidiary?
Yes. A foreign company can establish a Turkish branch. The branch is not a separate legal entity and remains part of the foreign parent company.
Can a branch issue invoices and conduct business in Turkey?
Yes, a properly established branch can conduct commercial activities within the permitted scope of the foreign parent company’s activities. This distinguishes it from a liaison office.
Can a liaison office sell products or provide services in Turkey?
No. A liaison office is permitted on the condition that it does not engage in commercial activities in Turkey.
How long can a liaison office operate?
The initial permission can currently be granted for up to three years. Extension depends on the approved activity and the Ministry’s assessment. Liaison offices operating for market research or promotion of the foreign company’s products or services are not eligible for extension under the current rules.
Choosing the Right Type of Company in Turkey
For most foreign investors comparing the types of companies in Turkey, the principal corporate choice is between a Limited Liability Company and a Joint Stock Company.
The Ltd. Şti. offers a lower minimum capital requirement and can be entirely appropriate for a closely held operating business.
The A.Ş. offers greater flexibility where future investors, share transfers, corporate restructuring, financing or an eventual exit are expected.
A branch office provides another route where the foreign company wants to conduct business directly in Turkey without creating a separate subsidiary.
A liaison office, by contrast, is designed for a permitted non-commercial presence and cannot be used as a substitute for a revenue-generating Turkish operation.
The most appropriate structure should therefore be determined by the planned activities, ownership model, management structure, tax position and long-term strategy rather than incorporation cost alone.
Metropol Consulting supports foreign companies with company formation, branch registration, liaison office establishment and related corporate, tax, payroll and employment procedures in Turkey.