BİRLİKTE. DAHA GÜÇLÜ.

Managing Business
Deciding the structure of your company

Company Types under TCC and Alternative Forms

There are corporate and non-corporate forms for companies under the TCC, which states that companies may be established under the following types:

a. Corporate forms

  •  Joint Stock Company (JSC)
  • Limited Liability Company (LLC)
  • Cooperative Company

Although some financial thresholds (i.e., minimum capital) and organs differ from each other, the procedure to be followed for establishing a JSC or an LLC are the same.

b. Non-corporate forms

  • Collective Company
  • Commandite Company

Although companies may be established according to these five different types, JSC and LLC are the most common types chosen both in the global economy and Turkey.

In addition to these types of companies, branches and liaison offices may also be considered as two further alternatives when setting up a business in Turkey. However, branches and liaison offices are not considered to be legal entities.

Branch Office

  • No shareholder
  • Not an independent legal entity. Its duration is limited to the duration of the parent company
  • No capital requirement, however, it would be wise to allocate a budget for the operations of a branch office
  • A branch office may be incorporated only for the same purposes as those of the parent company
  • Repatriation of branch profit is allowed. The branch profit transferred to the headquarters is subject to dividend withholding tax at a rate of 15 percent, which may be reduced by Double Taxation Prevention Treaties

Laison Office

  • Main activity is to conduct market research and feasibility studies and to oversee investment opportunities in the Turkish market on behalf of the parent company
  • Not allowed to carry out any commercial activity
  • Required to obtain permit from the Ministry of Economy, General Directorate of Incentive Implementation and Foreign Investment
  • The condition of being operational for at least one year might be sought for permit
  • The initial permit is issued for three years and can be extended depending on the activities in the past three years and the future plans of the parent company
  • Applications of international investors to establish liaison offices to operate in sectors that are subject to special legislation, such as money and capital markets, and insurance, etc., are assessed by the relevant authorities.