Foreign individuals or legal entities can directly establish a company in Türkiye. The established company is subject to the same legal regime as companies founded by Turkish citizens. However, responsibilities and obligations may vary depending on the type of company.

1. Responsibilities by Company Type

Joint Stock Company (A.Ş.)

• Shareholders are only liable up to their committed capital.
• Board members may be personally liable for unpaid public debts such as taxes and social security premiums.

Limited Liability Company (Ltd. Şti.)

• Shareholders’ liability is limited to their capital contribution.
• However, for unpaid tax and social security debts, shareholders may be personally liable in proportion to their shares.
• Managers may be held directly responsible for public debts and administrative fines.

2. Financial and Tax Obligations

• Foreign-capital companies established in Türkiye are considered full taxpayers and are subject to corporate tax on all their earnings.
• Regular submission of VAT, withholding, and corporate tax returns is mandatory.
• If employees are hired, social security and unemployment insurance premiums must be paid.
• Companies must maintain statutory books, issue invoices, and keep and present documents in compliance with the Tax Procedure Law.

3. Commercial and Legal Obligations

• Companies are subject to the provisions of the Turkish Commercial Code (TCC).
• They must register with the trade registry, use a trade name, and prepare an annual activity report.
• Shareholders must pay their committed capital within the required timeframe.
• Creditors can pursue the company’s assets first for debts.

4. Responsibilities of Foreign Partners and Directors

• A foreign partner who wishes to work in Türkiye must obtain a work permit.
• If a foreign individual is appointed as a company director/manager, the Ministry of Labour and Social Security requires the company to employ Turkish staff.
• In practice, the company must employ at least 5 Turkish citizens for one foreign director.
• If there are multiple foreign managers, the requirement of 5 Turkish employees may apply for each foreigner.

5. Other Obligations

• Companies must register with the Chamber of Commerce and pay membership fees.
• Annual general assemblies must be held, and resolutions must be recorded in the decision book.
• Obligations under occupational health and safety legislation must also be fulfilled.

Conclusion

The establishment of companies by foreigners in Türkiye is subject to the same legal and tax framework as local companies. In both joint stock and limited liability companies, shareholders’ liability is limited to their capital contributions; however, managers or board members may be personally liable for public debts.

The main difference arises when a foreign director or manager is appointed: a work permit is required, and the company must employ at least 5 Turkish citizens.