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ESTABLISHMENT OF A COMPANY IN TURKEY

BALRIUM Group completes the preparation of establishment of the company and branch opening documents, application, follow-ups, support and consultation process, personally with you or with the accompany of our attorneys’ and with the power of attorney and financial consultant in 3 days and 3 stages upon your request. After the completion of the establishment of your company, experienced, knowledgeable and expert financial advisory team provides the services of the continuation of the vitality of the company before official institutions and organizations.

1) NEGOTIATION PROCEDURES BEFORE THE ESTABLISHMENT OF A FOREIGN PARTNERED COMPANY IN TURKEY

POINTS TO NEGOTIATE

Local investors and international investors establishing companies in Turkey have equal rights and obligations. The conditions for establishing and transferring shares are the same as those applied to local investors. International investors are entitled to establishing; Joint Stock Company, Limited Liability Company, Cooperative, Collective Company and Limited Partnership. In order to improve the investment environment and to facilitate business partnerships, company establishments are realized in the Provincial Trade Registry Directorates. Provincial Trade Registry Directorates work with a corporate governance approach that meets international standards, promotes private equity and public offering activities, provides transparency in management procedures, and aligns Turkish Business with the EU legislation and accession process.

BALRIUM Group Expert Team, together with the Foreign Company Founder Prospective Partners in Turkey, initiates the establishment of the company by negotiating on the title and address of the company, the purpose and position of the company, the director and the capital of the company.

COMPANY’S NAME

Company’s name is determined by mutual negotiations and controls from the Central Registration System (MERSIS), with the Foreign Company Founder Prospective Partners, who wants to establish a company in Turkey. Name-control is important since the Turkish Law requires that any two of the first three words of the company’s title must be different in order to prevent unfair competition.
MERSIS is the central information system established by the Turkish Trade Registry Directorate, which is used by the Ministry of Customs and Trade for the regular storage of commercial registry data electronically, in order to realize all the processes from application to registration. During the establishment of the company or the transfer of its records, the company itself generates the company-specific number.

HEADQUARTERS

Candidates who wish to establish a foreign company in Turkey negotiates on where and under which circumstances the lease agreements on headquarters shall be signed, along with the founding partners. Turkish law requires all foreign or domestic companies to be established in Turkey that they must show headquarters address. The central address can be office, workplace, home office or shared (virtual) office.
One of the criteria that should be considered while determining the central address is that the owner of the property to be rented is a natural person or a legal person. If the owners of the leased properties (center, branch, workshop, factory, warehouse, etc.) are real persons, they have to pay the Lease Fee + 22% Withholding Tax and in case of legal entity the Lease Fee + 18% VAT. If the owner of the leased property is a natural person, withholding tax is deducted from the tax base in income and expense accounts, whereas VAT is deducted directly from VAT tax if the property owner is a legal person.  Therefore, the fact that the property owner is a legal person provides financial advantages to the company. In case the company headquarters is a shared (virtual) office, the company headquarters is determined by paying particular attention to whether the company to be serviced is reliable and established and whether it provides permanent rental services.

PURPOSE AND THE SUBJECT OF THE COMPANY

Prospective co-founding Partners who wish to establish a foreign company in Turkey, determine what work they want to do in the company they want to establish by negotiating the company’s PURPOSE AND THE SUBJECT with the founding partners. The NACE codes of the business lines and business areas determined by negotiation must be specified in detail in the articles of association of the company. NACE Codes are the legal codes that indicate the fields of activity of the company in the articles of association of the company. It is required to determine if the foreign company that is intended to be established in Turkey is in the category of the companies which are established with special permission or the category of the companies that cannot be established with Foreign Partner.

Companies Established With Special Permissions (Preview)
Companies That Cannot Be Established With Foreign Partners (PREVIEW)

COMPANY CAPITAL

The amount of the company capital is determined through negotiations with the Prospective co-founding Partners who wish to establish a foreign company in Turkey. It’s required by the law that the foreign company managers and the foreign workers must obtain a work permit. The amount of company capital is a legally defined criteria for obtaining a work permit. Therefore, the capital amount of the company should be determined in a way that meets the need for obtaining a work permit. In order to ease the arrival of the foreign capital to country, Turkey is flexing or even ignoring the obligation to obtain a work permit. For these reasons, while determining the amount of the capital of the company, it is especially negotiated if the foreign manager and the foreign workers shall obtain work permit and also the possible main contract modification costs in case government of Turkey may not maintain its flexibility on work permits. BALRIUM Group experts recommend that foreign capital for 2019 should be determined as at least TL 100,000.
During or after the establishment of the foreign company, the subject of work permit is negotiated separately and the information of fulfilling the services of work permit is shared with the companies and/or managers that do not wish to consider the flexibility that Turkish Government shows in practice on work permits and wishes to fulfil legal necessity.

REPRESENT AND BIND OF THE COMPANY

During the establishment of a foreign company, it is determined by negotiating with the Prospective co-founding Partners of the company, who or who (the manager or managers) will represent and bind the company to third parties, how many people will be, what the authority of each manager will be, what will be the limits of authority and the term of office. In case the official director of the company is more than one natural or legal person, the issue of whether the directors sign a single signature (jointly) or jointly (joint) and the effect of the number of managers on the cost of establishment of the company are also discussed.

2) ESABLISHMENT PROCEDURES OF FOREIGN SUBSIDIARY COMPANIES IN TURKEY

PRELIMINARY PREPARATION FOR THE ESTABLISHMENT

The Articles of Association of the Foreign Partnership Company shall be prepared by negotiation with all its elements. Since every amendment to the Articles of Association will result in a separate cost, we place importance on obtaining the final approval of the candidate founding partners through the final negotiation of the entire contract. We pay special attention to the fact that all necessary documents are completed, in order not to prolong the duration of Prospective co-founding Partners staying in Turkey, to complete the signatures for the Provincial Directorate of Trade Registry and to complete the establishment of the company in 3 days. Since the establishment process of the company will be monitored separately in many official institutions such as MERSİS,

PROVINCIAL TRADE REGISTRY DIRECTORATE, PROVINCIAL CHAMBER OF COMMERCE, DISTRICT TAX OFFICE, DISTRICT SOCIAL SECURITY INSTITUTION, we ensure that our expert personnel continue to work in parallel with each other. BALRIUM Group Expert Team initiates the establishment process of the company by providing documents from official institutions and organizations, by providing sworn Turkish translators and notary public support for the complete collection of all documents, by formulating the Company’s Articles of Association with all its elements.

DOCUMENTS REQUIRED FOR THE ESTABLISHMENT OF THE COMPANY

PROCESS OF ESTABLISHMENT

Following completion of the Transaction, the Provincial Directorate of Trade Registry makes notification that the Tax Administration and the Social Security Institution to establish the company’s image and allows the company to publish the whole of the main contract in Turkey Trade Registry Gazette.

3) Completing the Process of Establishment after the Registration of Foreign Co-Founded Company

Completion of the Establishment before the Official Institutions

(BALRIUM Financial Consultancy – CPA Murat BAL, Financial Consultancy Service and Fee Agreement (PREVIEW))
(Chamber of Certified Public Accountants of Istanbul Minimum Fee Rate (PREVIEW))

(BALRIUM Law Office – Yasemin BAL, Attorney Service & Fee Agreement)
(Istanbul Bar Association Minimum Fee Rate)

COST OF ESTABLISHING FOREIGN CO-FOUNDED COMPANIES IN TURKEY

The negotiation phase of the establishment of the company, the complete collection of all documents in order to apply for the establishment of the company, the establishment of operations in the Provincial Trade Registry Directorate does not mean that the company is fully established. The establishment of the company, the number of shareholders of the company, whether the partners are real or legal persons, the number of managers change the costs of establishment of the company.
After the company has been registered in the Provincial Trade Registry Directorate, completing the opening of the company before he Provincial Chamber of Commerce, Tax Office Revenue Administration and Social Security Institution and obtaining the

passwords, Opening Approval of the Commercial Books of the Company and obtaining electronic notifications and REM passwords and the establishment of the Signature Circular to ensure the representation of the company in the public and private sectors are other factors affecting the cost of establishment. In addition, the regulation of the power of attorney of the company’s financial advisor and attorney is another factor affecting the cost. Completion of the Company Establishment Procedures is mandatory. Otherwise, as the company will not be established in official institutions, operations and vitality of the company will be adversely affected, additional time and financial costs and administrative fines may be brought up. Calculating the establishment cost of the company is the most important issue that should be taken into consideration in order for the company to start its operation and continue its trade without any problems.
Get a quote from our office for the Cost of Establishing Joint Stock Company and Limited Liability Company (CLICK TO GO TO CONTACT)

4) COMPULSORY TRANSACTIONS, TAXES, FEES AND OTHER PAYMENTS TO BE MADE AFTER THE COMPLETION OF FOREIGN CO-FOUNDED COMPANY

After the company is established, returns must be filed, accrued taxes and monthly mandatory fees and expenses must be paid. Processes of Monthly & Quarterly & Annual Declarations and accruing of taxes, SSI Notifications and accruing payments, accrual of all payments in the Self-employed Wages and Other Payments category are supported by the services provided by BALRIUM Group expert team. However, timely and complete payment of taxes, fees and expenses by the company is a prerequisite for avoiding legal problems and fines.

DECLARATIONS (MONTHLY / QUARTERLY / ANNUAL)

TAXES (MONTHLY / QUARTERLY / ANNUAL)

SOCIAL SECURITY INSTITUTION

FEES

OTHER PAYMENTS

Estimated Company Payment Calendar for 2019 (calculated on minimum and approximate) (Preview)