Turkey is a country where businesses have got on with flourishing for some time now. In Ankara as well as in the other big cities of the Turkish territory, companies of all types are emerging, making the businessmen around the world having a particular view on the country. If as a businessman, you’re feeling eager to set up a subsidiary in Turkey, you should read this article.
What to know about a Turkish subsidiary?
Foreign investors eager to expand their business in Turkey have the possibility to decide to open a subsidiary related to their parent company abroad. Considered as an entity away from the parent company, the subsidiary can be set up as a very new company established in Turkey and has the duty to observe all the taxation laws existing in the country. It’s then not the same as for a branch which fully depends on the foreign company.
Investors coming from countries having signed treaties of double tax avoidance with Turkey can take advantage of a single taxation of the benefits produced on Turkish soil. Foreign investors can enjoy as well minimized withholding taxes at the level of dividends and can even be exempted from paying these taxes.
The limited liability company appears to be the most common kind of company appreciated by entrepreneurs who decide to set up a subsidiary on Turkish soil. The limited liability company is likely to be private or public according to the number of founders and the minimum capital. The minimum share capital required to set up a public limited liability company is of 50,000 TRY and there must be at least one shareholder/founder.
The founders’ liability is limited to the contributions they give, which ensures their protection when a potential bankruptcy occurs. The management of this kind of company is covered by a general meeting of shareholders and a board of directors. If you’re feeling eager to establish a subsidiary without spending much, you should search for the payroll in Turkey. It will give you an idea of your subsidiary’s payroll costs and help you decide “=””>whether or not it is advantageous.
To form a private limited liability company, there must be at least one founder and a share capital no less than 10,000 TRY. The shareholders’ liability is also restricted to the amount related to their contribution to the capital of the company, the same with the public limited liability company.
Which way to establish a subsidiary in Turkey?
For opening a subsidiary in Turkey, it will be necessary to the investor to submit a given number of documents. They are the ones you have below:
- Articles of association coming from both the parent company setting up the subsidiary and from the new entity;
- Copies of the passports of the Turkish subsidiary’s managers;
- Signature declaration of the manager/s showing he/they accept(s) the position given to him/them at the level of the “subsidiary;
- Commercial books linked to the new company which have to be bought by the representative of the subsidiary.
All those documents have to be notarized before the manager/s submit(s) them to the Turkish Trade Register. Likewise, the investor is called to proceed with the opening of a bank account intended for use in Turkey by the new subsidiary. To finish, the subsidiary’s founders have the duty to deposit at the Turkish Competition Authority a minimum of 0,04% of the capital.
The registration process is supposed to be completed within 10 days. Nevertheless, in case other approvals or licenses are necessary, managers should wait a more significant period of time before the operations actually get started.