Opening of a company in Turkey

Due to the full-scale invasion of Russia into Ukraine, businesses have to adapt to new realities, including considering the issue of opening or transferring business to European countries, in particular to Turkey. Why Turkey?

The lawyers of Prikhodko and Partners have a well-founded answer. First of all, there were favorable conditions for doing business in this country before, and today the speed of opening a company and transparency in interaction with banking institutions creates additional advantages for potential business founders.

Relations between the European Union (EU) and Turkey were established in 1959, and the institutional framework was formalized by the 1963 Ankara Agreement.

Although Turkey is not officially part of the European Union, Turkey is one of the EU's main partners, and both are members of the European Union-Turkey Customs Union. Turkey is a party to more than 80 agreements on the avoidance of double taxation, including with Ukraine since 1998.

Why is Turkey one of the best solutions for business?

• Convenience of logistics and transportation across the borders between Europe and Asia
• Favorable tax system
• A clear and simple organizational form of doing business
• Access to the EU and Asian markets
• The main advantage of directly creating a business is the quick process of company registration.

In addition, tax conditions are of particular interest to any business. All taxation issues in Turkey are resolved by the Turkish Revenue Administration (TRA).

The taxation system of the enterprise depends on its legal status. The combined corporate tax rate for corporations and limited liability companies is 33%. The basic rate of corporate income tax is 20% of the company's profit.

Both citizens of Turkey and other countries are subject to personal income tax. For foreign citizens, the amount of tax is calculated depending on the income received as a result of any activity on the territory of Turkey (work, property ownership, commercial operations, etc.).

The personal income tax rate ranges from 15-35%.

The most common organizational form of doing business in Turkey is a limited liability company (Limited Şirket, LS), an analog of a Ukrainian LLC.

Analogs of self-employed persons and individual entrepreneurs (FOP in Ukraine) are also popular in Turkey, under certain circumstances, they can benefit from a preferential tax regime.

The client needs to start the process

• The name of the future company;
• Activities;
• Information about founders, and directors (passport data).

In advance, we agree on this with the Turkish Chamber of Commerce, so that the name of the company is free.

Turkey has been a member of the EU since 2007 and therefore, by opening a business in this country, you get free access to the market of European countries with their 450 million consumers.

Registering a business in Turkey gives you the following advantages:

• established import-export relations (in particular, sea trade) with the key players of the world market, the USA, China, Germany, Italy, France and Great Britain;
• the presence of a legislative foundation for the regulation of international business activities in the country, primarily Law No. 4875 "On Direct Foreign Investments" dated June 5, 2003, and provisions of the current Commercial Code;
• Convenient opening of a bank account in a European bank in the local currency TRY, Euro, and USD;
• advantageous location - the presence of borders with eight states: Bulgaria, Georgia, Syria, Iran, Armenia, Greece, Iraq and Azerbaijan.

CONCLUSION

Summing up, it is safe to say that Turkey is one of the most attractive jurisdictions in the world for Ukrainian businessmen, given its geographical proximity, logistics, and favorable taxation.

This especially applies to small and medium-sized businesses, IT companies and trading enterprises that plan to enter the EU and Asian markets.