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Business registration and support in Turkey FINANCIAL MONITORING IN TURKEY

Taras Miroshnychenko

Head of International Corporate Law and Fintech Practice

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miroshnychenko@prikhodko.com.ua

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Expert in fintech, crypto, and international corporate law with over 20 years of experience. Specializes in crypto licensing (VASP/CASP), iGaming business support, and international structuring, asset protection, and OSINT analytics for risk assessment and due diligence.

FINANCIAL MONITORING IN TURKEY

Financial monitoring in different countries has a different degree of meticulousness and rigidity, but one simple fact is obvious to me – in neighboring countries, the Turkish system is the simplest and most friendly to the client. It is built in such a way as to reduce both the tax and bureaucratic burden on the foreign buyer or shift this responsibility to someone else – the real estate agency. It’s fast, simple, convenient, and reliable.

Financial monitoring in Turkey

An important aspect of the prevention of money laundering is that money obtained illegally is not illegally introduced into non-cash payment transactions and thus creates the impression of a legitimate origin of their acquisition. To facilitate the fight against money laundering, banks, savings banks, and other financial service providers are required to verify the source of funds for large payments. To this end, banks and other financial institutions must implement comprehensive security measures. Each bank can decide for itself what measures it takes and when it considers it necessary to check the legality of the origin of cash.

What is transaction monitoring in banks?

Transaction monitoring is the means by which a bank monitors the financial activities of its customers for signs of money laundering, terrorist financing, and other financial crimes. The process of monitoring transactions should allow banks to understand who their customers are doing business with and reveal important information about the transactions themselves: how much money is involved, where they are sent, and so on. Transaction monitoring in banks is an important part of the AML/CFT system as it allows them to keep pace with criminal methodologies and ensure compliance with their risk-based compliance obligations.

With this in mind, in order to effectively monitor transactions, banks should aim to collect the following data:

Amount of funds involved in customer transactions
The frequency with which clients participate in transactions
Senders and recipients of transaction funds
Geographic origin and purpose of the funds involved in the transaction
Correlation between the transaction and the expected financial behavior of the client
Involvement in the transaction of high-risk factors such as targets of sanctions, politically exposed persons, or blacklisted jurisdictions.

Our banking lawyer will advise you on the following issues:

How much money can be deposited into a Turkish bank account?
What works when the bank has requested documents on the origin of funds?
What documents confirm the origin of funds?
Where can I get documents confirming the origin of funds?
What to do if there are not enough documents on the origin of funds?
How to withdraw (return) blocked funds in a Turkish bank?
How to close a bank account?
How to legally circumvent financial monitoring in Turkey?
What if there is no source of funds?
How to pass financial monitoring in a Turkish bank?

Can a Ukrainian open a company in Turkey without a local partner?

For many ordinary types of commercial activity, a company with wholly foreign capital is possible. A foreign founder may be an individual or a legal entity. A Turkish partner is not a universal requirement for every company, but before registration, restrictions applicable specifically to the selected sector should be checked.

Management is determined separately: who will represent the company, sign agreements and operate the account. The ability to own a business does not automatically mean the right to work personally in Turkey. Therefore, the ownership structure, authority and immigration matters are considered together, before the documents are prepared.

Is it mandatory to establish a Turkish company in order to open an account in Turkey?

This depends on who needs the account and for which transactions. An individual’s account, an account of a Turkish company and banking services for a foreign legal entity involve different banking procedures. This service primarily covers launching a Turkish company and preparing it for corporate banking.

If the legal entity is already registered in another country, it is first necessary to clarify whether the bank will consider servicing it and which documents and local connections it expects. Establishing an additional company solely for the account should be considered only after the business need has been reviewed. It is also important to take into account the accounting and corporate obligations that will arise for the new structure.

What practical advantage does an account in Turkey provide for trade?

An account helps organise payments in the country where the company purchases or sells goods: paying suppliers, receiving local proceeds and handling settlements for business transactions. Foreign currency accounts and international transfers can complement this model for working with overseas clients.

For more complex supplies, letters of credit, documentary collections or guarantees can be considered separately. For example, a letter of credit links payment to the presentation of the documents specified in it. At the same time, the bank checks the documents in accordance with the terms of the instrument and does not guarantee the quality of the goods. This is why the banking product and supply agreement should be aligned.

Can a company and an account be opened entirely online?

Representation under a power of attorney is permitted for some registration actions, but the possibility of completing the entire process without travelling depends on the specific composition of founders and signatories. Documents issued abroad must be prepared in a form acceptable to the Turkish registry. Incorrectly worded authority may result in the power of attorney having to be reissued.

The bank establishes its own identification procedure and may require the personal participation of a company representative. Online banking after the account has been opened does not confirm the possibility of making the initial application remotely. Therefore, the format of participation is agreed before booking travel, executing a power of attorney and planning the first payment.

How long does registration and the launch of settlements take?

Registration in the trade registry is only one stage. Before it, the structure must be determined and documents and translations prepared; afterwards, the necessary organisational procedures must be completed and the bank review passed. Therefore, the date on which the company appears in the registry and the date on which the account is ready for the required payments may differ.

The overall plan is affected by the founder’s documents, participation of a foreign legal entity, the need for a power of attorney, a regulated type of activity and additional bank requests. An indicative timeframe should be determined after analysing the source information. For the first contract, it is advisable to separately check whether the required currency, access and payment direction have already been activated.

Does company registration give the right to live and work in Turkey?

Company registration formalises the business but does not in itself give the founder an unrestricted right to reside or work. If the owner plans to work personally or perform management functions in Turkey, the relevant immigration and employment regime, including possible exceptions, must be assessed.

Separate financial and staffing criteria may apply to a work permit. They cannot be replaced by the minimum share capital established for company registration. This is why plans to relocate and work personally should be disclosed at the beginning of the consultation: they may affect the organisation of the business.

Is accounting required if the company is not yet earning income?

After registration, the company must comply with applicable accounting and reporting obligations even while preparing to start sales. At this stage, there may already be owner contributions, rent, equipment purchases and other transactions. They must be properly recorded and supported by documents.

The list of tax returns, notifications and electronic tools is determined by the local accountant according to the company’s status and activities. It is advisable to agree the calendar and document transfer procedure immediately. If the company will not be used for a long period, further actions regarding it should be assessed separately rather than simply discontinuing accounting and communication with the authorities.

Do CFC obligations arise in Ukraine?

Such obligations may arise if the owner is a Ukrainian tax resident and meets the statutory criteria for control of a foreign company. Ukrainian citizenship alone is insufficient for a conclusion: tax residence, ownership structure and actual control must be assessed.

Where the relevant ground exists, a CFC notification is submitted within 60 calendar days from the event. The annual report is a separate obligation. A possible exemption of CFC profit from taxation should not be equated with an exemption from reporting. To ensure the required information is available later, Turkish financial documents and corporate changes should be collected systematically from the moment the company is established.

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