Foreign Capital Investment Operations
What are required documents and procedure for establishing a company with foreign capital?
With the introduction of the new Turkish Commercial Law, now it is considerably easier to establish companies with foreign capital. Those who want to invest in Turkey may choose to establish branches, limited companies, corporations and even sole proprietorships and take place in this expanding market. The documents (which may vary slightly) required for this process are as follows:
*Articles of incorporation
*Bank letter stating ¼ of the initial capital has been paid and blocked
*If the foreign partner is a real person, notarized passport photocopy; if the partner is a corporation, apostilled certificate of existence and abstract of record
*Specimen signature certificate of the authorized manager
*Company establishment notification form
The procedure for establishment is as follows:
*Compilation of the articles of corporation using the online MERSIS system
*Signing of the articles of corpration by the shareholders and notarization
*Acquiring the potential tax ID number
*Opening a bank account, depositing ¼ of the capital and having it blocked
*Application to the Trade Registry with the listed documents
*Informing the Tax Office and Social Security Administration with written notifications
*Informing the Ministry of Economy after the establishment and once in every year in May
What is the procedure for capital increase, share transfer, change of address, change of title, liquidation, merging and take over for companies with foreign capital?
The following are required for companies with foreign capital to execute the actions above:
*Board resolution regarding the related process
*Modification using the online MERSIS system
The most important aspect during this procedure is preparing the resolutions either in English or any other language with great precision. Afterwards these resolutions are translated by a sworn translator and notarized. The documents listed above may vary depending on the kind of the change being made.
What are the required documents and procedure for foreign companies to establish a liaison office in Turkey?
In order to establish a liaison office in Turkey, one must apply to the Ministry of Economy. Any firm may establish a liaison office as long as it does not involve in any commercial activity. The required documents are as follows:
*Declaration involving the scope of activity to be conducted and commitment to avoid any commercial activity
*A document displaying the authorization to sign for the foreign company manager
*Apostilled and certified status of existence of the foreign company
*Annual financial report or the balance sheet and income statement of the foreign company
*Power of attorney given to the liaison office manager
*Power of attorney given to the person who will execute the establishment process
When applied to the Ministry of Economy with the documents listed aboce, permissions will be granted for 5 or 10 years depending on the scope of activity of the liaison office. If demanded, a new application must be made at the permission due date. Although the liaison office will not conduct any commercial activity, employing Turkish personnel and renting an office from a real person will cause a withholding tax liability. Therefore these offices should also be registered at the Tax Office.
What are the prerequisites, documents and procedure for employing an expatriate in Turkey?
Whether established with foreign capital or not, a company must apply to the Ministry of Labor in order to get the working permit for employing an expatriate. The prerequisites are as follows:
*The company must be employ 5 Turkish employees per 1 expatriate
*Must comply with at least one of the following: The paid capital to be at least 100.000 TL, if an exporter, last year’s exports to exceed 250.000 USD or annual income to exceed 800.000 TL.
*The expatriate’s salary should not be less than the amount determined by the Ministry of Labor
The companies meeting these requirements will be asked to acquire the following documents:
*Expatriate application form
*Notarized passport photocopy
*Notarized diploma or graduation document
*Residence permit valid for more than 6 months (required for applications from within Turkey)
*Working permit application form for the company
*Last year’s balance sheet and income statement certified by either the Tax Office or a chartered accountant
*Trade Registry Gazette displaying the latest capital structure
The list above may vary due to expatriate’s profession. The application is initially made online and afterwards the originals of the documents are handed over to the Ministry. The process usually takes 15-20 days to complete. Generally the permit is given for 1 year and a similar procedure must be carried out at the end of this period. From April 2014 onwards, working permits also stand for residence permits. Certain amounts of fees must bu paid to the Ministry of Labor and Police Department in order to obtain the working permit. Following the acquisition of the permit, the expatriate must be registered at the Social Security System.
What are the required documents and procedure to obtain a residence permit?
A non-expatriate must apply to the Police Department to obtain a residence permit. These permits can be granted up to 1 year and can either be for touristic purposes or for people who are first degree relatives of an expatriate with a working permit. The applicant must be present at the Police Department during the application.
*Passport and a photocopy
*Depending on the accomodation type, either a hotel reservation document, rental contract or a commitment signed by the Turkish citizen with whom the applicant is staying.
*Residence declaration form
*General health insurance
The residence permit is posted to the registered address within 90 days.
For other questions regarding foreign capital and employing expatriates, please get in contact with us.