For foreign investors, it is important to model company formation, permit processes, use of incentives, corporate governance, and contractual risks together at an early stage.
This publication outlines, in general terms, the topics that companies should take into account in their decision-making process. Application may vary depending on the sector and the specific structure of the transaction.
The legal starting points for foreign investors
Türkiye’s Foreign Direct Investment Law No. 4875 rests on the principles of freedom of investment and national treatment: unless a specific regime provides otherwise, foreign investors incorporate and operate under the same company-law rules as domestic investors, and lawfully generated profits and proceeds can be transferred abroad. In practice, the questions that determine the structure are commercial and regulatory: the choice between a joint stock and a limited liability company, the licence and permit requirements of the target sector, employment and work-permit planning for foreign personnel, and the tax and incentive position of the investment.
The first decisions at incorporation
In practice the first decisions are these: choosing the right company type (joint-stock or limited), reflecting the shareholding and management structure accurately in the articles of association, making the investment notifications through E-TUYS, and running the work-permit calendar for key personnel in step with incorporation. Settling the governing law and the dispute-resolution clauses in the contract architecture at the outset markedly lowers the cost of any dispute that arises later. A short feasibility phase pays off alongside all of that: verifying sector-specific restrictions, modelling the incentive options before committing capital, and preparing the corporate documents so that governance, share transfers and exit scenarios are settled among shareholders from day one. Investors who plan the move into Türkiye as a whole also make the post-incorporation compliance obligations predictable from the first year. An overview of how we support market entry is set out under expansion into Türkiye.
Questions to answer before investing
The legal side of an investment decision starts with a handful of questions. In which sector will the business operate, and does that sector require a separate permit, licence or registration? Will the investment take the form of a new company, a shareholding in an existing one, or the acquisition of a business? How will the shareholding, management and signature authority, and profit distribution be structured? How many people will be employed in Türkiye, and which of them will come from abroad? Will the company process personal data? And what happens if one of the shareholders wants to exit? The earlier the answers are written into the articles of association and the shareholders’ agreement, the less room is left for later argument.
How incorporation runs in practice
In practice, incorporation runs through a sequence of steps: choosing the company form and the trade name, drafting the articles of association, collecting the documents relating to foreign shareholders and directors (with apostille and sworn translation where they are issued abroad), registration and announcement with the trade registry, tax registration and certification of the statutory books, opening the bank account and, where staff are to be employed, the social security workplace registration. In structures with foreign shareholders, preparing the documents usually takes longer than the registration itself, and it is normally that step which sets the timetable.
After incorporation: the first year’s compliance calendar
Incorporation is also the point at which continuing obligations begin: accounting and statutory books, periodic tax filings, the annual general meeting and the records that go with it, payroll and social security filings where there are employees, the information and record-keeping duties under the KVKK where personal data is processed, and the renewal of time-limited sector permits. Where incentives are used, tracking the commitments given in the incentive certificate belongs on the same calendar; incentive legislation is amended frequently, so the position should be checked as it stands at the time of the decision (as of July 2026).
Investing along the Germany–Türkiye corridor
Where the investment has a German leg, both legal systems have to be planned at once: which company provides the capital, how intra-group flows of goods and services are priced, and the tax outcome of profit distribution are all assessed from the outset against the double taxation treaty between the two countries. For movement in the other direction — groups expanding from Türkiye into Germany — our mirror guide is setting up a company in Germany, and the step-by-step account for foreign companies coming into Türkiye is in company formation in Türkiye. We run this corridor as a single team through our Germany Desk.
Practical takeaways for companies
- The relevant legislation and practice should be assessed on a current basis.
- Contractual, compliance, and operational processes should be addressed together.
- A file-based legal analysis should be carried out for the concrete situation.
