Can a foreigner own 100% of a company in Turkey?

Generally yes. Turkey's foreign direct investment framework gives international investors the same rights and obligations as local investors, although regulated sectors may have licensing or ownership conditions.

Which company type is most common for foreign investors in Turkey?

Limited liability companies and joint stock companies are the most common. The choice should reflect governance, funding, liability, sector rules and the intended exit, not formation cost alone.

Does a foreign shareholder need a Turkish tax number?

A non-Turkish shareholder or board member may need a potential Turkish tax identification number for registration and banking procedures.

What is MERSİS in Turkey?

MERSİS is the Central Registry Record System through which commercial registry records and company formation procedures are processed electronically.

What is the corporate tax rate in Turkey in 2026?

The general corporate income tax rate is 25%. Specific institutions, activities, public offerings and incentive-backed investments may be subject to different rates or reductions, so eligibility must be checked separately.

What are the VAT rates in Turkey in 2026?

The principal VAT rates are 1%, 10% and 20%. The correct rate depends on the good or service, and exemptions, withholding or reverse-charge rules may apply.

When is the Turkish corporate tax return filed?

For a calendar-year company, the annual corporate tax return is generally filed and paid in April, the fourth month after the accounting period ends.

Does a Turkish company need a local accountant?

Turkish statutory books, tax filings and electronic records require local-law compliance. Businesses normally work with an authorised Turkish accounting professional and should define responsibilities before their first transaction.

Can a liaison office issue invoices in Turkey?

No. A liaison office may not conduct commercial activity or earn local revenue. A company or branch is normally required for revenue-generating operations.

Does forming a company give a foreign director a work permit?

No. Company formation does not automatically grant a work or residence permit. The person's role and immigration status must be assessed and the required permit obtained before work begins.

Are intercompany service fees deductible in Turkey?

Deductibility depends on business purpose, actual benefit, arm's-length pricing, documentation and correct withholding and VAT treatment. An invoice alone is not sufficient evidence.

What should a foreign-owned company complete before its first invoice?

It should complete tax activation, bookkeeping setup, VAT classification, e-document checks, signing authority, bank controls and a documented process for transferring source records to its accountant.

Turkey Business Tax & Accounting Guide for Investors

Contents 12 sections

Doing business in Turkey involves more than incorporating a company. A foreign investor must align the legal vehicle, tax registrations, accounting system, invoicing, payroll and cross-border transactions from the start. This guide explains the operating framework for 2026 and shows where a local company, branch or non-commercial liaison office leads to different obligations.

Scope note: This is an operational roadmap for foreign-owned businesses. It does not replace transaction-specific legal or tax advice. Rates, incentives, e-document thresholds and filing rules should be reconfirmed for the relevant accounting period and activity.

The operating model at a glance

Decision	What it affects	Evidence to retain
Legal presence	Liability, governance, repatriation and registration	Trade registry record, articles, resolutions and powers of attorney
Tax footprint	Corporate tax, VAT, withholding and permanent-establishment exposure	Contracts, tax registration, invoices and substance records
Accounting setup	Statutory ledgers, chart of accounts, e-documents and close process	Approved books, e-Ledger files, vouchers and reconciliations
People model	Payroll tax, social security, work permits and employment records	Contracts, permits, payroll and SGK submissions
Related-party flows	Transfer pricing, withholding, VAT and treaty relief	Agreements, pricing analysis, residency certificates and service evidence

1. Choose the right form before registration

Turkey's foreign direct investment framework generally gives international investors the same rights and obligations as domestic investors. The most common incorporated forms are the limited liability company (limited şirket, usually abbreviated as Ltd. Şti.) and the joint stock company (anonim şirket, or A.Ş.). The right choice depends on governance, funding, regulated activity, exit plans and the allocation of legal responsibility—not only formation cost.

Turkish subsidiary: a separate Turkish legal person with its own accounting and tax obligations.
Branch: registered in Turkey but not legally independent from the foreign head office. Its permitted activities follow the parent company's scope.
Liaison office: requires approval and may not carry on commercial activity or generate local revenue.
Cross-border sales without incorporation: may still create Turkish VAT, withholding or permanent-establishment risk depending on functions, people, contracts and digital or physical presence.

For the incorporation documents and practical sequence, see the verified company formation in Turkey service page. A dedicated comparison of LLCs, JSCs, branches and liaison offices should be used for the final structural decision.

Questions to answer before choosing

Will the Turkish operation sign customer contracts and issue invoices?
Is the activity subject to a sector licence, foreign ownership restriction or minimum-capital rule?
Will investors enter or exit, and is external financing expected?
Will the business import goods, hold inventory or employ staff?
How will profits, royalties, interest or service fees move across borders?

2. Company setup: from documents to tax readiness

Confirm activity and licences. Select the correct business scope and NACE activity codes before drafting the articles.
Prepare foreign documents. Corporate extracts, shareholder resolutions and powers of attorney issued abroad generally require notarisation and an apostille—or Turkish consular certification—followed by an official Turkish translation and notarisation.
Obtain potential tax identification numbers. Non-Turkish shareholders and board members may need them for registration and banking steps.
Complete MERSİS and trade registry filing. MERSİS is the Central Registry Record System used for commercial registry procedures. Registration is completed through the relevant Trade Registry Directorate.
Complete tax-office activation. The Trade Registry communicates incorporation to the tax office and the Social Security Institution (Sosyal Güvenlik Kurumu, SGK). A tax-office address verification visit, known as yoklama, is normally part of activation.
Set up banking and signing authority. Bank compliance, beneficial-owner review and account activation are separate from legal incorporation and may require additional group documents.
Activate accounting and e-document processes. Decide who can issue invoices, approve payments, provide source documents and sign electronic filings before the first transaction.

Build your Turkey operation on a compliant foundation

Before the first invoice or payroll run, map registrations, bookkeeping ownership and monthly filing responsibilities to your actual business flow.

Discuss the setup on WhatsApp Call for an operating-readiness review

3. Understand the Turkish business tax stack

A Turkish operation rarely has only one tax. Its effective position is the result of corporate income tax, VAT, withholding taxes, payroll charges, stamp tax and any customs or sector-specific liabilities. The contract, invoice and accounting entry must tell the same commercial story.

Area	2026 operating point	Main control
Corporate income tax	The general rate is 25%. Different rates or reductions may apply to specified financial institutions, eligible activities, public offerings or incentive-backed investments.	Reconcile statutory profit to taxable profit and document exemptions, additions and reductions.
VAT (Katma Değer Vergisi, KDV)	The principal rates are 1%, 10% and 20%; classification, exemptions, partial withholding and reverse charge can alter the result.	Determine place of supply, tax point, applicable rate and supporting exemption documents before invoicing.
Withholding tax	May arise on payroll, rent, professional services, dividends, royalties, interest and certain non-resident payments.	Classify the payment and confirm domestic law and treaty relief before remittance.
Payroll and social security	Employer and employee social-security contributions, unemployment insurance, income-tax withholding and stamp tax may apply.	Register the workplace and employee on time; retain contracts, attendance and payroll evidence.
Stamp tax	Certain signed documents can trigger tax based on a fixed amount or the value stated in the document.	Review the executed version, copies and signature date before booking.
Customs and import taxes	Tariff classification, origin, customs value and import VAT determine exposure.	Align customs declarations with transfer prices, invoices and inventory records.

For VAT classification and filing detail, use the site's current VAT in Turkey 2026 guide. For a focused annual and monthly deadline map, see the Turkish tax filing and payment calendar.

Tax residency and permanent establishment

A company with its legal seat or place of effective management in Turkey is generally within the full corporate-tax regime. A foreign business may also become taxable in Turkey through a permanent establishment or permanent representative even without a Turkish subsidiary. Office use, employee authority, dependent agents, construction activity and contract performance should be reviewed together with the applicable double tax treaty.

A tax treaty does not normally remove domestic filing and evidence requirements automatically. Relief often depends on a current certificate of tax residence, beneficial ownership, transaction character and the treaty's procedural rules.

4. Accounting records, statutory books and e-documents

Turkish statutory accounting is transaction-led and document-led. Management accounts prepared under group policy do not replace local books. Source documents should be delivered promptly, classified under the Turkish Uniform Chart of Accounts and reconciled to bank, customer, vendor, payroll, inventory and tax records.

Books: the required journal, general ledger, inventory and corporate books depend on the entity and applicable law. Certification or electronic submission obligations must be monitored.
Currency: statutory records are generally maintained in Turkish lira. Foreign-currency balances require period-end valuation under tax rules.
Invoices: issue timing, mandatory fields, currency, VAT treatment and delivery method must be correct. Group invoices should identify the actual service and benefit received.
Electronic systems: e-Fatura, e-Arşiv Fatura, e-Defter and other e-documents have separate entry conditions and technical deadlines. Thresholds and sector mandates can change, so verify the current GİB communiqués rather than relying on a prior year's limit.
Retention: keep statutory records and the underlying commercial evidence for the period required by tax and commercial law; apply the longer relevant requirement where regimes differ.

The verified tax bookkeeping and accounting service page explains the local compliance support model. For the mechanics of recordkeeping, see the guide to statutory books and accounting records in Turkey.

5. Core filing rhythm for a calendar-year company

The table below is a control calendar, not a substitute for the GİB tax calendar. Public holidays, special accounting periods, extensions, entity status and tax type can change the operational date.

Obligation	General statutory rhythm	Operational preparation
VAT Return No. 1	Declare and pay by the 28th day of the following month.	Close sales, purchases, import VAT and withholding reconciliations earlier.
Reverse-charge VAT Return No. 2	Declare and pay by the 25th day of the following month.	Review non-resident services and domestic partial-withholding invoices.
Withholding and Premium Service Return	Monthly filers generally declare and pay by the 26th day of the following month.	Lock payroll, rent, professional-service and other withholding data.
Advance corporate tax	Quarterly; generally due by the 17th day of the second month following the quarter.	Complete a tax close, FX valuation and non-deductible expense review.
Annual corporate tax return	Filed and paid in the fourth month after the accounting period ends; April for a calendar-year company.	Finalise trial balance, tax reconciliation, related-party forms and supporting schedules.

Control point: The legal deadline is the last step. Set internal cut-offs for invoices, payroll changes, import files and intercompany charges several business days earlier. Late source documents can distort both VAT and corporate-tax positions.

6. Payroll, work permits and employer compliance

Incorporating a foreign-owned company does not itself give a foreign director or employee the right to work or reside in Turkey. Work-permit and immigration analysis should be completed before duties begin. Employer registration and employee notifications to SGK have strict timing rules, while the monthly payroll feeds the combined withholding and premium service return.

A compliant payroll file normally includes the employment agreement, personnel documents, work and residence authorisations where relevant, attendance and leave records, benefits, expense reimbursements, gross-to-net calculation, payment evidence and the related tax/SGK submissions. Benefits provided by an overseas parent should also be reviewed for Turkish payroll treatment.

For practical support, see payroll and HR compliance in Turkey and the site's explainer on payroll taxes and social security. Foreign personnel should also review the verified residence and work permits service page.

Intercompany service fees, royalties, financing, inventory transfers and management charges require more than an invoice. The Turkish entity should be able to demonstrate the commercial benefit, actual performance, arm's-length price, contract terms and correct tax treatment.

Minimum control file

Signed agreement and a clear description of functions, assets and risks
Evidence that the service or licence was actually received and benefited the Turkish business
Transfer-pricing method and supporting benchmark where required
Analysis of withholding tax, reverse-charge VAT and deductibility
Valid tax-residency certificate and treaty support when relief is claimed
Consistent customs value, accounting record and invoice for goods

A year-end true-up cannot repair weak evidence automatically. Related-party charges should be designed when the arrangement starts and reviewed throughout the year. For broader planning, see strategic tax planning in Turkey and Turkish tax advisory services.

8. Foreign-investment reporting, beneficial ownership and incentives

Companies and branches with foreign investment may have information reporting through E-TUYS, the Ministry of Industry and Technology's electronic foreign-investment information system. Separately, tax rules require accurate beneficial-owner information. Changes in ownership, control, capital and authorised persons should therefore flow promptly from legal teams to accounting and compliance teams.

Turkey's investment framework may provide VAT and customs-duty exemptions, corporate-tax reductions, social-security support, interest or profit-share support and other instruments. Eligibility depends on the investment certificate, location, sector, scale, technology and expenditure type. Do not book an incentive benefit until the approval, qualifying spend and accounting treatment are documented.

The project's pre-investment model should compare the base-case tax cost with the documented incentive case and include the cost of ongoing compliance. Missing a reporting or certification condition can undermine the expected benefit.

9. A practical 30–60–90 day control plan

Before launch: days 0–30

Approve the legal and tax operating model.
Complete trade registry, tax, address verification and SGK registrations.
Appoint responsible signatories and define bank payment controls.
Set the statutory chart of accounts and group-reporting bridge.
Test invoice, VAT and withholding decisions for expected transaction types.

First reporting cycle: days 31–60

Reconcile bank, receivables, payables, payroll and tax accounts.
Verify e-invoice delivery, e-Ledger responsibilities and archiving.
Review all non-resident and related-party payments before release.
Confirm internal closing dates ahead of legal filing dates.

Stabilise: days 61–90

Document the tax-control matrix and approval trail.
Run a permanent-establishment and transfer-pricing health check.
Reconcile local statutory results to group reporting.
Check foreign-investment, beneficial-owner and licence reporting.
Assess whether incentives or voluntary corrections require action.

Turn the checklist into a working compliance calendar

We can map your contracts, invoicing, payroll and cross-border payments to the returns and evidence your Turkish operation needs.

Request a tailored compliance map Speak with an adviser

Common mistakes foreign businesses should avoid

Treating incorporation, bank onboarding and tax activation as one completed step
Issuing the first invoice before confirming VAT and e-document status
Assuming a group accounting package automatically produces Turkish statutory books
Paying intercompany charges without service evidence or withholding analysis
Starting foreign personnel before work-permit and employer notifications are complete
Using old thresholds, tax rates or deadlines without checking the current official publication
Leaving tax and ledger reconciliations until the annual close

Official resources

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Doing Business in Turkey: Tax and Accounting Guide

The operating model at a glance