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One of the most curious questions when establishing a company is how to establish a Limited Liability Company in Turkey and what is its tax status. In this article, we will share with you the steps to be considered for those who want to establish a Limited Liability Company, the costs and the management processes of the company.
Company Types
First of all, there are two main types of companies in Turkey: Sole proprietorships and capital companies. According to the Turkish Commercial Code, capital companies are divided into three types: Limited Liability Company, Joint Stock Company and Limited Partnership Company with capital divided into shares.
Sole proprietorships are categorized as Collective and Ordinary Limited Partnerships. The main topic of this article is Limited Liability Companies.
Tax Status of Limited Liability Companies
Limited Liability Companies are subject to corporate tax as they are capital companies. Corporate tax is applied at a fixed rate.
For 2021, the corporate tax rate was increased from 20% to 25%. For 2022, this rate has been set at 23%.
How to Establish a Limited Liability Company?
The establishment of a limited liability company is more complex than sole proprietorships. In the establishment of a company, it is first necessary to prepare an articles of association.
Getting professional support in this process ensures that the transactions proceed correctly and quickly. The articles of association is registered with the Chamber of Commerce and information such as the company's title, field of activity, partners, members of the board of directors are included in this agreement.
During the establishment of a company, the capital amount must be at least 10,000 TL. In the past, there was an obligation to deposit a quarter of this capital in the bank, but this obligation has been abolished.
Documents Required for Limited Company Establishment
- One photograph
- Documents related to the company address
- Documents required for registration with the Chamber of Commerce
- Password request from the tax office
- Signature circular of the company manager
- Deputy accountant
- Accounting contract
Establishment Period of Limited Liability Company
The establishment of a limited liability company starts with an appointment at the Chamber of Commerce. According to the appointment date, the application to the tax office and attendance procedures are completed. This process is usually finalized within 3-4 days.
Address of the Limited Liability Company
There are three options when choosing an address for a limited liability company: Business, home or virtual office. If you are doing something like e-commerce, you can show your home as a business address. If a virtual office is preferred, the withholding tax does not come into play.
Cost of Establishment of a Limited Liability Company
On average, the cost of establishing a Limited Liability Company ranges between TL 10,000 and TL 12,000. Registration with the Chamber of Commerce, notary fees and accountant fees are included in these costs.
Do Limited Liability Companies Have to be e-Invoice Taxpayers?
Limited liability companies are not obliged to be e-invoice taxpayers. However, companies with an annual turnover exceeding 5 million TL must use e-invoice. Companies below this limit can optionally use e-invoice.
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