With its large domestic market, its geostrategic position between Europe and Asia and its dynamic trade volume, Türkiye is a significant destination for foreign direct investment. Under Law No. 4875 on Foreign Direct Investment, foreign investors, whether offshore funds or individuals, are as a rule treated equally with Turkish investors in company formation and commercial activity. That principle of equal treatment is broad, but it is not absolute: sector-specific restrictions in areas such as real estate acquisition, maritime transport, civil aviation and broadcasting must be assessed separately.
In practice, however, once tax treatment, share transfer mechanics and administrative burden come into play, the question of which corporate form to use, joint stock company (A.Ş.) or limited company (Ltd. Şti.), can determine the outcome of the investment. Drawing on our corporate practice, we set out below the structuring options for doing business in Türkiye.
1. The Joint Stock Company (A.Ş.)
This is the structure that angel investor networks, technology ventures and international holding subsidiaries should use in Türkiye.
Capital and Formation Requirements
Minimum capital: The minimum share capital for a joint stock company is TRY 250,000 (TRY 500,000 as initial capital for non-public companies adopting the authorised capital system). These figures were set by a 2023 Presidential Decree and took effect on 1 January 2024. One distinction matters here: TRY 250,000 is the subscribed share capital, not paid-in capital. At least 25% of the nominal value of shares subscribed in cash must be paid before registration (Article 344 of the Turkish Commercial Code), with the balance settled within twenty-four months.Compliance period for existing companies: Under provisional Article 15, added to the Commercial Code by Law No. 7511, joint stock and limited companies whose capital falls below these figures must increase it by 31 December 2026, failing which they are deemed dissolved. The Ministry of Trade may extend this period up to twice, by one year each time.For foreign investment, capital may be transferred through a foreign currency account, but it is recorded in the registry in Turkish lira at the Central Bank rate applicable on the date of registration.Number of shareholders: A joint stock company may be formed with a single shareholder, whether Turkish or foreign, individual or corporate.The Main Advantages of the A.Ş.
Ease and confidentiality of share transfers: Share transfers in a joint stock company are straightforward. The transfer of registered shares does not as a rule require notarisation, nor registration and publication in the Trade Registry Gazette; the transfer is recorded in the share ledger. Large acquisitions between holdings can therefore be completed without appearing in the public registry. It would be wrong, however, to say that no record is created. There are two important exceptions: the transfer of bearer share certificates has no effect against the company or third parties unless notified to the Central Securities Depository (Article 489 of the Commercial Code), and in a single-shareholder joint stock company the identity of the shareholder is registered and published in the Trade Registry (Article 338/2). Any expectation of confidentiality should be structured with these two cases in mind.The two-year rule and the capital gains exemption: Under repeated Article 80(1) of the Income Tax Act, gains from the disposal of share certificates belonging to fully liable corporations and held for more than two years are not treated as capital gains and are not subject to income tax, whatever the amount. Two conditions apply together: the holding must be represented by share certificates or interim certificates, and it must be held for more than two years. If it remains an uncertificated interest, the exemption does not apply regardless of the holding period; the sale then falls under paragraph 4 of the same article as a disposal of participation rights and is always taxable.Protection against public debt: Shareholders bear no liability with their personal assets for the company's tax or social security debts. Liability rests with the legal entity and, in a limited way, with the board of directors in its capacity as statutory representative. This is the clearest distinction between a joint stock company and a limited company.Governance flexibility: A joint stock company allows considerable freedom in general assembly arrangements and in creating privileged (Class A/B) shares, enabling an investor to build veto protections over budget approvals or executive appointments.2. The Limited Company (Ltd. Şti.)
This is a closed structure typically used by smaller, family-run businesses. Because of its procedural rigidity, it is generally unsuitable for foreign technology ventures and institutional funds.
Capital and Formation
Minimum capital: At least TRY 50,000 in share capital, with a minimum of one individual or legal entity. This figure was likewise set by the 2023 Presidential Decree and took effect on 1 January 2024; the 31 December 2026 compliance deadline applies to limited companies as well.The number of shareholders may not exceed 50.Unlike a joint stock company, a limited company cannot issue share certificates qualifying as negotiable instruments, nor can it issue bonds. Under Article 593/2, certificates for shares in a limited company may be issued either as evidentiary documents or in registered form; in neither case, however, do they carry the transferability or the negotiable-instrument character of shares in a joint stock company, and neither qualifies for the capital gains exemption. In practice this makes the structure uninvestable for venture capital funds.The Drawbacks of the Limited Company
A heavy share transfer procedure: Signing a document is not enough to transfer a shareholding. The transfer agreement must be in writing with notarised signatures (Article 595); unless the articles provide otherwise, the approval of the general assembly of shareholders is required and the transfer becomes valid with that approval. The transfer is recorded in the share ledger, and the managers must apply to have it registered with the Trade Registry (Article 598). Who bought your shareholding, and at what price, therefore becomes visible through the registry.Liability for public debts: This is the most significant risk in a limited company. Where the company cannot pay its taxes or social security premiums, the state collects the debt directly from the personal assets of the shareholders in proportion to their shareholdings. The corporate veil does not hold against public receivables.Heavier tax burden: Because no share certificates exist, the two-year exemption is unavailable. Whenever a shareholder in a limited company sells their interest at a profit, that gain is taxed as a capital gain regardless of the holding period.3. Management Structure
In a joint stock company: Management and representation are vested in the board of directors. There is no requirement for board members to be Turkish nationals or resident in Türkiye, and a legal entity may serve as a director.In a limited company: Management is vested in one or more managers. Under Article 623 of the Commercial Code, at least one shareholder must hold the right of management and the power of representation. For foreign funds that wish to remain purely passive shareholders, this represents a structural loss of flexibility.The Incorporation Process
Company formation in Türkiye is fully digitised through MERSİS, the Central Registry Record System.
1. Preparation of foreign company documents, with apostille or consular legalisation and notarised translation
2. Registration with the chamber of commerce and approval of the articles of association
3. Allocation of a tax number and blocking of capital at the bank
4. Final registration and publication at the Trade Registry Directorate (typically 2–3 business days)
This analytical report offers a strategic overview of Turkish corporate law for investors. Specific tax and commercial planning requires tailored constitutional documents prepared by qualified counsel.
Last updated: 10 August 2026.
