Types of Companies in Turkey: Which Is Best for Foreign Investors?

When investing in Turkey, one of the first decisions foreign investors need to make is choosing the right company structure. Each type of company has its own legal requirements, benefits, and limitations. Below is a simple guide to help you understand the different types of companies in Turkey and which one may be the best fit for your investment goals.

1. Joint-Stock Company (A.Ş.)

   - Overview: A joint-stock company is ideal for large-scale investments. The capital is divided into shares, and shareholders are only liable up to the amount they have invested in the company.

   - Advantages:

     - Limited liability for shareholders.

     - Easy to transfer shares.

     - Suitable for businesses that plan to go public or attract large investors.

   - Disadvantages:

     - Requires a higher minimum capital.

     - More complex management and reporting obligations.

2. Limited Liability Company (LTD)

   - Overview: A limited liability company is one of the most popular options for small and medium-sized businesses. It is easier to set up and manage compared to a joint-stock company.

   - Advantages:

     - Easier and cheaper to establish than a joint-stock company.

     - Shareholders’ liability is limited to their capital contribution.

     - Fewer legal and reporting obligations.

   - Disadvantages:

     - Harder to transfer shares compared to a joint-stock company.

     - Less attractive to large-scale investors or when going public.

Which Type Is Best for Foreign Investors?

   - Large-scale Investments: If you are planning a large investment or want to raise capital through shares, a joint-stock company (A.Ş.) is the best option.

   - Small to Medium Businesses: For smaller businesses with simpler needs, a limited liability company (LTD) is the easiest and most practical choice.

Conclusion

Choosing the right company type depends on your business goals, the size of your investment, and the level of control you want to maintain. Consulting with a legal expert can help ensure that you select the structure that best fits your needs and complies with Turkish regulations.