Foreign Direct Investment Law
In accordance with Foreign Direct Investment Law numbered 4875 (“FDI”), foreign investors shall be subject to equal treatment with local investors. FDI allows foreign investors to make direct investments freely in Turkey. Pursuant the equal treatment principle, Foreign Investors have the same rights and liabilities as the local investors.
Net profits, dividends, proceeds from the sale or liquidation of all or any part of an investment, compensation payments, amounts arising from license, management and similar agreements, and reimbursements and interest payments arising from foreign loans through banks or special financial institutions can be freely transferred abroad by Foreign Investors.
Company establishment and share transfer conditions are same with those applied to local investors. Foreign investors may incorporate any type of company constituted under Turkish Commercial Code (“TCC”). However, limited liability companies (“LLC”) and joint stock companies (“JSC”) are more common and preferable due to their dynamic structure.
Limited Liability Company
LLC could be incorporated by 1 to 50 natural person and/or legal entity as a shareholder.
Minimum Capital shall be at least TRY 10,000.00. Nominal value of one share could be minimum TRY 25. Primary obligation of LLC shareholders is limited to deposit subscribed capital. Capital may be deposited as capital in cash and/or capital in kind. Shareholders are not personally liable for the debts of company, nevertheless they are liable, pro rata their shares, for the company debts arising out of public debts as tax liability, administrative penalties and social security premiums.
LCCs have a General Assembly of Shareholders consisting of all shareholders. General Assembly is convened at least once a year.
LLC is managed by the Board of Managers, members of which are elected by the Board of Shareholders. Managers are not required to be Turkish citizens or residents in Turkey.
Joint Stock Company
JSC could be incorporated by at least 1 natural person or legal entity as a shareholder.
Minimum capital of JSCs is TRY 50,000.00, ¼ of which is to be deposited during incorporation process as in cash or in kind, and the rest of which is to be deposited in following 24 months. JSCs could be publicly traded as opposed to LLCs.
JSC shareholders are not personally liable of company debts, including but not limited to the public debts, provided that their shares in capital duly paid.
JSCs have a General Assembly consisting of shareholders. General Assembly is convened at least once a year.
JSC is managed by the Board of Directors (“BoD”), members of which are elected by the General Assembly. BoD members are not required to be Turkish citizens or residents in Turkey. Legal entities may be assigned as BoD members as well.
Should you have further questions and detailed information please do not hesitate to contact us.
Yılmaz Göksu Serdaroğlu