How to Set Up a Company? The Entire Process from Choosing the Type to Registration

The short answer to how to set up a company is this: first you choose the company type, then you prepare the trade name and articles of association, file the application through MERSİS (Central Registry System), complete the capital transactions and register the company with the trade registry. Company formation is the legal process by which one or more persons create a business with legal personality for a specific commercial purpose and register that business with the trade registry. The work does not end with registration; the tax office, Social Security Institution (SGK) and ledger procedures are just as important for the company to actually start operating.

In this guide, we divide the process into seven steps, compare sole proprietorships, limited liability companies and joint stock companies in a table, and briefly cover the additional steps for companies with foreign shareholders. As Akal CPA, let us state up front the mistake we see most often in practice: rushing the choice of company type to speed up formation comes back a few months later as a longer task, such as a change of company type or a capital increase.

How to set up a company: the short answer and a process map

A company comes into legal existence when the founders sign the articles of association and the company is registered with the trade registry. For limited liability companies and joint stock companies, this process runs through MERSİS (Central Registry System); for a sole proprietorship, the starting point is the tax office. In other words, before answering how to set up a company, you need to know which structure you will establish.

According to the Ministry of Trade’s MERSİS introduction page, the system started as a pilot in Mersin in 2010 and came into use at 238 trade registry offices in 2015. Today, all formation, amendment and deregistration transactions are recorded on this infrastructure. This means you can prepare most of the formation from your desk.

You can roughly divide the process into three blocks. The first block is the decision stage: company type, shareholding structure, capital and scope of activity. The second block is the registration stage: trade name, articles of association, MERSİS, capital and the trade registry. The third block is the start-of-operations stage: on-site inspection by the tax office, SGK, ledgers and e-transformation applications.

Which company type should you choose first?

The first decision for an entrepreneur who wants to set up a company is the choice of type, because liability, capital, taxation and the ability to take on partners later all depend on this decision. A sole proprietorship may be sufficient for a small, single-person business. For a structure with partners, one aiming for growth or one that will take foreign capital, capital companies generally stand out.

The choice of type is not irreversible, but changing it is cumbersome. Converting a sole proprietorship into a capital company or turning a limited liability company into a joint stock company requires new general assembly resolutions, valuation and registration procedures. For this reason, we recommend roughly writing out your three-to-five-year business plan before formation.

Sole proprietorship: quick start, unlimited liability

In a sole proprietorship (commonly called a “şahıs şirketi”), the business and its owner are not legally separate persons. The owner is liable for the business’s debts with all of their personal assets. Earnings are taxed under the progressive personal income tax schedule rather than corporate income tax.

This structure offers a simple start for low-volume, single-person activities. However, when you want to take on a partner, transfer shares to an investor or sign large contracts with corporate clients, you quickly reach its limits.

Limited liability company: the most commonly preferred structure in Turkey

A limited liability company can be established by one or more natural or legal persons. Under the Turkish Commercial Code (TTK), the number of partners cannot exceed fifty. As a rule, partners are liable to the extent of the capital they have subscribed; however, for public debts (such as tax and SGK premium debts), partners may be held liable in proportion to their shares.

The most practical aspect of a limited liability company is the capital payment. According to the Ministry of Trade, in a limited liability company the entire capital can be paid within 24 months after registration. Share transfers, on the other hand, are more formal than in a joint stock company because they require notarization and general assembly approval.

Joint stock company: a flexible structure for growth and investors

A joint stock company can be established with a single shareholder; there is no upper limit on the number of shareholders. Shares are transferred more easily, and taking on investors and going public later is easier with this structure. The company is managed and represented by the board of directors.

On the other hand, capital and formation discipline is stricter in a joint stock company. At least one quarter of the capital subscribed in cash is deposited before registration into a special bank account opened in the company’s name. In some fields of activity (for example, certain companies in the financial sector), Ministry permission is also required for formation.

Sole proprietorship vs. limited liability company vs. joint stock company

The table below places the three structures side by side according to the criteria most often asked about when deciding on formation. The amounts are based on official regulations in force as of October 2026.

The general corporate income tax rate in the table is based on the Revenue Administration (GİB) corporate income tax rate guide: according to GİB, corporate income tax is, as a rule, levied at 25% on corporate earnings, and 30% applies to banks and certain financial institutions. Reduced rates also exist for export and manufacturing earnings. Which rate applies to you depends on your field of activity.

Company formation in 7 steps

The steps below describe the common flow for limited liability companies and joint stock companies. The order matters, because each step uses the output of the previous one. For example, the MERSİS application cannot be completed until the articles of association are ready, and a joint stock company’s registration file remains incomplete until the capital is blocked.

Step 1: Determining the trade name and scope of activity

The trade name is the company’s official name, and all documents are executed under this name. The Turkish Commercial Code (TTK) allows joint stock and limited liability companies to choose their trade names freely, provided that the name indicates the business’s field of activity, but requires the name to include the words “anonim şirket” (joint stock company) or “limited şirket” (limited liability company). If you choose a name very similar to a previously registered trade name, you need to add a distinguishing element.

The scope of activity (the objects and scope clause) determines what business the company may conduct. Drafting this clause too narrowly forces an amendment to the articles of association when you later move into a new line of business. Drafting it too broadly and without focus can also raise questions when opening a bank account or applying for incentives. A balanced scope clause should also be consistent with NACE codes.

Step 2: Preparing the articles of association

The articles of association (esas sözleşme in a joint stock company, şirket sözleşmesi in a limited liability company) are the company’s constitution. The trade name, registered office, scope, capital, distribution of shares, management and representation authority, and general assembly procedures are set out in this text. MERSİS offers a standard template; however, if you want to preserve a particular balance among the partners (for example, restrictions on share transfers, a right of first refusal or privileged shares), you need to draft the text beyond the template.

A mistake we often see in practice is leaving the agreement between partners verbal. If it is written down from the start who will contribute capital and when, how the share of a departing partner will be valued and the limits of the manager’s authority, later disputes are largely prevented.

Step 3: Filing the MERSİS application

The digital answer to where you apply to set up a company is MERSİS. You start the application by logging in with e-Government (e-Devlet) to the Republic of Türkiye Ministry of Trade MERSİS system. In the system, you enter the trade name, address, scope, capital, partners and authorized persons; a draft of the articles of association is generated, and an application number is obtained.

When the application is complete, MERSİS shows the trade registry office where you will book an appointment and the list of documents to be submitted. According to the Ministry of Trade’s company information page, for a limited liability company the registration application is made within 30 days after the agreement is signed in the presence of authorized staff at the trade registry office. So as not to miss this period, it is safer to book the signing appointment once your documents are ready.

Step 4: Capital and banking transactions

Capital is the value the partners undertake to contribute to the company and may be in cash or in kind (such as real estate, machinery or a trademark). In a joint stock company, at least one quarter of the cash capital is deposited into a special account opened in the company’s name that only the company can use; the bank documents this with a letter. In a limited liability company, there is no requirement to pay before registration, and the capital can be paid within 24 months after registration.

If you will contribute capital in kind, the process takes longer. According to the Ministry of Trade, in this case a valuation report by a court-appointed expert and annotation letters from the relevant registry are required. Planning your formation timeline accordingly prevents the registration file from being incomplete at the last minute.

Setting the capital amount based solely on the legal minimum is also often not the right approach. For matters such as bank loans, participation in tenders and work permit applications, the company’s equity is taken into account. Assessing the amount your business requires together with your business plan gives sounder results.

Step 5: Signing, document submission and trade registry registration

The limited liability company agreement is signed by the founders in the presence of authorized staff at the trade registry office. In a joint stock company, the founders may sign at the trade registry office or have their signatures notarized. According to the Ministry of Trade, signature declarations are also prepared at the trade registry office.

The registration file generally includes the following:

• The signed articles of association obtained from MERSİS
• For a joint stock company, the capital blocking letter (bank letter)
• A document showing that the Competition Authority fee has been paid
• Declarations of acceptance of office by directors or managers who are not shareholders
• If there is a corporate partner, a notarized resolution showing the representative’s authority
• Signature declarations and, if required by the scope of activity, a permit or letter of approval

After reviewing the file, the office registers the company, and the formation is announced in the Turkish Trade Registry Gazette. Under the Turkish Commercial Code (TTK), the company acquires legal personality upon registration with the trade registry. Persons who enter into contracts on behalf of the company before registration remain personally liable if the company does not accept these transactions within three months after registration.

Step 6: Tax office registration and on-site inspection

For capital companies, tax liability is opened with the formation information sent from the trade registry to the tax office; for this reason, you often do not need to submit a separate business commencement petition. The tax office carries out an on-site inspection to see whether the company is actually operating at the reported address. The inspecting officer may ask to see documents such as a sign at the address, a lease agreement or a virtual office agreement.

A negative inspection result delays invoice use and the setup required for digital tax transactions. For this reason, you should make sure in advance that the address can be used as a legal address and that official notifications can be received there. A physical office is not mandatory; however, if you will use a virtual office, the agreement must be of a kind the tax office will accept.

After the inspection, the financial seal or e-signature, Digital Tax Office passwords and the settings required for your accounting system are set up. At this stage, choosing the company’s tax types correctly (such as corporate income tax, VAT, and the withholding and social security premium return (muhtasar)) is the quickest way to avoid surprises in the first filing period.

Step 7: SGK workplace registration, ledger certification and e-transformation

Under Social Insurance and General Health Insurance Law No. 5510, notification of the company’s formation to the trade registry is deemed to have been made to the Social Security Institution (SGK), and no separate workplace notification is prepared. The trade registry forwards this information to the Institution within ten days at the latest. If you will hire employees, you must submit an employment start notification for each insured person before their insurance coverage begins.

Ledgers are also part of formation. According to the Ministry of Trade, the opening certifications of ledgers for joint stock and limited liability companies are carried out by trade registry offices during formation. A joint stock company keeps a share ledger, a board of directors resolution book and a general assembly meeting and minutes book; a limited liability company keeps a share ledger and a general assembly meeting and minutes book. The journal, general ledger and inventory book are mandatory for all merchants.

On the e-transformation side, the obligation to switch to applications such as e-Invoice, e-Archive invoice and e-Ledger is determined by turnover, sector and, in some cases, type of activity. Because the thresholds are updated by Revenue Administration (GİB) communiqués, we recommend planning during formation which application your company will switch to and when. Switching early on a voluntary basis is also possible, and many corporate clients see this as a reason to choose a supplier.

Where do you apply to set up a company?

To set up a limited liability company or joint stock company, the application is made through MERSİS, while signing and document submission are completed at the trade registry office to which the company’s registered office is attached. Trade registry offices operate within the chambers of commerce and industry affiliated with the Union of Chambers and Commodity Exchanges of Türkiye (TOBB). For a sole proprietorship, the first point of application is the tax office.

The institutions you will deal with during formation can be summarized as follows:

• Trade registry office: signing, registration, ledger opening certification
• Bank: capital blocking for a joint stock company, company account
• Tax office: tax liability, on-site inspection, setting up tax types
• SGK: workplace registration and employee notifications
• Notary: certain signature certifications, powers of attorney and share transfer transactions

The Ministry of Trade’s commercial companies and trade registry procedures pagelists the required documents in detail by company type. Checking this list against your own structure before applying prevents your appointment from being postponed on signing day because of missing documents.

How to open a business: how does the process differ for a sole proprietorship?

For a sole proprietorship, the answer to how to open a business is shorter: a business commencement notification is made to the tax office, and tax liability is opened after the on-site inspection. If the owner qualifies as a merchant, they register with the trade registry; if they qualify as a tradesman, with the tradesmen and craftsmen registry. Under the Turkish Commercial Code (TTK), a merchant registers the business and its trade name within fifteen days from the day the commercial business is opened.

For a sole proprietorship, no articles of association are prepared on MERSİS, and there is no capital blocking. In return, the owner is personally liable for all of the business’s debts. As volume grows, considering a switch to a capital company becomes relevant because of the progressive structure of personal income tax; this transition is a separate planning matter.

Additional steps for companies with foreign shareholders

Foreign natural and legal persons can establish the same company types in Turkey as domestic investors. The process follows the same seven steps; the difference lies in the preparation of documents. In this section, we touch only on the main headings; we will cover each of them in detail in separate articles.

• Power of attorney: A partner who cannot come to Turkey can carry out the formation through a representative. A power of attorney issued abroad must bear an apostille or consular legalization, depending on the country.
• Apostille and translation: Foreign documents such as the trade registry certificate of a corporate partner or a resolution of its authorized body must be apostilled and accompanied by a notarized Turkish translation.
• Potential tax number: For partners who are not Turkish citizens, a potential tax identification number is obtained through the Revenue Administration (GİB) Digital Tax Office.
• Work permit: Being a partner and actually working in the company are separate matters. The situation of a foreign partner or executive who will take on a role in the company is assessed separately.

One more point is important in structures with foreign shareholders: the reporting required by the parent company and the investor and the ledgers required by Turkish tax legislation are not the same thing. Considering both needs together from formation onward reduces the confusion of preparing two separate reports at the end of the first year.

What are the cost items of company formation?

The cost of company formation varies depending on the company type, the capital amount, whether the partners are domestic or foreign, and the choice of address. Because the amounts are updated every year through fee and charge schedules, we do not give figures here and only list the items. We will cover current amounts in a separate article.

• Trade registry registration and announcement fees
• Competition Authority fee (calculated based on capital)
• Notary transactions (powers of attorney, certain signature certifications, translations)
• Ledger opening certification and ledger fees
• Financial seal or e-signature, software or integrator fees for e-transformation applications
• Office rent or virtual office and legal address service
• For foreign partners, apostille, sworn translation and consular procedures
• Accounting and formation advisory fees

Capital is not a cost item; it is the company’s own asset and can be used for its operations. In a joint stock company, the amount blocked before registration is also transferred to the company’s account after registration. Knowing this distinction helps you build a realistic formation budget.

Formation mistakes we often see in practice

The question we most often hear from our clients is how long the process will take. The answer depends on how ready the documents are, because most delays stem not from the institutions but from missing or incorrectly prepared documents. The mistakes below are the ones that prolong formation the most.

• The scope of activity not covering the actual business, requiring an amendment to the articles of association shortly afterward
• Designating an address where official notifications cannot be received as the legal address, resulting in a negative on-site inspection
• Not writing the rules on shares, authority and exit among partners into the articles of association
• Bringing foreign documents without an apostille or with an uncertified translation
• Submitting the employment start notification after the employee has started work
• Incomplete setup of tax types after registration and missing the first return

None of these mistakes is major, but each of them can force you to start the process over. Rather than promises such as “a company in 1 day,” proceeding with a predictable plan that prepares the documents completely often delivers results faster.

Checklist for the first months after registration

Setting up a company does not end with obtaining the registration certificate; the first few months are when the company’s financial routine settles in. The checklist below gathers the steps that should not be skipped after formation.

• Opening the company bank account and, for a joint stock company, releasing the blocked capital
• For a limited liability company, scheduling payment of the subscribed capital within the 24-month period
• Completing the tax office on-site inspection and setting up the invoicing routine
• If there are employees, submitting employment start notifications on time and setting up the payroll routine
• Planning the switch dates for e-transformation applications
• Using the registered trade name and MERSİS number on signage, letterhead documents and the website

Managing this list end to end is easier when the team that handles formation is the same team that runs the accounting. We explain Akal CPA’s working model as a single point of contact from formation to payroll on our Why Akal CPA page . You can find answers to short, practical questions about formation on our frequently asked questions page.

You can find our other articles covering company types, formation for foreigners, branches and liaison offices in detail in our Company Formation in Turkey category. If you would like us to carry out the formation on your behalf, our company formation service covers all steps from choosing the type to SGK registration.