Where Should a Foreign Investor Start in Türkiye’s Market? A Roadmap

A foreign investor in Turkey starts by choosing an investment model; company formation, tax registration, the accounting setup, incentives, staff and reporting then follow in order. Under the Foreign Direct Investment Law No. 4875, a foreign investor is a natural person of foreign nationality, a Turkish citizen residing abroad, or a legal entity or international organization established under foreign law that makes a direct investment in Turkey. This definition also determines who benefits from which guarantees.

This article is a roadmap. We leave the details of each step to our dedicated guides and show here the order and the links between the steps. Most of the problems we see in practice arise not from a gap in a single step but from taking the steps in the wrong order.

Who is a foreign investor, and which investments does the law cover?

Under the Law, a foreign investor is a person who makes a foreign direct investment in Turkey; what matters is less nationality than the source and structure of the investment. A Turkish citizen living abroad also falls within this definition. A foreign parent company, an international organization or a foreign-national entrepreneur is assessed within the same framework.

The investment itself is also defined. Cash capital brought from abroad, company securities (excluding government bonds), machinery and equipment, and industrial and intellectual property rights count as investment instruments. Profits generated in Turkey and reinvested are also on this list. Using these instruments to establish a new company, open a branch or become a partner in an existing company is considered foreign direct investment.

In practice, the distinction comes down to this: buying less than 10% of shares through the stock exchange is portfolio investment and is outside the scope of the roadmap in this article. The process we describe is for investors who want to establish a permanent operation in Turkey.

The investment climate in Turkey: guarantees provided by the law

The legal basis of the investment climate in Turkey is Article 3 of Law No. 4875. The article makes investment free and replaces the permit system with a notification system. In other words, there is no separate pre-approval gate for foreign capital; the company follows the same formation path as a domestic entrepreneur.

The same article lists four further guarantees. Investments may not be expropriated or nationalized unless required by the public interest and unless compensation is paid. Profits, dividends, sale, liquidation and compensation proceeds, as well as license and management fees, may be sent abroad freely. In investment disputes, provided the conditions are met and the parties agree, national or international arbitration may be used in addition to the courts.

The figures paint a picture consistent with this framework. According to Invest in Türkiye’s foreign direct investment page, international direct investment inflows to Turkey reached approximately USD 288 billion over 2003-2025, based on Central Bank of the Republic of Türkiye data. The same page states that the number of companies with international capital rose from 5,600 in 2002 to 86,926 by mid-2025.

A guarantee does not remove obligations. Equal treatment also means that a company with foreign shareholders is subject to the same tax, registry and Social Security Institution (SGK) rules as a domestic company. That is why every step of the roadmap relies on building regulatory compliance from the start.

An 8-step roadmap for foreign investors

The sequence below is the general framework we recommend for a foreign investor investing in Turkey for the first time. Depending on the sector and the size of the investment, some steps may be brought forward or run in parallel. However, moving to the fourth step without settling the first three is the most common reason for rework we encounter.

1. Choose the investment model

The first decision is the legal form of your presence in Turkey. The Law recognizes four routes: establishing a new company, opening a branch, becoming a partner in an existing company, and opening a liaison office provided it does not engage in commercial activity. Each has different liability, tax and reporting consequences.

The trend we see in practice is this: an investor who will issue invoices in Turkey, employ staff and plans to benefit from incentives usually sets up a capital company. A branch or liaison office, on the other hand, meets more specific needs. The final choice should be made based on the tax position in the parent company’s country and the intended activity.

2. Prepare the structure and documents of the company with foreign shareholders

Once the model is chosen, the shareholding structure, capital, management and signing authorities are finalized. When setting up a company with foreign shareholders, the shareholders’ identity and registry documents must be made valid in Turkey; this stage covers an apostille or consular legalization and translation. For shareholders who want to run the process without coming to Turkey, a power of attorney is also prepared at this stage.

Document preparation is often the longest item on the timeline. Planning the steps on the Turkish side in parallel while waiting for documents from institutions abroad shortens the process.

3. Set up the company and complete tax registration

Formation is completed with registration at the trade registry and the tax office. For shareholders who are not Turkish citizens, a tax identification number is obtained first, followed by the articles of association and registration procedures. We explain details such as minimum capital, choice of company type and the document list step by step in our guide to company formation in Turkey for foreigners .

The registration date is also the date on which tax obligations begin. The company starts filing returns even if it has not actually made any sales; that is why there should be no gap between formation and the accounting setup.

4. Plan the bank account and capital flow

A bank account is opened in the company’s name, and the foreign capital is brought into this account from abroad. The channel through which the funds arrive and the description used matter for proving the capital payment and for any future profit transfer. The payment schedule for the capital varies with the company type and the articles of association.

With clients that have foreign shareholders, banks examine the shareholding structure and the ultimate beneficial owner in detail. Preparing these documents together with the formation file reduces waiting time when opening the account.

5. Set up the accounting and tax framework

Under Corporate Income Tax Law No. 5520, corporate income tax is levied at a rate of 25% on corporate profit; a higher rate applies to banks and certain financial institutions. Like domestic companies, a company with foreign shareholders keeps books under the Tax Procedure Law (VUK), files VAT and withholding (muhtasar) returns, and complies with e-transformation obligations. Service, license and financing transactions with the parent company are subject to transfer pricing rules.

Two languages are spoken here at once. The tax office requires books kept under Turkish legislation, while the parent company often expects reports in line with its own reporting standard. To meet both needs from the same bookkeeping system, the chart of accounts must be set up accordingly from the outset. On the tax planning and compliance side, tax, audit and advisory services takes on this setup from the first day of the investment.

6. Assess incentives before investing

A Turkish company with foreign capital may also apply for an investment incentive certificate. However, timing is critical with incentives: as a rule, expenditure made before the certificate application is not covered. The possibility of incentives should be put on the table before machinery is ordered or construction begins.

We cover support measures, programs and regional differences in detail in our guide investment incentives . Its place in this roadmap is this: incentives should be considered when the investment budget is being drawn up, not after the company is formed.

7. Staff, work permits and residence

Under Law No. 4875, work permits for foreign staff to be employed in companies, branches and entities established within this scope are granted by the Ministry of Labor and Social Security. Today, the procedure for this permit is governed by International Labor Force Law No. 6735. Being a shareholder of the company does not in itself grant the right to work in Turkey; a permit is also assessed separately for a foreign shareholder who will take on a role in the company.

On the local staff side, SGK workplace registration, employment start notifications and the payroll setup come into play. The staffing plan should also be consistent with the employment commitment in the incentive application.

8. Put reporting and notifications on a calendar

Under Article 4 of the Law, foreign investors report statistical information on their investments to the Ministry in accordance with the procedure in the regulation. In practice, these notifications are made through the Ministry of Industry and Technology’s E-TUYS system. The Law also explicitly states that this information may not be used as evidence for any purpose other than statistics.

The notification calendar, the tax calendar and the parent company’s reporting calendar should be combined into a single plan. For growing companies, independent audit and financial reporting under international standards are also added to this calendar.

How should foreign capital and profit transfers be planned?

A profit transfer is the distribution of profit taxed in Turkey to shareholders and its remittance abroad, and Law No. 4875 makes this transfer free through banks or special finance institutions. Freedom of transfer does not mean that the tax obligation disappears. Distribution is made by a general assembly resolution, withholding is calculated on the dividend, and a double taxation avoidance agreement with the shareholder’s country may affect this withholding.

That is why we recommend that you also think about the exit when planning foreign capital inflows. The answer to the question of capital, shareholder loan or license fee affects the tax burden in Turkey, the transfer pricing risk and the parent company’s tax in its own country all at once. This choice is specific to the person and the structure; there is no single right answer.

A model added in 2026: the qualified service center

Law No. 7582 added an additional article titled “qualified service center” to Law No. 4875. Accordingly, a qualified service center is a capital company established to provide services to related companies operating in at least three different countries and earning at least 80% of its annual revenue from related companies abroad. Services such as financial consulting, reporting, human resources, technical support and R&D coordination are listed within this scope.

This is a new option for groups considering a regional management or shared service center. The Ministry of Industry and Technology will set out the implementation procedures and principles; therefore, secondary regulations need to be followed when assessing the model.

Mistakes we often see in practice

Although the question our clients ask most often is “how long will it take to set up the company,” the real delays occur after formation. We can summarize our observations as follows:

• Leaving the apostille and translation of shareholder documents to the last minute.
• Setting up the company and trying to establish the accounting system months later; filing obligations begin at registration.
• Spending on machinery and equipment before applying for incentives.
• Assuming that the foreign shareholder will not need a separate permit to work in the company.
• Signing service and financing agreements with the parent company without reviewing them from a transfer pricing perspective.
• Not keeping the bank records of capital inflows; these records are requested later when profits and capital are taken out.

At Akal CPA, we prefer to offer investors a clear roadmap rather than firm promises. Registry, ministry and SGK processes depend on the assessment of the relevant authorities; our job is to prepare the file completely and in the right order. For our other articles on the investment climate, incentives and reporting, Investment Guide category .

The first question for investing in Turkey should be not “how long will it take” but “in what order”; an investment set up in the right order makes every subsequent step easier.