Foreign investors interested in expanding their business in Turkey can choose to open a subsidiary of the parent company abroad. A subsidiary must observe all of the taxation laws in Turkey, plus other important business requirements. This article presents information about the registration of subsidiaries, mentioning that our experts in opening a business in Turkey can give in-depth assistance.
| Quick Facts | |
|---|---|
| Applicable legislation (home country/foreign country) | Turkish Company Law |
Best used for | – natural resources, – manufacturing, – banking, – insurance, – energy |
Minimum share capital | Yes |
| Time frame for the incorporation (approx.) | Around 2 months |
| Management (local/foreign) | Local |
| Legal representative required | No |
| Local bank account | Yes |
| Independence from the parent company | Yes |
| Liability of the parent company | No, the subsidiary is fully liable |
| Corporate tax rate | 25% |
| Possibility of hiring local staff | Yes |
| Registration documents to open a subsidiary in Turkey | – Memorandum and the Articles of Association of both subsidiary and parent company; – shareholders’ ID documents; – proof of deposited capital; – power of attorney; – founders’ declaration, etc. |
Local registered office (YES/NO) | YES |
Process of opening a subsidiary | – choose a business structure, – submit registered address, – obtain tax identity number, – pay the share capital, – register with the Trade Registry Directorate, etc. |
| VAT registration | Subsidiaries are required to register for VAT if they sell taxable services/goods. |
| VAT rates in Turkey | – 20% (standard); – 10%, 1% (reduced) |
| Number of double taxation treaties | 74 (approx.) |
| Other applicable taxes/ contributions | – stamp tax, – social security contributions, – payroll tax, – special consumption tax, – banking and insurance transactions tax, etc. |
| Tax incentives | – free trade zone companies incentives, – investment incentives, – R&D and design activities incentives, – foreign tax credit, etc. |
| Business structures | The most frequently used ones are: – the Limited Liability Company (Limited Sirket), – the Joint Stock Company (Anonim Sirket) |
| Fiscal year in Turkey | From 1st January to 31st December |
| Liability of the parent company | Generally not liable for the subsidiary |
| Minimum shareholders required | 1 (for both LLC and JSC) |
| Differences between a subsidiary and branch office | A branch office is not a separate legal entity, but rather an extension of the parent company. The parent company can be held directly liable for the branch’s obligations. |
| Advantages of opening a subsidiary in Turkey | – expanding the business in a new market, – access to tax incentives, – easy incorporation process, – low incorporation costs, etc. |
| Assistance | We can help you open a company in Turkey and expand your business here, offering support through the entire incorporation process. |
How to open a Turkish subsidiary in 2026
The limited liability company is the most common type of company preferred by entrepreneurs who choose to open a subsidiary in Turkey in 2026. The limited liability company can be public or private, depending on the minimum capital and the number of founders. Here are other formalities to consider in 2026:
- A minimum share capital of TRY 50,000 (TRY 250,000 starting from 2026) is needed to form a public limited liability company (also referred to as the joint-stock company) and at least one founder/shareholder.
- The liability of the founders is limited to their contributions, which protects them in case of bankruptcy. The management of this type of company is ensured by a board of directors and a general meeting of shareholders.
- The private limited liability company is formed with a minimum share capital of TRY 10,000 (TRY 50, 000 starting from 2026) by at least one founder.
- The liability of the shareholders is also limited to the amount of their contribution to the company’s capital, the same as for the public limited liability company.
In order to open a subsidiary in Turkey, the investor will need to submit a number of documents, among which:
- articles of association of both the parent company establishing the subsidiary and the new entity;
- copies of the passports of the manager/s of the Turkish subsidiary;
- signature declaration from the manager/s showing they accept the position in the subsidiary;
- commercial books of the new company, which must be purchased by the subsidiary’s representative.
The documents need to be notarized before they are submitted to the Turkish Trade Register. The investor will also need to open a bank account, which will be used in the country by the new subsidiary. The founders of the subsidiary must deposit at least 0.04% of the capital at the Turkish Competition Authority.
Our company registration agents in Turkey can tell you more about the incorporation procedure and the additional documents that may be needed to open a subsidiary in Turkey. Below is a scheme detailing the main steps of opening a Turkish subsidiary:
The advantages of the subsidiary
A large percentage of the capital of the subsidiary is owned by the foreign company, meaning that it also controls the management of its Turkish counterpart, and the latter must make business decisions with the consent of the foreign company.
Turkey welcomes foreign investment,s and there are no restrictions on foreign company establishment: a legal entity can have 100% foreign capital. A subsidiary in Turkey can have other activities too, besides the ones of the parent enterprise, because it can have an independent structure. The formalities for incorporation can be explained and managed by our team of local agents.
You can also watch the video below on how to open a subsidiary in Turkey:
Questions on the opening of a Turkish subsidiary
Below are the answers to some of the most frequently asked questions on how to open a subsidiary in Turkey:
Yes, the registration process of a subsidiary is the same as for any other type of company and can be partially completed from a distance through a power of attorney.
No, there is no need for a local sponsor or partner to set up a subsidiary in Turkey.
The registration process will take around 10 days; however, if any other licenses or approvals are necessary, investors should expect a longer period of time before actually starting the operations.
Yes, as a local company, the subsidiary must have an official address in Turkey. This address will be registered in the official database of the Trade Register.
The main difference between the two types of entities lies in the degree of independence the parent company wants to offer: the subsidiary is fully independent, while the branch office must undertake the parent company’s activities. Our local advisors can guide you in choosing the right option from this point of view.
Turkey’s economy in numbers
If you want to establish a subsidiary in Turkey and want to know something about the economic direction of this country, you might want to read the following information:
- The data for 2024 ranked Turkey 17th as the strongest economy in the world, and 7th in Europe. This was possible due to various measures implemented and falling inflation.
- An economic expansion of around 5.5% was registered in Turkey in Q1 of 2024.
- About USD 339,743 million was the GDP value in Q3 of 2024 in Turkey.
- Turkey’s international reserves have seen notable improvement, beating a record level of around USD 159.4 billion in 2024.
Business & economy updates for 2026
Ready to start a company in Turkey? We present you with some of the main business updates to consider in 2026:
- An economic growth of around 3.7%-4% is expected in Turkey in 2026.
- Starting from 2026, new rules regarding bank transfers have been implemented. The Financial Crimes Investigation Board (MASAK) requires complete information on financial transactions. Invoices for transfers of at least TRY 20 million are required.
- A novelty in the business field in 2026 is the increase in the minimum share capital of an LLC, from TRY 10,000 to TRY 50,000.
- An estimated growth of around 6.4% is expected in Turkey’s construction sector in 2026.
- Also in 2026, inflation is expected to fall to 23% by the end of the year.
Have you decided on setting up a company in Turkey? You might want to also collaborate with our team of accountants in Turkey and find out more about payroll and bookkeeping. Company incorporation in Turkey is a relatively simple process; however, we invite you to contact us and benefit from complete services.
If you are interested in opening companies in other European countries, such as Spain, Sweden or Ukraine, you may get in touch with our local representatives.