Foreign entrepreneurs can choose between several types of business entities that are suitable for small and medium-sized enterprises in Turkey. For a small business, a sole trader or sole proprietorship in Turkey is the most appropriate form of doing business. The sole trader can change its status to a limited liability company if the owner decides to expand his or her activities. Our experts in opening a business in Turkey can offer information on the sole proprietorship as a business form and help you establish such an entity.
| Quick Facts | |
|---|---|
| Who can register as sole trader in Turkey? | Turkish citizens and foreign entrepreneurs who want to do business on their own. |
A sole trader is also known as | Self-employed |
Legislation | Turkish Commercial Code |
| Authority in charge | Turkish Trade Register |
| Minimum share capital | Not imposed |
| Documents | – valid passport/ID, – standard forms, – qualifications/diplomas in certain cases |
| Unlimited liability as a sole trader in Turkey (YES/NO) | YES |
| Complete control over the business (YES/NO) | YES |
| Licenses and business permits | Necessary if specific activities are carried out in Turkey. |
| Social security and tax registration (YES/NO) | YES |
| Work permit for foreigners who want to register as sole traders in Turkey | Required |
| Taxation of sole proprietorships in Turkey | Personal income tax ranging from 15% to 40% |
| Flexibility of a sole proprietorship in Turkey | 100% in running the business and making decisions |
| Recommendations | Sole traders should sign an insurance policy to cover the entire business in case of unwanted situations (financial risks, damages, bankruptcy, etc.). |
| Transitions to another business structure | Available option. The limited liability company or the joint stock company might be proper choices for business development. |
Steps in opening a sole trader in Turkey
Foreign investors must first obtain a long-term visa or a permanent residence permit in order to start any type of business, including a Turkish sole proprietorship. Even if no share capital is required, a sole trader should first draft a solid plan which will enable him or her to determine the right amount to start operating. Here are some of the main steps linked to the incorporation of such an entity:
- the sole trader must also open a bank account in Turkey;
- considering the sole trader will carry out economic activities in his or her own name, one must carefully choose the name of the company. The trade name will be registered with the Trade Registry in Turkey;
- the establishment of a Turkish sole trader consists in filing an application form with the Trade Register and registering with the local tax authorities 30 days before starting operating;
- it must also register for social security purposes. This is the greatest advantage of setting up a sole proprietorship in Turkey.
- a sole trader does need a manager or a local representative to keep in contact with the local authorities, however it is allowed to hire personnel;
- with respect to taxation, sole proprietorships in Turkey must file an annual tax declaration. They will also be subject to the individual income tax in Turkey.
Here is an infographic we have prepared on this topic:
What are the main advantages of a sole proprietorship in Turkey?
Foreign entrepreneurs who want to start a business on their own in Turkey benefit from low-cost formation, flexibility, and a simplified tax process, among others:
- the business income is considered personal income when having a sole proprietorship in Turkey.
- the administrative procedures for sole traders in Turkey are minimal. There is no minimum share capital required to open this structure, which is a great advantage, offering flexibility from the start in business.
- all the business decisions can be made by the owner. There are no other shareholders or partners who have to agree on a business project.
- lower operating costs of a sole trader in Turkey are another advantage.
- the profits generated by the company belong 100% to the entrepreneur who carries out his activities as a sole trader in Turkey.
- not having a separate legal entity from the owner is a great advantage.
So, there are many reasons, and better said, benefits why local and foreign entrepreneurs choose the sole proprietorship in Turkey. If you are ready to set up a company in Turkey and need more details about this business entity, we invite you to discuss with our Turkish agents. Our specialists can represent you with a power of attorney in all business incorporation procedures.
About the economy of Turkey in a few lines
It is normal to analyze the market where you want to do business and know exactly where you want to develop. If you want to open a sole proprietorship in Turkey, the following information may be useful:
- the economic growth registered by Turkey in 2024 was around 3.2%.
- the driving factors that sustained the economic growth in Turkey were the exports, construction, and household consumption, among others.
- Turkey’s economy is expected to grow moderately in 2025, with inflation set to stabilize at around 32% by the end of the year.
- also for 2025, Turkey’s GDP value is estimated to reach and even exceed USD 1.4 trillion.
If you have business development plans in Turkey, don’t forget that you can also rely on the support offered by our accountants in Turkey. So, you can benefit from company incorporation in Turkey with all the tools at your fingertips. We, therefore, invite you to contact our local agents and discuss more about the business registration services we offer for those interested in starting a sole proprietorship.