Setting Up a Company in Turkey: LLC vs JSC vs Branch Office

The Decision Most Investors Get Wrong

When foreign investors enter Turkey, the choice between Limited Liability Company (LLC), Joint Stock Company (JSC), and a foreign branch office is often made for the wrong reasons — usually based on what an introduction agent or property developer recommended, rather than what the actual operating model requires.

Each structure carries distinct legal, tax, and operational consequences. The wrong choice can mean unnecessary capital lockup, unfavorable tax treatment, or regulatory friction that becomes apparent only years later. This guide outlines the trade-offs cleanly.

Limited Liability Company (Limited Şirket / LTD)

The LLC is Turkey's most common business vehicle for small to medium operations. Minimum share capital is TRY 50,000. It can be formed with a single shareholder (which can be a foreign individual or entity). Liability is limited to the company's share capital.

Advantages: Lower minimum capital, simpler governance, fewer reporting requirements, and faster setup (typically 5-10 business days). Suitable for advisory firms, trading companies, and small-to-mid scale operations.

Limitations: Cannot issue shares to the public. Share transfers require notary involvement and shareholder approval — making LLC unsuitable for businesses that anticipate equity rounds, ESOPs, or complex investor structures.

Joint Stock Company (Anonim Şirket / A.Ş.)

The JSC is Turkey's vehicle for larger operations and any business contemplating outside investment. Minimum share capital is TRY 250,000 (or TRY 500,000 for non-public companies adopting registered share structure). It can have one or more shareholders.

Advantages: Free transferability of shares, ability to issue different share classes, suitable for public listing on Borsa Istanbul, and structurally compatible with international VC/PE investment. Required for banking, insurance, and certain regulated activities.

Limitations: Higher minimum capital, more rigorous governance requirements (mandatory board structure, audit obligations), and longer setup timeline. Operating costs are meaningfully higher than LLC.

Branch Office (Şube)

A branch office is a registered extension of a foreign parent company — not a separate legal entity. The branch operates under the parent's legal personality, and the parent bears full liability for the branch's obligations.

Advantages: No separate share capital required, profits are repatriated more flexibly to the parent, and the structure is simpler for purely commercial representation activities.

Limitations: Full liability exposure for the parent, restricted scope of activities (typically must align with parent's registered business), and structurally inappropriate for any operation that contemplates Turkish equity participation or local stakeholder structures.

Tax Treatment: The Critical Variable

All three structures are subject to Turkish corporate income tax — generally 25% as the headline rate, but with the April 2026 incentive package, this drops to 9% for manufacturing exporters and 14% for other exporters.

A branch office is taxed only on income generated in Turkey. The parent's global income is not subject to Turkish tax. This is sometimes seen as advantageous, but the trade-off is that branch losses cannot be offset against parent income for Turkish tax purposes.

For LLC and JSC, dividend distributions to non-resident shareholders are subject to 10% withholding tax (reducible under applicable double tax treaties — Turkey has DTTs with 80+ countries). VAT registration is mandatory for any structure with Turkish operations.

Which Vehicle for Which Investor

Foreign individual or family investing in real estate or operating a small Turkish business → LLC. Lower capital, simpler operation, sufficient legal protection.

Multinational corporation establishing a regional headquarters in Istanbul → JSC, particularly if leveraging the IFC tax incentives. The structure is recognizable to international counterparties and supports complex governance.

Foreign company doing pure commercial representation, project work, or trade facilitation → Branch Office. Lighter capital commitment, faster setup, tax neutrality on parent global income.

Tech startup or scaleup with international VC backing → JSC. The LLC structure will create friction at every funding round.

Setup Process Overview

Setup involves: drafting Articles of Association (notarized), obtaining a tax identification number for foreign shareholders, opening the company's bank account and depositing share capital, registration with the Trade Registry (Ticaret Sicili), tax registration, and Social Security registration if employing personnel.

For LLC: typically 5-10 business days end-to-end. For JSC: 10-15 business days. For branch: 15-25 business days due to additional parent company documentation requirements (notarized and apostilled corporate documents).

Foreign shareholders do not need to be physically present in Turkey for setup if represented by power of attorney to a Turkish lawyer.

How Nordic BS Helps

We handle entity setup as a structured engagement: structure recommendation based on your operating model and investment goals, full documentation drafting and notarization, banking and capital deposit coordination, all government registrations, and post-setup compliance setup including accounting and tax filings.

For initial structure consultation, contact our team.