Sole Proprietorship Registration in Türkiye: 2026 Essential Steps

Sole proprietorship registration in Türkiye remains one of the most practical and cost-effective options for individual entrepreneurs, freelancers, consultants, and small-scale business owners in 2026. This business model is particularly attractive due to its simplified setup, minimal capital requirements, and straightforward tax compliance compared to incorporated entities.

At Finlexia Turkish Accounting Firm, we have been advising local and foreign entrepreneurs on Turkish business establishment and governance matters since 2017. Our company formation lawyers provide a comprehensive, up-to-date overview of sole proprietorship registration in Türkiye, including legal requirements, procedures, taxation, advantages, limitations, and strategic considerations.

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Starting a business in Türkiye as a sole proprietor offers entrepreneurs a streamlined path to establishing their commercial presence. For foreign nationals and Turkish citizens alike, understanding the registration process is crucial for launching operations efficiently and in full compliance with Turkish commercial law.

What is a Sole Proprietorship in Türkiye?

A sole proprietorship, known as “şahıs şirketi” or “gerçek kişi işletmesi” in Turkish, represents the simplest form of business structure available for entrepreneurs in Türkiye. Unlike more complex entities such as limited liability company formation or joint stock company formation, a sole proprietorship is owned and operated by a single individual who assumes full personal liability for business debts and obligations.

This business structure is particularly attractive for small-scale entrepreneurs, freelancers, consultants, and artisans who wish to formalize their commercial activities without the administrative complexity associated with corporate entities. While other options like branch office formation or liaison office formation exist for foreign companies, sole proprietorship remains ideal for individual business owners seeking direct market entry.

What is a Sole Proprietorship (Şahıs Şirketi) in Türkiye?

A sole proprietorship, or Şahıs Şirketi, is the simplest legal structure for an individual to operate a business in Türkiye. Unlike more complex structures such as a [joint stock company formation] or a [limited liability company formation], a sole proprietorship is inextricably linked to the individual owner.

Key Characteristics:

• Single Owner: The business is owned and managed by one person.
• Direct Liability: The owner has unlimited personal liability for the business’s debts and obligations. This is a critical factor to consider, as the owner’s personal assets are not legally separate from the business’s assets.
• Ease of Setup: The formation process is significantly simpler, quicker, and less bureaucratic than other company types.
• Lower Initial costs of company formation: Startup costs are minimal.
• Flexible Accounting: Accounting is simpler, and tax compliance is generally less burdensome.

The Strategic Roadmap for Sole Proprietorship Formation

The decision to choose a sole proprietorship is often driven by a desire for speed and simplicity. While it doesn’t follow the formal procedures required for structures like a branch office formation, liaison office formation, or foreign subsidiary formation, it still requires careful adherence to legal and tax procedures.

Our streamlined roadmap for formation for a sole proprietorship generally involves these key steps:

1. Obtaining a Turkish Tax Identification Number (TIN)

This is the foundational step. Every entrepreneur, foreign or Turkish, must obtain a unique TIN. This number is essential for all official and financial transactions.

2. Selecting a Business Address

You must designate an official business address. This can be a physical office, a co-working space, or, for certain businesses, a virtual office, provided it meets local municipal requirements.

3. Formal Registration with the Tax Office (Vergi Dairesi)

This is the core of the registration process. It involves applying to the local tax office corresponding to your business address.

4. Municipal Registration

Depending on your business type and location, you may need to register with the local municipality to obtain necessary permits and licenses.

5. Social Security Registration (SGK)

As a self-employed individual, you must register with the Social Security Institution to comply with mandatory insurance contributions.

Crucial Insight: While the initial setup is easy, maintaining compliance requires continuous diligence. This is where having experienced Turkish company formation lawyers becomes invaluable.

Required Documents for Sole Proprietorship Registration

While the documentation for a sole proprietorship is less extensive than for a complex structure like a free zone company formation, the accuracy and completeness of the submitted materials are paramount.

The basic required documents for company formation for a sole proprietorship generally include:

1. Application Form: The official registration form provided by the Tax Office.
2. Rental Contract or Title Deed: Proof of the official business address.
3. Turkish Tax Identification Number: Your personal TIN.
4. Notarized Power of Attorney (if applicable)
5. Passport Copy and Notarized Translation (for foreigners): Proof of identity.

Tax and Compliance Landscape

One of the significant advantages of a sole proprietorship is the simplified tax regime, although it is crucial to understand the implications for [corporate taxation guide].

1. Income Tax (Gelir Vergisi)

The profits of a sole proprietorship are subject to Türkiye’s progressive income tax rates, which can range from 15% up to 40% (as of 2025/2026 rates). Unlike corporate tax structures, where the rate is generally flat, your personal income tax bracket determines your business’s tax rate.

2. Value Added Tax (VAT – KDV)

Most goods and services sold are subject to VAT, which the sole proprietor must collect and remit to the tax authorities monthly.

3. Simple Accounting Principles

Sole proprietorships typically use a ‘Simple Method’ (Basit Usul) or ‘Book-Based Method’ (İşletme Hesabı Esası) of accounting, which is far less onerous than the full ‘Turkish Commercial Code‘ (TCC) compliance required for larger companies.

4. The Importance of a Corporate Bank Account Opening

While you are personally liable, it is best practice to open a separate commercial bank account. This separation, even if not legally mandated, makes accounting, expense tracking, and tax reporting significantly cleaner and more professional.

Sole Proprietorship Registration vs. Formal Company Formation in Türkiye

When deciding on your legal structure, it’s essential to weigh the trade-offs of the sole proprietorship against other options.

Choosing a sole proprietorship is excellent for testing the market, very small operations, or service-based businesses with low risk. However, as your business grows, many entrepreneurs opt to transition to a formal [company formation in Türkiye] structure to protect their personal assets from business liabilities.

Contact us for Sole Proprietorship Registration in Türkiye

Sole proprietorship registration in Türkiye requires expert navigation of legal requirements, documentation, and procedural steps. Since 2017, Finlexia Turkish Accounting Firm has provided comprehensive company formation and governance services from our Istanbul office, supporting entrepreneurs and businesses in multiple languages throughout their Turkish market entry.

Contact Finlexia Turkish Accounting Firm today to schedule a consultation with our Turkish company formation specialists. Let us transform your business vision into Turkish market reality with professional expertise, multilingual support, and three years of proven success in company formation and corporate governance.