Complete Guide to Subsidiary Formation in Türkiye: Essential Steps for 2026

Foreign subsidiary formation in Türkiye offers international businesses a strategic gateway to European and Middle Eastern markets. As one of the world’s fastest-growing economies, Türkiye provides an attractive environment for foreign investment through its robust legal framework and business-friendly regulations.

At Finlexia Turkish Accounting Firm, we have guided hundreds of international companies through successful subsidiary establishment since 2017. Our company formation lawyers walk you through everything you need to know about creating a subsidiary presence in Türkiye.

Table of Contents

Understanding the Legal Nature of a Subsidiary in Türkiye

A subsidiary in Türkiye is an independent Turkish-registered legal entity fully or partially owned by a foreign parent company. Unlike a branch, a subsidiary has its own legal personality, limited liability, and corporate governance requirements. This allows for strategic autonomy, simplified risk management, and easier engagement with local customers and suppliers.

Subsidiary vs. Branch vs. Liaison Office: Key Differences

Before committing to a legal model, foreign investors often compare subsidiaries with branches and liaison offices:

Subsidiary

• Independent Turkish legal entity
• Full commercial activity permitted
• Own liability separate from the parent entity
• Easier for local banking, finance, and contracting
• Subject to Turkish corporate tax

Branch Office

• Not a separate legal entity
• Parent company is fully liable
• Often easier to register but subject to limitations

Liaison Office

• Cannot conduct commercial activities
• Limited to research, representation, and coordination
• Tax-exempt due to non-commercial nature

For long-term market operations, subsidiaries remain the preferred structure.

What is a Subsidiary Company in Türkiye?

A subsidiary is a locally incorporated entity with its own legal personality, where a foreign parent company holds majority ownership. Unlike a branch office formation or liaison office formation, a subsidiary operates as an independent Turkish legal entity with limited liability protection.

Key characteristics include:

• Separate legal identity from the parent company
• Limited liability protection for shareholders
• Full operational capacity in Turkish markets
• Ability to enter contracts and own property independently
• Subject to Turkish corporate law and taxation

Types of Subsidiary Structures Available

The Turkish Commercial Code (TCC) primarily offers two corporate forms suitable for a subsidiary: the Limited Liability Company (Limited Şirket – Ltd. Şti.) and the Joint Stock Company (Anonim Şirket – A.Ş.). The choice between them is a critical initial step in the process of company formation in Türkiye.

Limited Liability Company (LLC)

The limited liability company formation is the most popular choice for foreign subsidiaries. This structure requires:

• Minimum one shareholder (individuals or legal entities)
• Minimum capital of 50,000 Turkish Lira
• No maximum shareholder limit
• Simplified management structure
• Lower incorporation costs

Joint Stock Company (JSC)

For larger operations, joint stock company formation offers advantages:

• Minimum capital of 250,000 Turkish Lira
• Ability to issue shares publicly
• Suitable for large-scale investments
• More complex governance requirements
• Enhanced credibility for major projects

Free Zone Companies

Free zone company formation provides special benefits for export-oriented businesses, including customs exemptions and tax incentives. The above structures allow 100% foreign ownership and offer flexibility for operational, financial, and tax planning.

Essential Requirements for Subsidiary Formation

Shareholder Structure

Foreign companies can own 100% of a Turkish subsidiary. There are no mandatory local partner requirements, making Türkiye particularly attractive for wholly-owned foreign operations.

Capital Requirements

Minimum capital varies by structure, but foreign currency can be used for initial capitalization. The capital must be deposited into a Turkish bank account during the formation process.

Legal Representative

At least one director must be appointed. While Turkish residency is not mandatory for directors, having a local representative facilitates operations.

Step-by-Step Formation Process

1. Name Reservation

Reserve your company name through the Turkish Trade Registry. The name must be unique and comply with Turkish naming regulations.

2. Prepare Documentation

Gather all required documents for company formation, including:

• Parent company documents (apostilled and translated)
• Shareholder identification documents
• Articles of association
• Board resolutions authorizing subsidiary formation
• Power of attorney for local representatives

3. Notarization and Translation

All foreign documents require official translation into Turkish and proper authentication through apostille or consular legalization.

4. Capital Deposit

Open a capital deposit account and transfer the minimum required capital. Obtain a capital deposit certificate from the bank.

5. Trade Registry Registration

File your application with the Trade Registry Office. Upon approval, your company receives a registration number and tax identification.

6. Tax Office Registration

Register with the local tax office to obtain your tax plate and activate your corporate tax obligations.

7. Post-Formation Procedures

Complete additional registrations including:

• Social security institution registration
• Chamber of commerce membership
• Corporate bank account opening
• Signature circular preparation

Timeline and Costs

Formation Timeline

The complete timeline for formation typically requires:

• Document preparation: 1-2 weeks
• Trade registry approval: 3-5 business days
• Tax registration: 2-3 business days
• Bank account opening: 1-2 weeks

Total process: Approximately 4-6 weeks for straightforward applications.

Investment Costs of Subsidiary Formation in Türkiye

Understanding the costs of company formation helps in budget planning:

• Official registration fees: €500-€1,000
• Notary and translation costs: €300-€600
• Legal service fees: €2,000-€5,000
• Minimum capital requirement: Varies by structure
• Annual compliance costs: €1,500-€3,000

Taxation and Regulatory Compliance

Turkish subsidiaries are subject to corporate income tax at competitive rates. Our detailed corporate taxation guide covers:

• Corporate tax rates and incentives
• VAT registration and obligations
• Transfer pricing requirements
• Double taxation treaties
• Tax planning strategies

Additional Considerations for Foreign Investors

Residency and Work Permits

Foreign directors and employees may need:

• Residency for business owners to manage operations locally
• Work permit for company owners and key personnel

Our team handles all immigration procedures alongside company formation.

Ongoing Governance

Turkish law requires:

• Annual general assembly meetings
• Regular financial reporting
• Independent audit for certain company sizes
• Compliance with Turkish Commercial Code

Why Choose Subsidiary Formation?

Establishing a subsidiary offers distinct advantages over alternative structures:

Liability Protection: Complete separation from parent company liabilities

Market Credibility: Enhanced trust with Turkish customers and partners

Operational Flexibility: Full capacity to conduct business activities

Tax Efficiency: Access to Turkey’s double taxation treaty network

Banking Benefits: Easier access to local financing and banking services

FAQs About Subsidiary Formation in Türkiye

For answers to frequently asked questions about the process, visit our comprehensive company formation FAQs page.

Contact us for Subsidiary Formation in Türkiye

Establishing a subsidiary in Türkiye requires expert legal guidance and thorough knowledge of Turkish commercial law. At Finlexia Turkish Accounting Firm, we have provided specialized company formation and governance services since 2017, helping international businesses successfully enter the Turkish market.

Our multilingual team in Istanbul offers end-to-end support, from initial consultation through post-formation compliance. We handle all legal, administrative, and regulatory aspects of your subsidiary formation, ensuring a smooth and efficient process.

Contact Finlexia Turkish Accounting Firm today for a personalized consultation. Let our three years of experience work for your business success in Türkiye.