CHAPTER 07 · BUSINESS & BANKING
Choose whether and how to set up a business.
Compare personal investing, self-employment and a limited company before spending on incorporation.
A documented structure decision based on activity, liability, cost and permissions.
A company is not the starting requirement
If you only receive personal foreign rent, dividends or pensions, assess those receipts first. Incorporation is not a condition of the personal 20-year exemption. Creating a company can add tax, accounts, bank onboarding and closure obligations without solving your actual problem.
If you will earn actively, describe the real operating model: the services or goods, clients, premises, delivery location, turnover, employees and commercial risks. Ask an accountant to distinguish commercial activity from regulated or professional self-employment; “sole trader” is an English shorthand, not a complete Turkish tax classification.
Compare the routes
| Route | Often considered when | Responsibilities to assess |
|---|---|---|
| Personal income, no business activity | You hold investments or receive pensions/rent personally | Personal tax, source-country duties and evidence; no business formed merely to claim Article 20/D |
| Individual business / self-employment | One person provides services or trades without a separate company | Personal liability, income tax, invoicing, VAT, social security and registrations |
| Limited company (Ltd. Şti.) | A separate operating entity, partners or liability separation is useful | Company tax and records, capital, management, payroll and shareholder-payment treatment |
| Joint-stock company (A.Ş.) | Governance, investment or sector needs warrant the structure | Higher capital and formalities; suitability requires professional advice |
| Retain an overseas company | You already have an established foreign business | Management location, permanent establishment, payroll and both countries’ rules |
Compare full costs and legal exposure
Obtain a written first-year and annual cost schedule for each plausible route: formation, capital, accountant, e-document tools, registered address, social contributions, payroll, insurance, permits and closure. Capital is funding committed to the business, not simply a government application fee.
A limited company separates the legal entity from shareholders, but the protection is not absolute. Public-debt liability, management duties, guarantees and wrongful conduct need legal review. Decide ownership, signing powers, profit distribution and partner exit terms before registering.
Check relief independently
Separate personal foreign-income relief from business deductions, incentives and VAT export treatment. Eligibility, rates, transfer conditions, filing and evidence differ. Ask for the current legal basis and a calculation for your activity instead of an advertised universal “zero tax company”.
An export-service deduction may apply only to specified activities and qualifying overseas use, with additional conditions. A customer based abroad does not necessarily qualify every service. Check current GVK Article 89 and KVK Article 10 where relevant, and obtain a separate VAT analysis.
Before you instruct formation
- Confirm residence and work rights for the intended role.
- Agree activity classification and necessary professional/municipal licences.
- Choose the legal form and record why it fits.
- Obtain written formation, accounting and closure quotations.
- Approve a realistic business address, ownership and banking plan.
- Set an actual trading start date and a filing-responsibility calendar.
Your document checklist
This is a preparation list. The receiving authority or bank may require additional or different documents.
- Business activity description and draft client contracts
- Projected receipts and expenses in original currencies
- Legal-form comparison and fee quotes
- Work-rights confirmation
- Ownership/signing-power plan
- Required licences or professional authorisations
Ask your adviser
- Would a company actually improve my position?
- What personal liabilities remain?
- Which taxes and contributions are due even without profit?