A Foreign Game Studio's Journey into Turkey: From the First Email to the First Dividend

Regulatory note: Reviewed on 8 September 2026 against Law No. 4691, Corporate Tax Law Arts. 10/1-ğ and 32/C, Income Tax Law Art. 17, Presidential Decrees No. 11257 and 10803, Income Tax General Communiqué No. 335, the current work-permit criteria and the Service Sectors Leap Programme documents. Incentive, banking, tax and work-permit outcomes depend on the company’s activity and the facts of the file.

From the first email to the first dividend — a map read along the time axis.

We began the meetings with a Latvia-based mobile game studio for setting up their Turkish operation. An 80-person team; live titles on the App Store and Google Play; a clear intent to move into Turkey. There was no single question on the first table — but every question pointed at the same heading: who runs this process, how, and over what timeline?

If you can answer that in thirty minutes, you are not a good advisor. The same question, in under an hour, fans out into pages of sub-questions, a four-month execution path, and a five-year plan. “Setting up an operation in Turkey” is not a single step; it is a map of interdependent decisions arranged on a timeline.

This piece is the written form of that map. It follows the spine of the process by which we placed this Latvian studio on the ground in Turkey. The name is anonymized; the process is real.

In 60 Seconds (TL;DR)

TL;DR — 60 seconds

80-person Latvian mobile game studio’s Turkey journey: a case-specific A.Ş. choice, Technopark treatment for qualifying income, the 100% service-export earnings deduction where all statutory conditions are met, and transfer pricing.

3 risks: GVK Art. 17 is limited to qualifying technology ventures and has an early-sale clawback; bank timing is risk-based rather than fixed; Pillar Two is a separate analysis for EUR 750M+ groups.

First questions: Which entity owns the IP, who is the contractual customer, where is the service used, and which income stream qualifies for which regime?

A Latvia-headquartered 80-person mobile game studio’s Turkey deployment took four months. Decision in this case: Joint-Stock Company (A.Ş.). The reasons were investor-round readiness and share-transfer flexibility. The GVK Art. 17 employee-share exemption required a separate technology-venture qualification; A.Ş. status alone was not enough. Technopark treatment and the service-export deduction were assessed income stream by income stream, with minimum corporate tax modelled separately after the new entity’s first three accounting periods.

The real value was sequencing structural decisions, preparing the bank KYC + UBO file in advance, and engineering the tax architecture from day one. Payroll scenarios were recalculated with the current 2026 SGK ceiling and meal-benefit conditions rather than relying on one headline saving figure.

Topology — The Structure at a Glance

Visual reading: a wholly owned Turkish JSC operates inside Technopark; zone incentives are tested for qualifying software income and personnel. If the Latvian shareholder is the beneficial owner and residence-document conditions are met, the Türkiye–Latvia treaty caps Turkish tax on the gross dividend at 10%.

Month 0 — Intent and Structural Choice

The Latvian studio had already made part of its decision intuitively before walking in. The real reason they were moving to Turkey was never a single tax article; it was a package:

• The corporate-income-tax exemption that the technology development zone regime grants on qualifying software income,
• The income-tax withholding exemption and the social-security premium support for R&D personnel,
• The ability to bring overseas marketing spend under Turkish government export-support programs through a Turkey-based structure,
• And as of 2026, the 100% corporate income deduction on software and digital-game services provided to non-resident clients.

And underneath all of that: the Turkish game-developer talent pool is both broader and structurally different in cost terms compared with Latvia. Moving the operation to Turkey was not a technical decision; it was an economic one.

The first question on the table consolidated into a single line: which structure do we come in with?

For this studio’s objectives, the answer became clear quickly: a Joint-Stock Company (A.Ş.). Three reasons, each pointing at the future:

1. Investor optionality. Within five years the studio could realistically raise additional capital, strike a strategic partnership, or open exit/sale conversations. A.Ş. share transfers generally avoid a notarial transfer agreement, but share type, articles, board approval and registration/notification duties must still be checked for the transaction. An Ltd. transfer involves a notarised agreement and company/registry steps.
2. Flexibility in shareholder count. The A.Ş. accommodates a flexible shareholder base; the Ltd. enters a fresh bureaucratic cycle on every share movement.
3. Tax position. Capital gains on the sale of A.Ş. shares can sit in a favorable position when the required securities (share certificates / temporary share documents) have been issued and the holding-period condition is met. The same mechanism cannot be set up in an Ltd.

The share-based wage exemption (Income Tax Law Art. 17) is not available to every A.Ş. The employer must qualify as a technology-venture company under the Ministry criteria and must give the employee a share certificate free of charge or at a discount. An Ltd. cannot issue the share certificate contemplated by this provision.

The exemption also carries an early-sale risk: if the employee sells within 2 years, 100% of the exempt tax is clawed back; in years 3–4, 75%; and in years 5–6, 25% — collected from the employer with late-payment interest.

The tax conditions, transfer restrictions, buyback terms and vesting schedule therefore need to be designed together.

The decision was made. The articles of association were not drafted with off-the-shelf language; they were written with provisions specific to game-studio activities — software development, digital product sales, licensing, royalties management — that would not later raise friction in a service-export claim or a Technopark application.

The First Six Weeks — Formation and the Banking Wall

After the decision, speed.

Registering the foreign corporate shareholder inside the Turkish system, filing on MERSİS, and registering the articles of association were completed quickly. In parallel ran another flow: travel plans of the shareholders, notary appointments, and the careful scoping of the powers of attorney. The invisible work is the real work. If a power of attorney is written too narrowly, the investor flies back to Istanbul for every document; written too broadly, the banks reject it. Finding the right midpoint is an experience matter.

In this case the Latvian studio’s officers came to Turkey once because the selected bank and branch requested an in-person signature. This is not a universal statutory requirement: remote identification is legally possible, but whether a bank offers it or requests an additional physical step depends on its risk assessment. The remaining formation steps were completed through powers of attorney accepted for their respective scope.

Then came the real friction zone: the bank.

Opening an account in Turkey for a company with a foreign corporate shareholder is the most concrete place where the country’s lack of bureaucratic standardization makes itself felt. The same document file gets a different reaction depending on the bank, the branch, even the relationship manager. In our case the process closed quickly.

The reason was structural preparation: KYC and UBO (Ultimate Beneficial Owner) files were assembled in advance, the account architecture (TRY + EUR + USD) was planned from the start, and the right commercial segment — one with experience in foreign-capital structures — was chosen.

The first documented FX inflow on the bank side simultaneously laid the legal ground for any future dividend remittance.

Incentives, Marketing Refunds, and Operational Build-Out

Company and bank, done. The next layer: anchoring the incentive architecture.

One of the studio’s core motivations was entry into the Technopark regime. This is not a routine registration; it requires a location decision, team structuring, a lease agreement, and a long application file.

Software income earned inside the Technopark enjoys the corporate-income-tax exemption — but if the revenue architecture is not set up correctly from day one, certain revenue types fall outside the exemption.

In particular, the tax distinction between ad revenue (IAA) and in-app purchase revenue (IAP) for free-to-play game studios is a critical line item that must be clarified at the start. Changing this distinction later is expensive.

Alongside this, eligibility under the Ministry of Trade’s Service Sectors Leap Programme was assessed. The Ministry’s 2026 ceiling table lists digital-product promotion for the IT sector at a 50% support rate, TRY 50 million annually and TRY 15 million per product; platform commissions at 50%, TRY 20 million annually and TRY 4 million per product. Duration, product count, target-market, payment-document and application conditions apply separately; incurring an expense does not by itself create an entitlement.

The Latvian studio was wholly unfamiliar with Turkey’s tax and accounting system. To close that gap, all of the company’s statutory responsibilities, tax-return cycles, annual reporting calendars, and incentive-application workflows were walked through step by step. Behind-the-scenes but critical items — such as the annual investment declaration every foreign-capital company is required to file — were placed onto the corporate calendar. The operation became a calendar discipline.

End of Year One — The First Full Set of Books

Year one’s hidden exam is transfer pricing. Every transaction with the foreign parent — management services, IP / royalties, shared-cost allocation, financing — must be priced on an arm’s-length basis. The most common structure in games is a hybrid of license and cost-plus: the Turkish studio handles development, the parent holds the IP. Built correctly, it stands up under audit; built incorrectly, it generates a retroactive assessment three years later. Annual mandatory documentation, return annexes, and benchmarking files have to be planned in from the start.

With Presidential Decree No. 11257 dated 30 April 2026, the service-export earnings deduction rate under Corporate Tax Law Article 10/1-ğ was raised from 80% to 100% for tax periods beginning on or after 1 January 2026.

This is not a VAT exemption or an automatic promise of zero tax. The customer must be resident abroad, the service must be used exclusively abroad, the invoice or equivalent document must be issued to that foreign customer, and the whole qualifying earnings amount must be transferred to Türkiye by the return filing date. A YMM attestation requirement is also checked where the deduction exceeds TRY 500,000.

In the domestic minimum corporate tax (Art. 32/C) computation, neither the Technopark exemption nor the Art. 10/1-ğ service-export deduction is generally among the items subtractable from the base. The rule does not apply to a newly operating entity for its first three accounting periods; later, the 10% floor depends on its own accounting profit, non-deductible expenses and statutory adjustments. Decree No. 10803 also requires monitoring the 2026 venture-capital investment rule where annual exempt Technopark earnings exceed TRY 5 million: 3% of the exempt earnings, subject to a TRY 100 million annual cap.

A service-export VAT exemption/refund analysis for App Store and Google Play revenue cannot be based only on the countries in which an app is available. The contractual customer, invoice addressee, payment flow, place of use and evidence separating any Turkish use must be analysed together. IAA, IAP and platform commissions should therefore be modelled as separate flows.

At the dividend distribution and parent-remittance stage, when Turkey’s double-taxation treaty with the investor’s home country is applied with the right documents (tax-residence certificate first), the reduced withholding rate applies. The documents the bank will ask for — the tax-return copy, the withholding receipt, the board resolution, the FX-purchase certificate from the initial capital inflow — were prepared in advance, removing weeks of waiting.

Three Regrets We See on the Ground

We have been working with foreign-capital firms for years. Looking back, the three- to five-year “I wish I had known” headlines collapse into three themes.

One: the lack of bureaucratic standardization. One institution gives you one answer; a different branch of the same institution gives a different answer for the same document. Two officers within the same branch can read the same file differently. The rule is not unclear; the consistency of application is unclear. Investors underestimate this friction at the start. Three years later, looking back, they see that most of their lost time and money came from the same file being read differently in different places.

Two: work-permit criteria depend on the role and activity code. For IT-sector employers, the employment and financial-capacity criteria do not apply to specified specialist roles such as software development, databases, mobile software, network security and enterprise architecture. The “up to two foreigners” limit belongs to those roles at employers outside the IT sector; it should not be transplanted automatically to a game studio. Foreigners working inside a Technopark require the Ministry of Industry and Technology’s favourable opinion. No standard approval time should be promised by nationality.

Three: the layered complexity of the tax and incentive system. The Turkish tax system is not a single tax. VAT, corporate income tax, minimum corporate income tax, withholding, stamp duty, non-deductible expenses — each carries its own logic. Multiple tax layers can stack on the same transaction. And the layers don’t work in isolation: using one incentive triggers another obligation; benefiting from a deduction opens a new reporting calendar; exceeding certain incentive thresholds brings on additional items like annual fund-transfer requirements. The most common surprise for a foreign investor is a third- or fourth-year assessment or a retroactive obligation notice. The regret is not about ignorance; it is that the initial books and obligation structure did not sense these layers.

Our Approach: One Front Door, Many Institutions Managed Behind It

From the moment a company is formed in Turkey, it exchanges data and documents with at least 12–15 institutions: Tax Offices, the SGK, Trade Registry Directorates, MASAK, the Central Bank, the Presidency’s Investment Office, the Migration Directorate, the Ministry of Labor and Social Security, the Ministry of Industry and Technology, the Ministry of Trade, the Revenue Administration’s e-infrastructure (e-invoice, e-ledger, e-archive), the Public Oversight Board, KVKK, Customs, municipalities.

Game-sector-specific: the Technopark management offices, the Ministry of Culture and Tourism’s copyright-work registration processes, the Service Exporters’ Association membership, the KOSGEB and TÜBİTAK support programs, App Store and Google Play platform reporting. None of these institutions knows how the others operate.

This is where our value proposition becomes specific: a single point of contact for the investor. We know which institution wants what, in which format, by which deadline.

Our actual contribution is anticipating the flow frictions that are written down nowhere. Twenty years of accumulated experience is the map of this terrain. If the Latvian studio’s process ran on schedule, the reason is not only command of the regulation; it is that the surprise points along the flow had already been marked in advance.

Closing

Investment is shaped not by the tax rate, but by time. The true variable in an investor’s hand is not capital; it is the calendar. The decisions made early draw the ceiling on the size the operation will reach five years later.

The Latvian studio understood this quickly. Today the operation in Istanbul runs on its own rhythm, and the team is focused only on building games. The Turkish entity functions as a smooth extension of the Latvia-based structure.

Our role is to stand in the same position at every stage of that journey: one point of contact, one interpreter, one operational partner. If you would like to spend your energy on global growth rather than on paperwork while shaping your entry strategy into Turkey, this is the architecture we can build together.

Frequently Asked Questions

Should a foreign-capital game studio set up a JSC or LLC in Turkey?

An A.Ş. may be the better fit when investor rounds, exits or share-transfer flexibility are anticipated; it is not an automatic answer for every studio. Minimum capital is TRY 250,000. The ITL Art. 17 employee-share exemption additionally requires technology-venture status and the other statutory conditions.

How does the Technopark regime apply to software revenue?

Qualifying software and R&D income may fall within the Law No. 4691 corporate-tax exemption, subject to the statutory conditions and the scope of the zone activity. Revenue streams such as in-app advertising and in-app purchases cannot be assumed to receive identical treatment without a line-by-line analysis.

Does the CTL 32/C domestic minimum corporate tax erode the Technopark exemption?

For a newly operating entity, Art. 32/C does not apply in the first three accounting periods. Afterwards, the Technopark exemption is generally not subtracted from the minimum-tax base; the actual amount must be computed from the entity’s own figures.

How long does it take to open a Turkish bank account for a foreign-parented company?

There is no fixed statutory timeline. A pre-prepared KYC + UBO file helps, but the bank’s risk assessment, ownership chain and additional-document requests determine timing.

What is the hidden risk in the GVK Art. 17 employee-stock exemption?

First verify the employer’s technology-venture status and all ITL Art. 17 conditions. If an exempt share is sold within 2 years, 100% of the tax is recovered from the employer; in years 3–4, 75%; and in years 5–6, 25%, with late-payment interest.

What 2026 incentives does the Ministry of Trade offer to the digital-games sector?

The 2026 ceiling table lists IT-sector digital-product promotion at 50%, capped at TRY 50 million per year and TRY 15 million per product; platform commissions at 50%, capped at TRY 20 million per year and TRY 4 million per product. The programme’s other eligibility limits also apply.

How many times does the Latvian investor need to travel to Turkey?

There is no fixed number. In this case one trip was made because of the selected bank’s policy; another bank may offer remote identification or request additional physical steps. Acceptance of a power of attorney is also transaction- and institution-specific.

Related Reading

• Turkey Technopark 2026 — Law 4691 + Pillar Two + YMM attestation
• Turnkey Company Formation in Turkey: A 14-Step Roadmap — A.Ş. vs Ltd. selection
• Foreign Investor Banking in Türkiye — AML/KYC process
• IFC 2026 and QSC — Group structure alternative
• Service: Technopark Setup & R&D Centre — Process, scope, pricing
• Guide: Foreign Investor Onboarding — End-to-end roadmap

Official sources

• Ministry of Trade — establishing a company in Türkiye
• Ministry of Industry and Technology — Technology Development Zones Law No. 4691
• Revenue Administration — Decree No. 11257: service-export earnings deduction rate
• Revenue Administration — Decree No. 10803: venture-capital investment threshold and rate
• Revenue Administration — Income Tax General Communiqué No. 335
• Ministry of Trade — Service Sectors Leap Programme and current annexes
• Ministry of Labour and Social Security — work-permit assessment criteria
• Revenue Administration — Türkiye–Latvia double-tax treaty