Setting Up a Foreign-Invested Company in Turkey (2026): Notice, Not Permission — 4 Safeguards and 5 E-TUYS Filings

People often ask how to obtain “permission under Law No. 4875.” For the incorporation of a foreign-invested company in Turkey, there is no prior permission or approval stage arising from Law No. 4875. Liaison offices are different: they remain subject to a separate permission regime. The Ministry has general authority, while the institutions authorised under sector-specific legislation are competent for the financial fields described in Article 6/4 of the Implementing Regulation.

Law No. 4875 turned the company-formation model from approval into notification. The state does not screen the investor at the door under that Law; it requests information after the investment. Any permission required by the special law governing the company’s sector still applies.

Regulatory note: This guide was prepared from the Foreign Direct Investment Law No. 4875 dated 5 June 2003 (Official Gazette 17 June 2003-25141; Arts. 1-5 and Additional Art. 1) and its Implementing Regulation (Official Gazette 20 August 2003-25205; Arts. 3, 5, 6, 8-11 and 18). Income Tax General Communiqué No. 334 was checked against the primary text. No Ministry of Industry and Technology regulation setting out the implementation of the Qualified Service Centre regime was found in the sources reviewed for this guide. Because the complete daily and duplicate Official Gazette index was not searched, this guide does not claim that no such regulation has been published. Check the Official Gazette and Ministry material again on the transaction date. Scope limit: this is not a complete catalogue of special laws restricting foreign ownership; energy, mining and some other regulated sectors were not reviewed. Take the final decision with your adviser.

60-second summary

• No prior permission or approval under Law No. 4875 is required to form the company. Article 1 expressly converts the prior permission and approval system into a notification system. Law No. 4875 sets no foreign-investor-specific minimum capital. The capital required for the company type under the Turkish Commercial Code and any sector-specific permission remain applicable. Law No. 4875 regulates the investor’s treatment, not the mechanics of incorporation. A liaison office remains subject to separate permission under Article 3/h.
• Four safeguards. National treatment under Article 3/a; protection from expropriation without public interest and compensation under Article 3/b; free transfer of profits and specified proceeds under Article 3/c; and national or international arbitration for the contract categories in Article 3/e, subject to applicable legislation and the parties’ agreement.
• Five filings plus one entry procedure. Article 5/b of the Implementing Regulation covers initial registration after user authorisation, an annual activity filing and three transaction-triggered filings. Four deadlines are one month; the annual filing is due by the end of May. Article 5/c separately applies when a foreign investor acquires an interest in a previously wholly domestic company or participates from outside the company in its capital increase.
• One provision is no longer in force. Article 3/d, formerly concerning real-estate acquisition by foreign-invested companies, was annulled by the Constitutional Court. The annulment took effect on 16 October 2008.
• Freedom is not absolute. Article 3/a begins with a reservation for international agreements and special laws. The Council of State’s 8th Chamber applied that reservation in 2025.
• The Law expanded in 2026. Additional Article 1, added by Law No. 7582 and effective on 4 June 2026, introduced the qualified service centre definition. Its foreign-related-party revenue threshold is 80%.

The founding sentence: from permission to notification

Law No. 4875 repealed the former Foreign Capital Encouragement Law No. 6224 in 2003 and reversed the operating logic: invest first, notify afterwards.

When a foreign individual or legal entity forms a limited or joint-stock company in Turkey, Law No. 4875 does not impose a special prior permission. The minimum capital is the amount the Turkish Commercial Code applies to that company type for everyone; there is no additional foreign-investor floor. The Law likewise does not impose a foreign-investor-specific rule on the number of shareholders, the capital percentage or board composition. A special law governing the sector may nevertheless require formation or operating permission.

The legislature also included a drafting rule intended to preserve this structure. Article 5/d provides that amendments concerning Law No. 4875 are to be made by adding a provision to, or amending, that Law. This does not mean that later special laws can never have consequences. The 2026 Qualified Service Centre amendment followed the same technique: the new regime was inserted directly into Law No. 4875 as Additional Article 1.

Who counts as a foreign investor?

Article 2/a covers two broad groups: foreign-national individuals and Turkish citizens resident abroad; and legal entities established under foreign law together with international organisations.

The status of Turkish citizens abroad is often overlooked. Article 18 of the Implementing Regulation requires proof: a Turkish citizen who documents residence abroad with a work or residence permit is treated as a foreign investor for purposes of the Law. A Turkish citizen living in Berlin under a work permit can therefore fall within Law No. 4875 when investing in an Istanbul company. A statement alone is not enough; the residence must be documented.

Article 2/b identifies three routes for foreign direct investment: forming a new company, opening a branch, or acquiring an interest in an existing company. Article 2/b-ii introduces a threshold for the last route: acquisitions outside a securities exchange, or acquisitions on an exchange that provide at least 10% of the shares or voting rights. The 10% threshold applies only to exchange acquisitions. For an off-exchange acquisition made with the qualifying assets listed in Article 2/b, the provision states no separate percentage threshold; even a smaller interest can bring the investment within scope.

Four safeguards — and one provision the Law no longer gives

Article 3 combines the core investment safeguards with rules on valuation, foreign personnel and liaison offices. Its current structure is:

The crucial line is 3/d. The application examined by the Constitutional Court also challenged Articles 3/e and part of 3/f, but the current consolidated Law carries an annulment note only for 3/d. A foreign-invested company’s real-estate position must now be read from the current Land Registry Law and related secondary legislation, not from Article 3/d of Law No. 4875. The thresholds and permission rules under that separate regime were not verified for this guide. A source that still says “free under Article 3/d” is relying on a provision that has been gone for eighteen years.

The limit on freedom: special laws

Article 3/a does not establish absolute freedom. It expressly preserves contrary rules in international agreements and special laws. Courts can apply that reservation.

In decision E.2023/59, K.2025/4666 dated 15 May 2025, the Council of State’s 8th and 10th Chambers, sitting together, annulled a provision of the Regulation on Freight Forwarders that required only incorporation under Turkish law for an authorisation certificate. The chamber decision was open to appeal before the Council of State’s Plenary Session of the Administrative Law Chambers; its final status was not verified for this guide.

The court recalled that the Cabotage Law No. 815 reserves cabotage rights to Turkish nationals and that Article 940 of the Turkish Commercial Code conditions when a vessel is regarded as Turkish. The regulation was incomplete because it did not make the corresponding distinction.

The practical rule is simple: forming a company in Turkey does not mean that the company can conduct every regulated activity. The direct subject of the judgment was the Regulation on Freight Forwarders; it does not create a universal incorporation rule for every maritime business. Where Turkish-vessel status, the right to fly the Turkish flag or an activity within the Cabotage Law is relevant, Article 940 conditions may come into play. Depending on company type, these include Turkish citizenship of a majority of persons authorised to manage, a Turkish majority of voting rights and, for joint-stock and partnerships limited by shares, further requirements concerning registered shares and board approval for transfers to foreigners.

International transport and activities for which ship ownership or cabotage status is irrelevant may fall outside those conditions. Civil aviation, broadcasting, banking and private security also have their own limitations. The particular technique—permission, founder qualification, reciprocity, ownership percentage or management requirement—was not verified against the primary text for each sector here. This list is not exhaustive; energy and mining legislation were not reviewed.

Five filings and one regime-entry procedure: the E-TUYS calendar

The cost of the notification model appears here. Article 4/3 supplies the statutory basis: foreign investors report statistical information about their investments to the administration. The same paragraph limits the use of that information: it may not be used as evidence for purposes other than statistics.

Article 5 of the Implementing Regulation contains the operational requirements. Filings are electronic and made through the Electronic Incentive Implementation and Foreign Capital Information System, known as E-TUYS, by an authorised user holding a qualified electronic certificate. The competent authority is the General Directorate of Incentive Implementation and Foreign Capital at the Ministry of Industry and Technology.

Article 5/b — five registration and notification duties

The word “takes effect” matters. Do not automatically use the notary date or the date of a general meeting. The legally effective date must be identified under the company-law rules governing the specific transaction.

Article 5/c — entering the regime after incorporation

A previously wholly domestic company can enter the Law No. 4875 regime in two ways: a foreign investor acquires an interest in it, or an outside foreign investor participates in its capital increase. Article 5/c uses the completion of the share transfer as the starting event in both cases; this guide does not invent a different date.

Within one month after the event, the authorised user must complete and save the “Investor”, “Shareholders List” and, where applicable, “Affiliates” information in E-TUYS. This is a separate regime-entry procedure triggered by the transaction, in addition to the recurring Article 5/b calendar.

For an acquisition on an exchange, Article 2/b-ii requires at least 10% of the shares or voting rights. It states no percentage threshold for an off-exchange acquisition. Article 5/c can therefore be triggered by any off-exchange participation by a foreign investor or participation in a capital increase, and by an exchange acquisition meeting the 10% share or voting threshold.

Authorisation applications are no longer submitted by physical mail. Following the amendment dated 16 October 2020, Article 10 requires the documents to be sent to the General Directorate’s registered electronic mail (KEP) address. Old guides referring to hand delivery or courier do not replace the current KEP rule.

What happens if a filing is late?

The full text of the Law and Regulation was searched. Neither contains an express administrative fine for a company or branch that files its E-TUYS notification late or not at all. Law No. 4875 is a short framework law; Additional Article 1 was added in 2026, but no express penalty for company and branch filings was added.

My view—an interpretation, not a verified finding—is that this may be consistent with Article 1’s abolition of the permission model. The same Regulation provides a useful contrast for liaison offices. Under Article 8/ç, an office that fails to submit its annual information form may have its extension request disregarded and its operating permission cancelled ex officio; Article 8/d addresses cancellation where commercial activity is detected. Companies and branches do not have an equivalent express sanction in Law No. 4875 or the Regulation.

That does not mean the filing can safely be ignored. This conclusion is deliberately narrow and confined to Law No. 4875 and its Implementing Regulation. Whether up-to-date Ministry records are required in practice in an incentive, registration, work-permit or other process was not verified. The text contains no express fine; the consequences beyond that are unknown. Timely filing is the cheapest way to manage that uncertainty.

The quiet 2026 amendment: Qualified Service Centres

Additional Article 1 was added to Law No. 4875 by Article 6 of Law No. 7582 dated 21 May 2026 and took effect on 4 June 2026. It defines a Qualified Service Centre (QSC) for tax-incentive purposes. The income-tax exemption itself is based on Article 23/1-20 of the Income Tax Code.

The definition is narrow. The company must be a capital company; it must meet the statutory wording concerning activity in at least three different countries and services to a related company or group; it must be established to conduct the activities listed in the second paragraph; and at least 80% of annual revenue must be earned from related companies or groups abroad. The subject modified by the “three countries” wording should not be stated categorically until a Ministry regulation or other primary clarification is available.

Paragraph 2/a covers direct services and their coordination or management. Legal advice concerning domestic activity or Turkish law must be obtained from a lawyer or law partnership entitled to practise under the Attorneyship Law No. 1136. Paragraph 2/b lists coordination and management relating to sales, support, R&D, external sourcing, testing and laboratory activities. The reviewed sources did not establish whether one activity group alone is sufficient.

The statutory revenue threshold is 80%, not 50%. Income Tax General Communiqué No. 334 (Official Gazette 4 July 2026-33300) confirms the payroll side. For a qualified service employee as defined in Additional Article 1, the portion of salary not exceeding three times the gross minimum wage is exempt from income tax. The ceiling is five times the gross minimum wage for QSCs located in industrial zones approved by the President and those operating in the Istanbul Finance Centre with a participant certificate.

Not every employee of a QSC qualifies. The definition covers employees who directly perform the services described in Additional Article 1 and excludes support staff. The exempt portion is also exempt from stamp tax. The President may set the three- and five-times multipliers down to one times or increase them up to twice their stated level. The corporate-tax treatment was not verified from the primary text for this guide; check the current Corporate Tax Law and Communiqué separately.

The final paragraph authorises the Ministry of Industry and Technology to determine implementation procedures. No such regulation was found in the sources reviewed; because the complete Official Gazette record was not searched, its publication status could not be verified. Check the Official Gazette and Ministry material on the transaction date. Until that layer is confirmed, qualification and application procedure may remain uncertain.

Gökay GÜL’s field note

Gökay GÜL’s note: The most common failure in a foreign-invested company does not arise on incorporation day. It appears in year two. The company is formed, E-TUYS authorisation is obtained, the first filing is entered and the file is closed. Then a share transfer or capital increase occurs—and nobody returns to E-TUYS. The duty is treated as a one-off incorporation step even though it is continuous.

The practical fix is to create a separate E-TUYS line in the compliance calendar. Create a dedicated task due on 31 May for Annex 1. For a share transfer or capital change, use the Regulation’s legal-effect date and verify the starting point for the specific transaction. The Annex 2 deadline begins directly on the payment date.

A third party, including an adviser, can be authorised. Access is nevertheless made with the authorised person’s own electronic signature. If current E-TUYS technical rules permit more than one user, avoid concentrating the authority in a single person; otherwise that person’s departure may leave the company unable to file.

Risks and common mistakes

• Relying on a repealed provision. Article 3/d has not been in force since 16 October 2008. Real-estate acquisition must be analysed under the current Land Registry Law regime.
• Trying to derive current work-permit rules solely from Law No. 4875. The first sentence of Article 3/g remains in force, while the second to fourth sentences were repealed with effect from 13 August 2016. Current conditions must be read with the International Labour Force Law and related legislation.
• Treating investment freedom as absolute. Article 3/a preserves special laws. A regulated sector may require a different ownership or management structure. The final status of the cited 2025 chamber decision was not verified.
• Missing entry into the regime after incorporation. Article 5/c applies when a foreign investor joins a domestic company or participates from outside the company in a capital increase. The 10% threshold applies to exchange acquisitions; no percentage threshold is stated for off-exchange acquisitions.
• Treating E-TUYS as an incorporation-only filing. Four Article 5/b duties have one-month deadlines; the annual filing is due at the end of May. Article 5/c is a separate entry procedure.
• Hiding Annex 1 inside another return calendar. Its deadline is 31 May. Track it as a separate task.
• Starting the share-transfer clock from the notary or meeting date without analysis. The Regulation uses the date on which the event legally takes effect. That moment varies with company and transaction type.
• Treating Article 3/e as a general, unconditional right to arbitration. It is confined to specified investment and concession disputes and requires the parties’ agreement.
• Using a 50% QSC threshold. Additional Article 1 states 80%.
• Following an obsolete guide instead of Article 10. Physical delivery does not replace the current KEP submission rule.

Frequently asked questions

Does a foreign investor need permission to form a company in Turkey? There is no prior permission or approval stage arising from Law No. 4875. Article 1 converted that model into notification. The company is formed under the Turkish Commercial Code. Any formation or operating permission imposed by sector-specific legislation remains applicable.

Is there a minimum investment or foreign-capital requirement? Law No. 4875 sets no minimum investment or capital amount specific to a foreign investor. The company must meet the minimum capital applicable to its legal form under the Turkish Commercial Code. See the limited-company and joint-stock-company comparison.

Can a company be wholly foreign-owned? In principle, yes: Article 3/a establishes national treatment. The same provision preserves contrary special laws. Broadcasting, banking, maritime transport, civil aviation and private security may use different restrictions, such as an ownership percentage, permission threshold, management-majority requirement, founder qualification or reciprocity. The precise rule for each field was not verified from its primary legislation here.

What must be reported after formation, and when? Article 5/b contains five duties: initial registration after authorisation within one month; the annual activity form by 31 May; a capital increase or reduction within one month from legal effect; payment for a capital increase or share transfer within one month from payment; and a share transfer within one month from legal effect. Article 5/c separately requires the E-TUYS investor, shareholder and affiliate fields to be completed within one month when a qualifying foreign investor enters a previously domestic company. All are handled through E-TUYS.

Is there a fine if an E-TUYS filing is late? Law No. 4875 and the Implementing Regulation contain no express administrative fine for companies and branches. Liaison offices are different: their operating permission may be cancelled under Article 8/ç. Whether another law or administrative practice creates an indirect consequence was not verified. Treat that uncertainty as a risk, not as proof that there is no consequence.

Can profits be transferred abroad freely? Article 3/c protects the transfer through banks or special finance institutions of net profits, dividends, sale, liquidation and compensation proceeds, licence and management fees, and foreign-loan payments. Free transfer does not mean tax-free transfer; withholding and other tax obligations must be assessed separately. For the banking friction in practice, see bank accounts for foreign investors in Turkey.

I am a Turkish citizen living abroad. Am I a foreign investor? You are treated as a foreign investor if you document residence abroad with a work or residence permit under Article 18 of the Implementing Regulation. That status does not automatically bring every company you already own within Law No. 4875. The E-TUYS duties arise when you make an investment described in Article 2/b: forming a company, opening a branch or acquiring a qualifying interest.

What is a Qualified Service Centre, and can my company qualify? Additional Article 1 combines several conditions for a capital company: the statutory three-country wording, services to a related company or group, establishment for the listed activities and at least 80% of annual revenue from related companies or groups abroad. The provision separates direct services and their coordination or management under paragraph 2/a from coordination and management of the paragraph 2/b activities. Whether one group alone is sufficient was not established by the reviewed sources. The Ministry’s implementation regulation was not verified, so do not make a final qualification or application assessment without checking current primary material. Compare Technopark, R&D Centre and QSC and see the QSC payroll income-tax exemption.

Action list

1. Check the sector first. If a special law applies, design the ownership and management structure before incorporation. Correcting it later may require a share transfer, management change or amendment of the articles.
2. Form the company, then report. Use the company-formation roadmap for the operational sequence.
3. Complete E-TUYS authorisation through KEP. If current technical rules allow multiple users, do not make one person the only point of access.
4. Put all five Article 5/b duties on the calendar. Create 31 May as a separate compliance task. Track each of the other starting points independently: initial registration from authorisation; Annex 2 from payment; capital change from legal effect; share transfer from legal effect.
5. When a foreign investor joins a domestic company, arrange user authorisation promptly and complete the Article 5/c investor, shareholder and affiliate fields within one month. Then run the recurring Article 5/b calendar separately.
6. If QSC status is the target, document the capital-company, statutory three-country, activity and 80% revenue conditions. Confirm which subject the three-country wording modifies from current Ministry or other primary material. Check any Ministry implementation rules again on the transaction date. Communiqué No. 334 applies the payroll exemption only to qualified service employees under Additional Article 1.

Sources

• Foreign Direct Investment Law No. 4875 dated 5 June 2003 — Official Gazette 17 June 2003-25141
• Implementing Regulation on the Foreign Direct Investment Law — Official Gazette 20 August 2003-25205 (last amendment cited: Official Gazette 27 March 2021-31436)
• Law No. 4875 Additional Article 1 — added by Law No. 7582, Art. 6; effective 4 June 2026
• Income Tax General Communiqué No. 334 — Official Gazette 4 July 2026-33300
• Constitutional Court E.2003/71, K.2008/79 dated 11 March 2008 — Official Gazette 16 April 2008-26849
• Council of State 8th Chamber E.2023/59, K.2025/4666 dated 15 May 2025 — chamber decision; final status not verified
• Repealed sentences of Law No. 4875 Art. 3/g — repealed by Law No. 6735, Art. 27; effective 13 August 2016