Software/Design Export Service Exemption
CIT Art. 10/1-ğ
80% of foreign-source software, design, engineering, architecture, call center service earnings deducted from corporate tax.
Limited Company (Ltd. Şti.) Formation
SME standard — limited liability, flexible partnership, min. TRY 50,000 capital, 2-3 days setup.
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Key facts
- Setup time
- 2-3 business days
- Min. capital
- 50,000 TRY (at least 1/4 at incorporation)
- Est. cost
- ~22,000 TRY
- Liability
- Limited (to capital share)
- Tax base
- Corporate Tax (25%)
- Shareholders
- 1-50
Overview
Limited Company (Ltd. Şti.) is the most common structure for SMEs in Turkey. Flexible 1-50 partners; each partner's liability is limited to their share of capital. Setup time 2-3 business days; minimum capital 50,000 TRY (at least 1/4 paid at incorporation).
First choice for e-commerce, trade, software, consulting, manufacturing. Right structure for growth-oriented businesses not planning a funding round. Under CIT Art. 10/1-ğ, 80% of foreign-source software/design earnings are deducted from corporate tax — critical advantage for exporter software Ltd. companies.
Ltd.'s key limitation: share certificates CANNOT BE ISSUED — in a funding round, share transfer is notary-bound and registry-linked, causing delays. If a funding plan exists, choose A.Ş. at incorporation, or convert to A.Ş. before the round opens.
Suitable for
- SME founders (growth-oriented)
- E-commerce operators
- Software/SaaS companies (especially exporters)
- Manufacturing, trade, import-export firms
- Family businesses
NOT suitable for
- Startups planning funding rounds (especially VC) — A.Ş. required
- IPO-bound companies — A.Ş. required
- Growth companies planning ESOP
- Large participation structures (50+ partners)
Advantages
- Limited liability (to capital share)
- Flexible partnership (1-50 partners)
- Prestigious corporate image
- CIT Art. 10/1-ğ — 80% deduction on software/design export earnings
- Eligible for technopark and R&D incentives
- Eligible for KOSGEB support
- Easier access to financing (bank loans, government support)
Watch out
- Share certificates cannot be issued — not ideal for funding rounds
- Share transfer requires notary (registry-bound, delay-prone)
- Min. 50,000 TRY capital commitment
- No IPO path
- Stamp duty and fees higher than sole proprietorship
- CIT 25% + 15% dividend withholding (effective tax load)
Process
- 01
Structure decision
Partner count, capital, activity code, name (1-2 days).
- 02
Articles of association
Draft AoA + shareholders' agreement (on request).
- 03
MERSİS
Online MERSİS application, name check, capital commitment.
- 04
Trade Registry
Trade Registry filing and gazette publication (1 day).
- 05
Tax Office
Tax number + certificate, e-signature, e-invoice activation.
- 06
Bank
Corporate bank account opening + capital deposit.
Deliverables
- Articles of Association (notarised, Trade Registry filed)
- Trade Registry Gazette publication
- Tax number + tax certificate
- Signature circular
- E-signature + e-invoice activation
- Bank account opening support
- 30-day operational checklist
Required documents
- Partner ID copies
- Residence documents
- Signature declaration
- Address information
- Activity code (NACE) selection
- Capital amount and partner shares
Cost
~22,000 TRY (state fees + notary + trade registry + gazette; CPA monthly fee separate)
Timeline
2-3 business days (with all documents in hand)
Tax benefits and exemptions
Technopark Earnings Exemption (if applicable)
Law No. 4691 Art. 8
Ltd. companies accepted into a technopark receive full CIT/PIT exemption on R&D/design earnings.
KOSGEB Supports
KOSGEB Regulation
For SME-status Ltd. companies — machinery-equipment grants, training/consulting support, rental support.
Legal references
- Turkish Commercial Code (TCC) No. 6102
- Corporate Income Tax Act (CIT) No. 5520
- CIT Art. 10/1-ğ — 80% export services deduction
- Tax Procedure Law
Frequently asked
Limited or Joint-Stock — which?
If funding planned, A.Ş. is dominant. If no funding but growth intended, Ltd. is sufficient. Three dimensions: (1) funding-round likelihood, (2) share certificate / ESOP need, (3) capital strength (A.Ş. min. 250K TRY).
How to convert Ltd. to A.Ş.?
Type change — extraordinary AGM + balance sheet + auditor report + Trade Registry filing under TCC Art. 180-194. Process 4-8 weeks, cost ~50,000 TRY.
Can a Ltd. be formed with a foreign partner?
Yes — with a foreign individual or foreign legal entity partner. Apostilled POA required; tax number process may add 1-2 weeks.