The main legislative document that regulates the incorporation and activity of companies in Turkey is the new Commercial Code which entered into force in July 2012 and replaced the old Code from 1956.
The new law introduced important changes related to the board of directors’ structure in order to ensure good conditions for the development of the businesses. The changes aimed to modernize the Turkish legislation and align it with the European Union legislation and the international standards. These changes have been beneficial and their main goal was to encourage foreign entrepreneurs to invest in Turkey
The Commercial Code of 2012 emphasizes the concept of corporate governance. A greater degree of importance is placed now on the rules and regulations that govern both non-listed and listed companies in Turkey.
Rules and regulations for companies in Turkey
The Commercial Code introduces provisions regarding good management practices and requirements for internal and independent audit. A company must base its economic and business activities on transparency, fairness, accountability and responsibility. The Code contains guidelines regarding:
- mandatory financial statements;
- the organizational structure of the company;
- the annual audit process;
- the company’s shareholders;
- structural changes within the company;
- company division/split-up;
- the liquidation of the company.
These provisions, together with the Articles of Incorporation belonging to a company incorporated in Turkey
are the basis for corporate governance in the country.
The main provisions of the Turkish Commercial Code
The Turkish Commercial Code lists and defines the types of companies which can be incorporated in Turkey:
- the joint stock company;
- commandite company;
- collective company;
- cooperative company.
The Code also makes clarifications regarding the sole trader: the one-man company that supplies goods and services. Also regulated by the Code are groups of companies (“Group”). Our company registration experts in Turkey can give you detailed information about each type of company, the legal requirements it must fulfill as well as the taxation regulations.
The changes made to the old Commercial Code are necessary for modernization and Turkey has become well-known as a free market economy, in which the industry plays an important part. Due to the attractive economic conditions, the number of companies opened in Turkey has constantly increased in the last 30 years.
If you need more information about the new Commercial Code in Turkey and other major regulations regarding the economic activity of the companies, you may contact our agents in company formation.
They can also answer you the questions related to company formation in other European countries, such as: Spain, Sweden or Ukraine.