Turkey is a civil law country which enables its citizens to take advantage of various setups for the purpose of protecting their assets. One of the most popular ways of planning one’s estate is to create a trust. However, Turkey does not provide for the establishment of such entities. The closest structure to the trust in Turkey is the private foundation.
Our company formation consultants in Turkey can assist foreign investors who want to open companies in this country. They can also offer information on the concept of trusts in Turkey.
Turkey does not acknowledge trusts or has any legislation which provides for their establishment. The private foundation is similar to the trust in Turkey because it can be set up for the same purpose and will basically have the same structure in terms of participants. Just like the trust, a private foundation can be opened in Turkey for the following purposes:
The establishment of a trust will be carried you by preparing a set of documents which must be signed by the settlor and the trustee. The documents, which can be a deed of trust or a will, must be notarized by a public notary.
The trust must have a settlor who can be an individual or a company. Turkish companies can also set up trusts outside the country. Then, the settlor must appoint a trustee who can be an individual or a company and who will manage the assets conveyed through the deed of trust. The beneficiary or beneficiaries are those in favor of which the trust was created. The beneficiaries can be foreign or Turkish citizens.
Considering trusts are not recognized as legal entities in Turkey, the taxation system applicable will not have any negative impact on the settlor or beneficiaries of a trust. Considering trusts are used for estate planning reasons in most jurisdictions, the Turkish Tax Code provides for the levy of a tax on real estate transfer and of the value added tax.
For full information on the Turkish taxation system, please feel free to contact us. You can also rely on our company registration advisors if you want to open a company in Turkey.