Company Formation and Business Law for Arab Investors in Turkey 

Türkiye is an important business destination for Arab investors who want to establish companies, enter the Turkish market, trade internationally, invest in real estate, or develop commercial partnerships.

Istanbul is particularly attractive to investors from Arab countries because of its location between Europe, Asia, and the Middle East. However, establishing and operating a company in Türkiye requires careful attention to corporate law, shareholder rights, contracts, taxation, employment, banking, and regulatory requirements.

For Arab entrepreneurs arriving through Istanbul Airport, obtaining appropriate legal advice before establishing a business can help them understand the legal structure and obligations involved.

Can Arab Citizens Establish a Company in Türkiye?

Arab citizens can establish companies in Türkiye subject to the applicable Turkish legislation.

Foreign investors may establish businesses in sectors where foreign investment is permitted.

Depending on the business model, an investor may consider structures such as:

• Limited liability company.
• Joint-stock company.
• Branch office.
• Liaison office.
• Other permitted structures.

The appropriate structure depends on the nature and objectives of the business.

What Is a Limited Liability Company?

A limited liability company is commonly used for small and medium-sized businesses.

It can be suitable for investors who want to:

• Conduct commercial activities.
• Import and export goods.
• Provide services.
• Employ staff.
• Enter into contracts.
• Develop a Turkish business operation.

The company's capital, management structure, shareholders, and activities should be established in accordance with applicable law.

What Is a Joint-Stock Company?

A joint-stock company can be appropriate for larger businesses or investors who require a more developed corporate structure.

It may be useful for:

• Larger investments.
• Multiple shareholders.
• Corporate expansion.
• Investment structures.
• Certain regulated activities.

The appropriate structure should be determined based on the company's business plan.

Can an Arab Citizen Own 100% of a Turkish Company?

Depending on the sector and applicable restrictions, foreign investors may be able to own all shares of a Turkish company.

However, certain sectors can be subject to special rules or restrictions.

Before establishing a company, the investor should verify whether the intended business activity has any nationality, licensing, or regulatory requirements.

Can Several Arab Investors Establish a Company Together?

Yes, several foreign investors may establish a Turkish company together where permitted by law.

The shareholders should carefully define:

• Ownership percentages.
• Capital contributions.
• Management rights.
• Voting rights.
• Profit distribution.
• Transfer of shares.
• Exit arrangements.
• Dispute resolution.

A well-prepared shareholders' agreement can be useful in appropriate circumstances.

What Documents Are Needed to Establish a Company?

Depending on the company structure and business activity, documents may include:

• Passports.
• Shareholder information.
• Company articles of association.
• Registered address.
• Capital information.
• Signature documents.
• Power of attorney.
• Other corporate documents.

Foreign documents may require translation, notarization, apostille, or legalization.

Can an Arab Investor Establish a Company Remotely?

In some circumstances, an investor living outside Türkiye may authorize a representative or lawyer to handle certain company formation procedures.

A properly prepared power of attorney can be useful for investors who cannot travel to Türkiye.

The exact scope of representation should be clearly defined.

Can an Arab Investor Become a Company Manager?

Depending on the company structure and applicable rules, a foreign investor may hold a management position in a Turkish company.

However, corporate authority and the right to work in Türkiye are separate legal matters.

If the investor intends to actively work in Türkiye, applicable work-permit requirements should also be reviewed.

Does Establishing a Company Automatically Give Residence Rights?

Company ownership does not automatically guarantee a residence permit.

Residence and work authorization are separate immigration matters.

An Arab investor who establishes a Turkish company should separately determine which residence or work authorization may be applicable to their circumstances.

What If the Investor Wants to Employ Arab Citizens?

A Turkish company may employ foreign nationals subject to applicable work-permit and employment requirements.

The employer may need to comply with rules concerning:

• Work permits.
• Employment contracts.
• Social security.
• Salary.
• Workplace regulations.
• Occupational health and safety.

The nationality of the employee may also be relevant to certain procedures.

What If the Company Employs Turkish Citizens?

A company owned by Arab investors must comply with Turkish employment legislation when hiring Turkish employees.

The company may have obligations concerning:

• Employment contracts.
• Social security.
• Salaries.
• Working hours.
• Annual leave.
• Termination.
• Workplace safety.

Professional legal advice can help establish appropriate employment procedures.

What If the Company Imports Goods Into Türkiye?

An Arab-owned Turkish company may engage in import activities.

Import transactions can involve:

• Customs.
• Commercial contracts.
• Product regulations.
• Taxes and duties.
• Documentation.
• Transportation.
• Insurance.

The legal and regulatory requirements depend on the goods and the transaction structure.

What If the Company Exports From Türkiye?

Türkiye is also an important base for companies exporting goods to Arab countries and other international markets.

Export transactions may require careful preparation of:

• International sales contracts.
• Payment terms.
• Delivery terms.
• Customs documents.
• Insurance.
• Dispute-resolution provisions.

International commercial contracts should be reviewed before signing.

Can Arab Investors Purchase Commercial Property Through a Company?

Depending on applicable rules, a Turkish company may acquire commercial real estate.

Investors should nevertheless review:

• Title records.
• Property restrictions.
• Zoning.
• Existing mortgages.
• Existing tenants.
• Tax obligations.

Real estate due diligence remains important even when the buyer is a company.

What If the Company Has Several Shareholders?

A company with multiple shareholders should establish clear rules concerning management and decision-making.

Potential disputes can concern:

• Share transfers.
• Dividends.
• Management.
• Capital increases.
• New investments.
• Company expenses.
• Related-party transactions.

A properly drafted shareholders' agreement can help define the parties' rights and obligations.

What If an Arab Shareholder Wants to Sell Their Shares?

A shareholder may wish to exit the company by selling their shares.

Before a share transfer, the parties should examine:

• Articles of association.
• Shareholder agreements.
• Transfer restrictions.
• Valuation.
• Payment arrangements.
• Corporate approvals.
• Registration requirements.

The appropriate procedure depends on the company structure.

What If Business Partners Have a Dispute?

Commercial disputes can arise between:

• Shareholders.
• Directors.
• Business partners.
• Suppliers.
• Customers.
• Distributors.
• Contractors.

The first step is usually to examine the relevant contracts and corporate documents.

Depending on the circumstances, negotiation, mediation, arbitration, or court proceedings may be considered.

What If a Turkish Company Owes Money to an Arab Investor?

An Arab investor may provide financing to a Turkish company or have an outstanding commercial receivable.

The parties should document:

• Loan terms.
• Payment schedule.
• Interest, where applicable.
• Security.
• Repayment conditions.
• Default provisions.

A clear written agreement can help reduce future disputes.

What If a Turkish Company Owes Money to an Arab Company?

International commercial relationships can create cross-border payment disputes.

An Arab company may need to recover a debt from a Turkish company.

The legal strategy may depend on:

• Contract.
• Governing law.
• Jurisdiction.
• Arbitration clause.
• Payment records.
• Invoices.
• Delivery documents.

The relevant documents should be reviewed before initiating proceedings.

What If the Company Has a Bank Account in Türkiye?

A Turkish company generally needs appropriate banking arrangements for its commercial activities.

Arab investors may encounter questions concerning:

• Company documentation.
• Authorized signatories.
• Beneficial ownership.
• Banking compliance.
• International transfers.

The bank may request corporate and identification documents from shareholders and managers.

Can Arab Investors Transfer Money From Türkiye Abroad?

International transfers can involve banking, corporate, tax, and compliance considerations.

The company should maintain appropriate documentation concerning:

• Source of funds.
• Purpose of payment.
• Commercial agreement.
• Invoice.
• Banking records.

Large international transactions should be structured carefully.

What If an Arab Investor Has an Entry Ban?

An Arab shareholder or company manager may have an entry ban or Tahdit code preventing entry into Türkiye.

This can create practical difficulties if the investor needs to:

• Attend meetings.
• Manage the company.
• Sign documents.
• Meet business partners.
• Inspect company operations.

The immigration issue should be addressed separately from the corporate matter.

What If the Investor Is Refused Entry at Istanbul Airport?

An Arab investor may arrive at Istanbul Airport and discover that they cannot enter Türkiye.

If the investor owns a Turkish company, the situation can create immediate business difficulties.

The investor should determine:

• Reason for refusal.
• Whether an entry ban exists.
• Whether a Tahdit code is involved.
• Whether there is a legal remedy.
• Whether the company can continue operating through authorized representatives.

Can a Lawyer Manage Corporate Matters for an Investor?

Depending on the circumstances, an Arab investor can grant a power of attorney to a Turkish lawyer.

Legal representation may assist with:

• Company formation.
• Corporate registrations.
• Share transfers.
• Contracts.
• Commercial disputes.
• Real estate transactions.
• Debt recovery.
• Immigration-related procedures.

The power of attorney should clearly define the authority granted.

What If the Company Is Subject to a Lawsuit?

A Turkish company may become involved in:

• Commercial litigation.
• Employment disputes.
• Debt claims.
• Contract disputes.
• Real estate disputes.
• Administrative proceedings.

Company managers should respond to legal notices and court documents within the applicable deadlines.

What If an Arab Investor Wants to Close the Company?

If the business is no longer operating, shareholders may consider liquidation or another legally appropriate procedure.

Before closing the company, issues concerning:

• Debts.
• Employees.
• Taxes.
• Contracts.
• Bank accounts.
• Assets.
• Creditors.

should be addressed.

What If the Company Has Debts?

Company debts should be reviewed before liquidation, restructuring, sale, or transfer of shares.

The legal consequences depend on:

• Company structure.
• Nature of the debt.
• Guarantees.
• Shareholder position.
• Management role.
• Applicable law.

Personal liability and corporate liability should not automatically be treated as the same.

Can an Arab Investor Obtain Turkish Citizenship Through Business Investment?

Certain investment routes may potentially provide eligibility for Turkish citizenship if all applicable statutory requirements are satisfied.

However, merely establishing a company does not automatically grant citizenship.

The investor should separately examine the current requirements and whether the proposed investment qualifies.

What Documents Should Arab Business Owners Keep?

Arab investors should maintain copies of:

• Articles of association.
• Shareholder records.
• Trade registry documents.
• Contracts.
• Invoices.
• Bank records.
• Tax documents.
• Employment records.
• Property documents.
• Powers of attorney.

Complete corporate records can be important when dealing with disputes or regulatory procedures.

Cosmos Legal Law Firm Services for Arab Investors

Cosmos Legal Law Firm provides legal assistance to Arab investors and companies establishing or operating businesses in Türkiye.

Depending on the circumstances, the firm's services may include:

• Company formation.
• Corporate structuring.
• Articles of association.
• Shareholder agreements.
• Share transfers.
• Corporate governance.
• Commercial contracts.
• International trade contracts.
• Debt recovery.
• Commercial disputes.
• Employment matters.
• Work permits.
• Real estate transactions.
• Investment-related procedures.
• Power of attorney arrangements.
• Entry bans and Tahdit code matters.
• Representation before Turkish authorities and courts.

The firm can assist Arab investors from the initial company formation stage through the operation, restructuring, expansion, or termination of the business.

Why Is Legal Advice Important for Arab Investors?

Establishing a company is only the beginning of a business relationship with Türkiye.

An investor may subsequently encounter issues involving:

• Corporate governance.
• Employment.
• Taxation.
• Contracts.
• Real estate.
• Banking.
• Immigration.
• International trade.
• Litigation.

A coordinated legal approach can help the investor understand the obligations associated with each stage of the business.

Conclusion

Arab investors can establish and operate businesses in Türkiye subject to applicable Turkish corporate, commercial, employment, immigration, and regulatory requirements.

Before establishing a company, investors should carefully consider the appropriate corporate structure, shareholder rights, management arrangements, contracts, financing, and regulatory obligations.

For Arab entrepreneurs traveling through Istanbul Airport, immigration issues such as entry bans, Tahdit codes, or previous deportation decisions may also affect their ability to personally manage a Turkish company.

Cosmos Legal Law Firm assists Arab investors with company formation, corporate structuring, shareholder agreements, commercial contracts, business disputes, debt recovery, employment matters, real estate transactions, and related immigration procedures in Türkiye.

Each investment and corporate structure should be reviewed individually according to the investor's objectives, nationality, business activity, company structure, and applicable Turkish law.