Company Formation and Business Setup for Arab Citizens in Turkey

Türkiye is an important commercial and investment destination for many Arab citizens and companies. Istanbul, in particular, attracts entrepreneurs from the Gulf countries, the Middle East, and North Africa who want to establish companies, invest in existing businesses, trade with Turkish companies, or expand their international operations.

Many Arab entrepreneurs first arrive in Türkiye through Istanbul Airport and then begin the process of establishing a business.

Although company formation in Türkiye can be relatively straightforward when the necessary requirements are satisfied, foreign entrepreneurs should carefully consider corporate structure, shareholder rights, tax obligations, contracts, employment, and immigration matters.

Can Arab Citizens Establish a Company in Türkiye?

Foreign nationals can establish companies in Türkiye subject to the applicable legal requirements.

An Arab entrepreneur may establish or participate in a Turkish company for activities such as:

• International trade.
• Import and export.
• Real estate.
• Tourism.
• Construction.
• Technology.
• Healthcare.
• Manufacturing.
• Consulting.
• E-commerce.
• Other permitted commercial activities.

The appropriate company structure depends on the planned business activities and the investor's objectives.

What Types of Companies Can Foreigners Establish?

Depending on the circumstances, foreign investors may establish different types of companies under Turkish commercial law.

Common structures include:

• Limited liability companies.
• Joint-stock companies.
• Branches of foreign companies.
• Liaison offices, where applicable.

The appropriate structure depends on factors such as:

• Number of shareholders.
• Capital requirements.
• Planned activities.
• Management structure.
• Investment strategy.
• Future expansion plans.

What Documents Are Needed to Establish a Company?

The exact documentation depends on the type of company and the shareholders.

Documents may include:

• Passport copies.
• Articles of association.
• Shareholder information.
• Registered address.
• Capital information.
• Power of attorney, where applicable.
• Corporate documents of foreign shareholders.
• Official translations.
• Apostilled or legalized documents where required.

Foreign corporate documents may need to satisfy Turkish formalities before they can be used for company registration.

Does an Arab Citizen Need to Be in Türkiye to Establish a Company?

Physical presence requirements depend on the specific procedure.

In some circumstances, an Arab investor may authorize a lawyer or another representative through a properly prepared power of attorney.

This can be useful for investors who live in Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Bahrain, Oman, or other countries and want to establish a Turkish company without making repeated trips to Türkiye.

The scope of the power of attorney should be carefully defined.

What Is the Minimum Capital Requirement?

The required capital depends on the type of company and the applicable legislation in force at the time of establishment.

Because capital requirements can change, Arab investors should verify the current requirements before establishing the company.

The capital structure should also be considered in light of the company's planned activities and financial needs.

Can an Arab Citizen Be the Sole Shareholder?

Depending on the chosen company structure, a foreign national may establish a company with a single shareholder.

The precise requirements depend on the type of company and applicable Turkish corporate law.

The shareholder structure should be planned carefully, particularly if additional investors may join the business later.

Can Several Arab Investors Establish a Company Together?

Yes, Arab investors can establish a company together, subject to applicable legal requirements.

When several investors are involved, it is particularly important to clarify:

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

A shareholder agreement can be useful for defining the relationship between the investors.

What Is a Shareholder Agreement?

A shareholder agreement is a contractual arrangement between shareholders that can regulate matters beyond the basic company registration documents.

It may address:

• Management.
• Voting.
• Investment obligations.
• Transfer of shares.
• Confidentiality.
• Non-compete provisions where legally applicable.
• Profit distribution.
• Deadlock situations.
• Exit mechanisms.
• Dispute resolution.

For Arab investors establishing a company with business partners, carefully drafted shareholder arrangements can help reduce future disagreements.

Can an Arab Citizen Buy Shares in an Existing Turkish Company?

Foreign investors may acquire shares in existing Turkish companies subject to applicable legal and regulatory requirements.

Before purchasing shares, the investor should consider conducting legal and financial due diligence.

This may include reviewing:

• Company ownership.
• Existing debts.
• Litigation.
• Tax obligations.
• Contracts.
• Employees.
• Licenses.
• Assets.
• Existing shareholders.
• Restrictions on share transfers.

What If the Arab Investor Is Promised a Certain Profit?

Investment opportunities may sometimes be presented with promises concerning future profits or returns.

An investor should carefully review the contractual basis of such promises.

Important questions may include:

• Who guarantees the return?
• Is the promise written into a contract?
• What are the conditions?
• What happens if the business does not achieve the expected results?
• Is the arrangement legally permissible?

Verbal promises should not replace properly documented contractual arrangements.

Can a Company Be Used for Real Estate Investment?

An Arab investor may establish or acquire a Turkish company for commercial or investment purposes.

However, company ownership and property ownership involve different legal considerations.

If the company will purchase real estate, the transaction should be reviewed separately, including:

• Title deed.
• Ownership.
• Restrictions.
• Zoning.
• Purchase agreement.
• Financing.
• Tax consequences.

Can a Company Owner Obtain a Residence Permit?

Company ownership and residence rights are separate legal matters.

An Arab citizen who establishes a Turkish company should not automatically assume that company ownership by itself guarantees a residence permit.

The person's immigration status must be assessed according to the applicable residence and immigration rules.

Does Company Ownership Automatically Give a Work Permit?

No.

Being a shareholder or company owner does not automatically answer whether the individual is authorized to work in Türkiye.

If the Arab investor intends to actively work in or manage the company in Türkiye, the applicable work-permit requirements should be separately reviewed.

What If the Company Employs Other Foreign Nationals?

A Turkish company owned by Arab investors may employ foreign nationals.

The company should comply with the applicable rules concerning:

• Work permits.
• Employment contracts.
• Social security.
• Salary payments.
• Workplace obligations.
• Immigration procedures.

Employing a foreign national without the required authorization can create legal consequences.

What If the Company Has a Turkish Business Partner?

Many Arab investors establish companies together with Turkish partners.

This can be commercially beneficial, but the legal relationship between the parties should be clearly documented.

Important issues may include:

• Shareholding.
• Management.
• Capital contributions.
• Profit distribution.
• Authority to sign contracts.
• Bank accounts.
• Intellectual property.
• Exit rights.

A well-structured agreement can help clarify each partner's rights and responsibilities.

What If the Business Partner Takes Company Money?

A dispute may arise if an investor believes that another shareholder or manager has improperly used company funds.

The investor may need to examine:

• Bank records.
• Accounting records.
• Company decisions.
• Contracts.
• Invoices.
• Corporate records.

Depending on the facts, civil, commercial, or other legal procedures may be considered.

What If the Company Cannot Pay Its Debts?

A company may encounter financial difficulties for many reasons.

If the company cannot pay its debts, issues may arise concerning:

• Creditors.
• Employees.
• Suppliers.
• Banks.
• Taxes.
• Corporate obligations.

The legal consequences depend on the company's structure and financial circumstances.

What If the Arab Investor Wants to Close the Company?

Closing a company is not simply a matter of stopping business activity.

Depending on the circumstances, the company may need to complete procedures concerning:

• Shareholders.
• Creditors.
• Employees.
• Taxes.
• Contracts.
• Assets.
• Liabilities.
• Commercial registration.

A proper liquidation process may be required.

What If the Investor Wants to Sell the Company?

An Arab investor may eventually decide to transfer their shares or sell the business.

Before completing the transaction, it can be important to review:

• Share-transfer restrictions.
• Existing shareholder agreements.
• Company liabilities.
• Tax consequences.
• Buyer due diligence.
• Regulatory requirements.
• Sale agreement.

Professional legal assistance can help structure the transaction.

What If the Arab Investor Lives Outside Türkiye?

Many Arab business owners manage Turkish investments while living abroad.

Depending on the circumstances, certain corporate procedures can be handled through:

• Power of attorney.
• Authorized representatives.
• Lawyers.
• Company managers.

This can reduce the need for repeated travel to Türkiye.

What If the Investor Has an Entry Ban or Tahdit Code?

An Arab entrepreneur may own a Turkish company while also having an immigration restriction.

For example, the investor may have:

• Entry ban.
• Tahdit code.
• Previous deportation.
• Visa issue.

The immigration restriction should be reviewed separately from the investor's corporate rights.

Depending on the transaction, a properly authorized representative may be able to handle certain corporate matters while the immigration issue is being addressed.

What If the Entrepreneur Is Refused Entry at Istanbul Airport?

An Arab businessperson may arrive at Istanbul Airport for a company meeting, investment transaction, or business activity and discover that they are not permitted to enter Türkiye.

The reasons may include:

• Entry ban.
• Tahdit code.
• Previous deportation.
• Visa problem.
• Other immigration restrictions.

If this occurs, the immigration issue should be addressed promptly, particularly if the individual has important corporate obligations in Türkiye.

What Tax Issues Should Arab Investors Consider?

Establishing a company can create tax obligations.

Depending on the company's activities, these may involve:

• Corporate tax.
• VAT.
• Withholding obligations.
• Payroll-related taxes.
• Social security obligations.
• Other applicable taxes.

Tax treatment can depend on the company structure, activities, transactions, and international circumstances.

A legal and tax review before beginning operations can help clarify the obligations.

What About Accounting and Corporate Compliance?

Turkish companies generally have ongoing accounting and corporate obligations.

These may include:

• Maintaining corporate records.
• Accounting.
• Tax filings.
• Employee records.
• Annual obligations.
• Commercial registry requirements.

A foreign investor should ensure that appropriate professional support is in place after incorporation.

Cosmos Legal Law Firm Services for Arab Entrepreneurs

Cosmos Legal Law Firm provides legal assistance to Arab citizens, investors, entrepreneurs, 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 due diligence.
• Commercial contracts.
• Corporate disputes.
• Company liquidation.
• Investment transactions.
• Real estate investments.
• Work-permit matters.
• Residence permit matters.
• Entry bans and Tahdit codes.
• Deportation-related matters.
• Legal representation through power of attorney.

The firm can assist Arab investors throughout different stages of establishing and operating a Turkish business.

Why Should Arab Entrepreneurs Obtain Legal Advice Before Establishing a Company?

The company structure chosen at the beginning can affect future business operations.

Before incorporation, an Arab investor should consider:

• The type of company.
• Shareholding structure.
• Management.
• Capital.
• Business activities.
• Tax obligations.
• Employment requirements.
• Foreign investment considerations.
• Exit strategy.
• Dispute resolution.

Addressing these issues at the beginning can help reduce legal uncertainty later.

What Documents Should Arab Investors Prepare?

Depending on the company and shareholders, investors may need:

• Passport.
• Proof of address.
• Foreign company documents.
• Power of attorney.
• Articles of association.
• Shareholder information.
• Capital information.
• Corporate resolutions.
• Other documents required for registration.

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

Conclusion

Arab citizens can establish and operate businesses in Türkiye subject to the applicable legal requirements. However, company formation is only the beginning of the legal process.

Corporate structure, shareholder rights, commercial contracts, tax obligations, employment, real estate, and immigration matters may all become relevant during the life of the business.

For Arab entrepreneurs who enter Türkiye through Istanbul Airport, previous immigration issues such as entry bans, Tahdit codes, or deportation decisions may also affect their ability to travel to Türkiye and personally manage their businesses.

Cosmos Legal Law Firm assists Arab entrepreneurs and investors with company formation, corporate structuring, shareholder agreements, commercial contracts, company disputes, investment transactions, real estate, work permits, residence permits, and immigration-related matters.

Each business should be structured according to the investor's objectives, planned activities, shareholder relationships, and applicable Turkish law.