Limited Liability Company in Turkey: The Complete Guide

What is a Limited Liability Company?

A Limited Şirketi (Ltd. Şti.) — commonly translated as a Limited Liability Company — is a corporate entity regulated under the Turkish Commercial Code (Türk Ticaret Kanunu, Law No. 6102, Articles 573–644). It is the dominant form of business organization in Turkey, accounting for the large majority of all registered companies in the country.

The Ltd. Şti. was designed to provide a flexible, low-barrier structure for small and medium-sized businesses. It offers limited liability protection to its shareholders (meaning personal assets are shielded from company debts), while keeping governance requirements simple and capital requirements low.

For foreign investors, the Ltd. Şti. is expressly available without restriction. Under Law No. 4875 (Doğrudan Yabancı Yatırımlar Kanunu, DYYK) Article 3/a, foreign nationals enjoy the same rights as Turkish citizens to establish and participate in companies in Turkey — the milli muamele (national treatment) principle means no additional hurdles apply solely on the basis of foreign nationality.

Core characteristics at a glance

Characteristic	Detail
Turkish name	Limited Şirketi (Ltd. Şti.)
Minimum share capital	₺50,000 — fully paid at formation (TTK Art. 580)
Minimum shareholders	1 natural person or legal entity (TTK Art. 574)
Maximum shareholders	50 (TTK Art. 574)
Shareholder liability	Limited to subscribed capital contribution (TTK Art. 573)
Management	1 or more managers (müdür); may be a shareholder or external (TTK Art. 623)
Share transferability	Restricted — notarized transfer deed + shareholder consent (TTK Art. 595)
Public offering	Not permitted (TTK Art. 573/2)
Foreign ownership	100% foreign ownership — equal treatment guaranteed (DYYK Art. 3/a)
Governing law	Turkish Commercial Code (TTK) No. 6102, Arts. 573–644

Share capital and contributions

The minimum share capital for a Ltd. Şti. is ₺50,000, which must be fully subscribed at the time of formation (TTK Art. 580). Unlike the Joint Stock Company (A.Ş.), there is no option to defer part of the capital — the entire ₺50,000 must be committed in the Articles of Association.

Each share must have a nominal value of at least ₺25 (TTK Art. 583). Shares can be of equal or unequal value, and the Articles can establish different share classes with different rights — though this is more common in A.Ş. structures.

Capital contributions can be made in cash (deposited into a designated bank account before Trade Registry registration) or in kind (non-cash assets, which must be independently valued). The bank letter confirming capital deposit is a required document for Trade Registry filing.

Shareholders

A Ltd. Şti. may have between 1 and 50 shareholders. Shareholders can be individuals or legal entities (including foreign companies). Turkish residency or citizenship is not required — a Ltd. Şti. can be 100% foreign-owned.

Shareholder rights include participation in profit distributions, voting at general assembly meetings (proportional to share ownership), and inspection rights over company records. Major decisions — such as amending the Articles, increasing or reducing capital, or dissolving the company — require a qualified majority vote at a general assembly.

Unlike a Joint Stock Company, shares in a Ltd. Şti. are not freely transferable. Any transfer of shares requires a notarized share transfer agreement and is subject to approval by the other shareholders, unless the Articles of Association provide otherwise.

Management structure

The Ltd. Şti. is managed by one or more managers (müdür), who may be shareholders or third parties. At least one manager must be a natural person (not a legal entity). If there are multiple managers, a manager-in-chief (müdürler kurulu başkanı) must be designated in the Articles.

Managers represent the company externally and are responsible for its day-to-day operations. They can be appointed for a fixed or indefinite term. Unlike the A.Ş., a Ltd. Şti. does not require a separate supervisory board unless its balance sheet exceeds certain thresholds that trigger mandatory audit requirements.

Liability

The fundamental advantage of the Ltd. Şti. is limited liability: shareholders are only liable for company debts up to the amount of their capital contributions. Personal assets are protected.

However, there is an important exception under Turkish tax law: shareholders of a Ltd. Şti. can be held jointly and severally liable for unpaid public debts (tax liabilities, social security premiums) proportional to their shareholding. This liability does not apply to private creditors, only to public receivables. Shareholders of an A.Ş., by contrast, are generally exempt from even this form of secondary liability.

Formation process overview

Forming a Ltd. Şti. involves several coordinated steps, all of which SetupTurkiye manages on behalf of clients. Under TTK Art. 575, a Ltd. Şti. is formed by filing the Articles of Association with the Trade Registry; notarization is required for foreign investors and in most practical cases. Since 2013, all registrations flow through the MERSİS system (Merkezi Sicil Kayıt Sistemi), Turkey's centralized online company registration platform.

1. Company name reservation — checked against the Trade Registry database for uniqueness and compliance with naming rules under TTK.
2. Articles of Association drafting — the foundational document outlining the company's purpose, capital, shareholders, and management structure (TTK Art. 576 mandatory clauses). Notarized and bilingual.
3. Capital deposit — the minimum ₺50,000 (or agreed capital) is deposited into a temporary bank account. The bank issues a confirmation letter required by the Trade Registry.
4. Trade Registry filing via MERSİS — all documents are submitted through Turkey's central registry system to the local Ticaret Sicil Müdürlüğü. For foreign natural persons, a Turkish tax number must be obtained prior to MERSİS entry. Registration typically takes 1 business day after submission.
5. Tax registration — automatic trigger following Trade Registry registration. The company receives its Tax Identification Number (Vergi Kimlik Numarası).
6. SGK and Chamber registration — Social Security Institution and Chamber of Commerce registrations complete the formation process.

The entire process, from signed documents to a fully operational entity, can be completed in 2–5 business days when documents are in order.

Ongoing obligations

Once incorporated, a Ltd. Şti. has the following recurring compliance obligations:

• Annual general assembly — shareholders must meet at least once per year to approve financial statements and the distribution of profits.
• Statutory books — share ledger, minutes of general assembly, and board of managers must be maintained and made available for inspection.
• Financial statements — annual balance sheet and income statement prepared in accordance with Turkish Financial Reporting Standards (TFRS or simplified standards for eligible companies).
• Tax filings — corporate income tax (25% standard rate), VAT, and withholding tax declarations at regular intervals.
• Trade Registry updates — any changes to managers, shareholders, registered address, or Articles must be registered with the Trade Registry within prescribed deadlines.

Foreign investors: rights and document requirements

Turkey's direct foreign investment law — DYYK (Law No. 4875), which replaced the former Law No. 6224 in 2003 — expressly guarantees that foreign investors establishing or acquiring shares in Turkish companies receive the same treatment as domestic investors. Key protections include:

• National treatment (milli muamele) — Art. 3/a: no sector is closed to foreign capital unless specifically reserved by law, and no additional burdens arise from foreign nationality alone.
• Free transfer of profits — Art. 3/c: dividends, capital proceeds, and sale proceeds may be freely remitted abroad through Turkish banks.
• Expropriation protection — Art. 3/b: the investment cannot be nationalized or expropriated except in the public interest, under due process, on a non-discriminatory basis, and with fair, timely compensation.

Documents for foreign natural persons

A foreign individual becoming a shareholder or manager of a Turkish Ltd. Şti. must provide:

• Notarized copy of valid passport (apostilled if issued abroad)
• Turkish tax identification number (vergi kimlik numarası) — obtained from the local Tax Office before MERSİS registration
• Notarized signature declaration (İmza Beyannamesi) — can be executed at a Turkish notary or Turkish consulate abroad

Documents for foreign legal entities

A foreign company acquiring shares in a Turkish Ltd. Şti. must supply an additional set of corporate documents, all apostilled and accompanied by certified Turkish translations:

• Faaliyet belgesi (Certificate of Incorporation / Certificate of Good Standing) — dated within 6 months
• Sicil özeti (Trade Registry excerpt) — showing the registered address, directors, and shareholding structure
• Vekaletname (Power of attorney) — duly executed and apostilled, authorizing the Turkish representative to sign all formation documents
• Board resolution of the parent company authorizing the investment

When to choose a Ltd. Şti.

The Ltd. Şti. is the right choice for the vast majority of businesses entering or operating in Turkey. It is particularly well-suited for:

• Foreign investors setting up an operational subsidiary in Turkey
• Startups and early-stage ventures that need a lean governance structure
• SMEs that do not intend to raise external equity capital or issue public shares
• Professional service firms, consulting companies, and trading entities
• Joint ventures with a small number of partners

If you are building a company that will raise external investment, issue shares to employees at scale, or potentially pursue a public listing, the Joint Stock Company (A.Ş.) is worth considering instead — it offers greater structural flexibility for those use cases.

Ltd. Şti. vs A.Ş.: quick comparison

Feature	Ltd. Şti.	A.Ş.
Minimum capital	₺50,000	₺250,000
Max. shareholders	50	Unlimited
Share transferability	Restricted	Freely transferable
Public offering	Not permitted	Permitted
Governance complexity	Low	Higher
Public debt liability	Shareholders liable (proportional)	Shareholders generally exempt
Best for	SMEs, subsidiaries, startups	Large enterprises, investment vehicles, IPO candidates