Joint Stock Company (A.Ş.) Formation in Turkey

What Is a Joint Stock Company (A.Ş.)?

A Joint Stock Company — known as Anonim Şirket (A.Ş.) in Turkish — is the larger of the two main company types available in Turkey. It is the preferred structure for larger investments, companies planning to go public, and businesses that require a formal corporate governance framework.

The A.Ş. is governed by the Turkish Commercial Code (TCC) and is broadly comparable to corporations in other jurisdictions (e.g., AG in Germany, S.A. in France, Corporation in the US).

When to Choose A.Ş. Over LLC

The LLC (Limited Şirket) is simpler and cheaper to form, making it the right choice for most small-to-medium foreign investments. However, an A.Ş. is the better option in certain situations.

Choose an A.Ş. if:

• You plan to raise capital from multiple investors
• You want freely transferable shares
• Your industry requires A.Ş. status (banking, insurance, capital markets)
• You plan a future IPO on Borsa Istanbul
• Your initial investment exceeds $500,000

Requirements

Shareholders

• Minimum 1 shareholder (individual or corporate)
• No maximum limit on number of shareholders
• 100% foreign ownership is permitted
• Shareholders can be any nationality

Capital

• Minimum share capital: 250,000 TRY
• At least 25% (62,500 TRY) must be deposited before registration
• Remaining 75% must be paid within 24 months
• For registered capital system: minimum 500,000 TRY allowing capital increases without amending the articles of association

Board of Directors

• Minimum 1 board member (can be a single director for single-shareholder companies)
• Board members may be foreign nationals
• At least one board member must be authorized to represent the company
• Board members do not need to be shareholders

Auditing

Independent auditing is required if the company exceeds two of three thresholds in consecutive years:

• Annual revenue: 200 million TRY
• Total assets: 100 million TRY
• Number of employees: 150

Companies below these thresholds are not required to appoint an independent auditor.

Formation Process

Step 1: Prepare articles of association

Draft the articles of association (esas sözleşme) including:

• Company name and trade name
• Registered address
• Business purpose and activities
• Share capital amount and distribution
• Board of directors composition
• Shareholder information
• Financial year (typically January–December)

The company name must include “Anonim Şirketi” or “A.Ş.” in the title.

Step 2: MERSIS registration

Register the company and articles of association on the MERSIS platform (Central Registry System). This generates a unique registration number required for all subsequent steps.

Step 3: Obtain potential tax number

Apply at the local tax office for a potential taxpayer identification number. This number is needed for the bank account opening.

Step 4: Deposit share capital

Open a corporate bank account at a Turkish bank and deposit at least 25% of the declared capital. The bank issues a capital blockage certificate (sermaye blokaj belgesi).

Step 5: Notarize documents

• Notarize the articles of association
• Notarize shareholder signatures and declarations
• Notarize board member acceptance declarations
• If shareholders are foreign individuals: notarize passport copies with sworn translations
• If shareholders are foreign companies: provide apostilled and translated corporate documents

Step 6: Apply to the Trade Registry

Submit the following to the local Trade Registry Office:

• Notarized articles of association
• MERSIS registration printout
• Capital deposit certificate from the bank
• Board member declarations and signature circulars
• Shareholder identity documents
• Registered address lease agreement or title deed
• Chamber of commerce registration form

Step 7: Tax office registration

After trade registry approval, register at the local tax office to:

• Activate the company tax number
• Open tax books
• Register for VAT
• Set up e-invoice capability (if applicable)

Step 8: SGK registration

Register the company with the Social Security Institution (SGK) for employee and director social insurance contributions.

Step 9: Additional registrations

Depending on your business activities:

• Chamber of commerce membership (mandatory)
• Industry-specific permits or licenses
• Environmental, health, or safety certifications
• Import/export registration (if applicable)

Timeline and Costs

Corporate Governance

A.Ş. companies are subject to more formal governance requirements than LLCs:

General Assembly

• Ordinary meeting: Must be held within 3 months of the financial year end
• Extraordinary meetings: Can be called by the board or by shareholders holding 10%+ of shares
• Key decisions: approval of annual accounts, board discharge, profit distribution, capital changes

Board of Directors

• Manages and represents the company
• Meetings may be held in person or electronically
• Board resolutions require a majority of present members
• Board members owe fiduciary duties to the company

Profit Distribution

• At least 5% of net profit must be allocated to the legal reserve fund until it reaches 20% of the share capital
• Dividend distribution requires general assembly approval
• Withholding tax of 10% applies to distributed dividends (may be reduced under double tax treaties)

Share Transfers

One of the key advantages of the A.Ş. is the ease of share transfers:

• Bearer shares were abolished in 2020 — all shares must be registered (nama yazılı)
• Share transfers are done by endorsement and delivery; no general assembly approval needed unless restricted in the articles of association
• Share transfers must be recorded in the company’s share register
• No notarization required for share transfers (unlike LLC share transfers)

Advantages for Foreign Investors

• Freely transferable shares — easier to bring in new investors or exit
• No shareholder limit — suitable for large investor groups
• IPO-ready — can list on Borsa Istanbul
• Single-person A.Ş. — a single foreign individual or company can form an A.Ş.
• Credibility — A.Ş. status carries more prestige with banks, government agencies, and business partners in Turkey
• Required for certain sectors — banking, insurance, and capital market activities require A.Ş. status

Frequently Asked Questions

Can a single person form an A.Ş.?

Yes. Since 2012, a single shareholder (individual or corporate) can form and operate a Joint Stock Company in Turkey.

Can all board members be foreign?

Yes. There is no requirement for Turkish nationals on the board of directors. However, foreign board members will need work permits if they reside and work in Turkey.

Is annual auditing mandatory?

Only if the company exceeds the size thresholds. Most small-to-medium A.Ş. companies formed by foreign investors fall below these thresholds and do not require independent auditing.

Can I convert an LLC to an A.Ş. later?

Yes. Turkish commercial law allows type conversion from LLC to A.Ş. (and vice versa). The process requires a conversion plan, independent expert report, and general assembly approval.