Limited Company or Sole Proprietorship in Türkiye: A Comparison for Foreigners

Short answer: for a foreigner who wants to live in Türkiye and work in their own business, a limited company (limited şirket) is usually more practical: one owner is enough, minimum capital is TRY 50,000, risk is generally limited to the contribution, and a shareholder-manager can get a work permit. A sole proprietorship (şahıs işletmesi) is simpler, but the owner is personally liable and needs an independent work permit.

Last updated: 27 October 2026.

This article compares business structures for foreigners in Alanya and Antalya. Step-by-step registration and documents are covered in our guide to setting up a company in Alanya, and general support is described on the corporate law page. Here we focus on the choice itself.

How does liability differ between a sole proprietorship and a limited company?

A sole proprietor is personally liable for business debts with everything they own, whereas a limited company is liable only with its own assets (Art. 602 of the Turkish Commercial Code No. 6102). A shareholder must pay the capital they committed and any additional obligations in the articles (Art. 573(2)). There are limits to this protection: under Art. 35 of Law No. 6183, shareholders are liable, in proportion to their shares, for tax and other public debts that cannot be collected from the company, and repeated Art. 35 together with Art. 10 of the Tax Procedure Law No. 213 makes the legal representative (the manager) personally liable in certain cases. Anyone acting for the company before registration is personally and jointly liable (Art. 588).

Can one person form a limited company, and how much capital is needed?

Yes. A limited company can be formed by a single person (Art. 573) and may have up to 50 shareholders (Art. 574). Under Presidential Decision No. 7887, the minimum capital has been TRY 50,000 since 1 January 2024 (Art. 580 and its official footnote); for a joint-stock company (anonim şirket) it is TRY 250,000 (Art. 332). The capital does not have to be paid before registration; as a rule, it is paid within 24 months after registration (Arts. 585 and 344). Existing companies below the new minimum had until 31 December 2026 to increase capital under Provisional Art. 15, which the Ministry may extend by one year at a time, up to twice — check the current deadline.

How are profits taxed?

A sole proprietor pays progressive income tax of 15% to 40% under Art. 103 of the Income Tax Law No. 193; for 2026 non-wage income, 15% applies up to TRY 190,000 and 40% to the part above TRY 5,300,000. A limited company pays 25% corporate tax under Art. 32 of the Corporate Tax Law No. 5520, and under Art. 32/C the tax cannot be lower than 10% of profit before deductions and exemptions. Dividends paid to shareholders are subject to separate withholding (Art. 94 of Law No. 193). The comparison therefore depends on your expected profit and whether you reinvest it; calculate it with a certified accountant (SMMM). For tax disputes, see our tax and administrative law page.

What books must be kept?

All commercial companies keep balance-sheet books (Art. 177(4) of Law No. 213). A sole proprietor below the annually updated thresholds of Art. 177 may keep a simpler income-and-expense book (Art. 178), and small artisans meeting the conditions of Arts. 46–47 of Law No. 193 may use the simplified regime (basit usul). A merchant must register the business with the trade registry within 15 days of opening (Art. 40 of the Commercial Code).

Does owning a company give you the right to live and work in Türkiye?

No, not by itself. A short-term residence permit "may be granted" to those establishing business connections or a business (Art. 31(1)(c) of the Law on Foreigners and International Protection No. 6458), for up to two years each time (Art. 31(2)); the documents are listed on e-ikamet. That permit does not include the right to work. Under Art. 10(5) of the International Labour Force Law No. 6735, a shareholder who is the manager of a limited company may work with a work permit, and a valid work permit counts as a residence permit (Art. 27 of Law No. 6458). According to the Ministry's evaluation criteria, the company's paid-in capital and the foreign shareholder's contribution must each be at least TRY 500,000, with at least a 20% share, and from the seventh month of the first permit at least five Turkish citizens must be employed every month; these criteria do not apply to shareholders with a capital contribution of USD 100,000 or more. A sole proprietor needs an independent work permit (Arts. 3 and 10(7) of Law No. 6735), which is discretionary.

Which structure suits short-term rentals and tourism?

If you let one or two of your own flats, a company is usually unnecessary: the tourist rental permit can be issued to a natural or legal person (see short-term rental permits). Managing other owners' flats, transfers or tours is a commercial activity that requires a registered business, and a foreigner who will work in it usually finds a limited company more practical.

Criterion	Sole proprietorship	Limited company	Joint-stock company
Legal entity	No	Yes, on registration	Yes, on registration
Minimum capital	None	TRY 50,000	TRY 250,000
Liability	Unlimited, personal	Company assets; public debts pro rata to shares	Company assets; public debts via legal representatives
Profit tax	Income tax 15–40%	Corporate tax 25%	Corporate tax 25%
Books	Income-and-expense or balance sheet	Balance sheet	Balance sheet
Foreigner working	Independent work permit	Work permit for shareholder-manager	Work permit for shareholder board member

Step	Setting up a limited company
1	Tax number for the foreign founder (see tax number and bank account)
2	Application and articles of association in MERSİS
3	Signing the articles before authorised trade registry staff (Art. 575)
4	Registration and publication; electronic notification to the tax office and SGK (Ministry of Trade)
5	Bank account; capital paid within 24 months
6	Work permit application for the shareholder-manager

For businesses in Antalya, see our Antalya page.

Frequently asked questions

Can I form a company without travelling to Türkiye?

Usually yes, through a representative with a notarised power of attorney; one issued abroad generally needs an apostille and translation.

Can the manager be a non-shareholder?

Yes, but at least one shareholder must hold management and representation powers (Art. 623).

Can a sole proprietorship later become a company?

Yes, Art. 194 of the Commercial Code allows a business to be converted into a company.

Does a company automatically give me residence?

No. It is a basis for applying for a residence or work permit; the authorities decide.

This article is general information as of 27 October 2026 and is not individual legal advice. Capital thresholds, tax rates and work permit criteria change — verify them at the time of your application.