25 Mayıs 2010 Salı

Establishing a Representative Office in Turkey

Foreign companies may open liaison offices in Turkey as long as their main function is to conduct market research, feasibility studies and find investment opportunities for the company. Commercial activity cannot take place.

Turkey’s new foreign direct investment law has not changed the procedures for liaison offices. Therefore, permission from the Undersecretariat of Trade, General Directorate of Foreign Trade must be granted to establish such an office. Initial permission is granted for three years. Extensions may also be filed.

Work Permits

Foreigners must obtain both a passport and visa to enter Turkey. Passport holders can purchase a 90-day tourist visa at their port of entry for $20.

Individuals desiring to remain longer than three months in Turkey for residence, research or study, must obtain a special visa before traveling to the country. A residence/work permit must also be obtained upon arrival to Turkey.


The pre establishment permits to be taken from The Undersecretariat of
Treasury and Ministry of Industry and Trade, required by the previous
legislation has been abolished.
It is now possible to establish a company just in 1 day when applied to the
related Trade Registry Office with the required documents. The company
gets its “legal entity” upon registration at the Trade Registry.
Incorporated Companies such as:
Joint Stock Companies
Limited Companies
Commandite Companies
Collective Companies
Unincorporated Companies such as:
Business Association
Banks, private finance institutions, insurance companies, financial leasing
companies, factoring companies, holding companies, companies operating
foreign currency exchange offices, companies dealing with public
warehousing, publicly held companies subject to the Capital Markets Law,
companies that are founders and operators of free zones are still subject
to permit from the Ministry of Industry and Trade.
The company’s stock capital is divided into shares and the liability of the
shareholders is limited to the capital subscribed and paid by the
shareholder. At least 5 shareholders (real person or legal entity) and
minimum capital of YTL 50.000 is mandatory. The mandatory company
organs are general assembly, board of directors and supervisory board.
It is the company established with at least 2 and at most 50 real person
or legal entities and the liability of the shareholders is limited to the
capital subscribed and paid by the shareholder.Minimum capital of YTL
5.000 is mandatory. Unlike joint stock companies, no stock certificate is
It is the company established to operate a commercial enterprise under a
trade name. Whereas the liability of some shareholders is limited to the
capital subscribed and paid by the shareholder (commanditer), for some
shareholders there is no limitation of liability. Legal entities can only be
commanditer. No minimum capital is required. The rights and obligations
of the shareholders are determined by the Articles of Association.
It is the company established to operate a commercial enterprise under a
trade name and, the liability of none of the shareholders is limited only to
the capital subscribed and paid by the shareholder. No minimum capital is
required. It is mandatory that all the shareholders be real person. The
rights and obligations of the shareholders are determined by the Articles
of Association.
3 copies of articles of association (one copy original) which are notarized
are prepared.
Following the notarization of articles of association, within 15 days at
latest, application to the relevant Trade Registry Office with the
documents set below is needed.
Documents for the Company Establishment
1. Company Establishment Petition and Notification Form, duly filled
in and signed by persons authorized to represent the company,
2. Notarized signatures of persons authorized to represent the
company together with the company trade name,
3. Letter of Commitment in accordance with Article 29 of the Trade
Registry Regulation,
The list of the documents to be procured and forms to be filled can be downloaded from
www.sanayi.gov.tr and www.hazine.gov.tr
4. Bank receipt of the deposit, amounting to 0.04% of the company
5. Certified copies of the ID certificates of the real person founders
and their residence certificates (if they have Turkish citizenship),
6. In case there are any real persons of foreign citizenship among the
founders of the company, the xerox copy of his/her passport to be
presented together with the passport itself or its notarized copy,
7. In case the foreign shareholder(s) is a legal entity; the original
copy of the Certificate of Activity issued by the competent
authorities and approved by the relavant Turkish Consulate or
apostilled and its notarized translation,
8. In case there are any rights and movable and immovable assets to
be put in as capital for a company to be established; expert report
of the assesment made to ascertain the value of these and the
related court decision for the expert assignment.

Establishing a New Company in Turkey

Within the framework of the current Turkish trade law, there are three main types of business entities that can be formed: Merchant, Commercial Partnership and Cooperative.

Merchant (Single Proprietorship): The person who is running a commercial establishment individually is accepted as a firm. Click here for a list of required documents.

Commercial Partnership: Commercial partnership companies are divided as follows:

Joint-Stock Company: Under this structure, the company’s stock capital is divided into shares and the liability of the share holders is restricted with the capital subscribed by the shareholder. At least five share holders (real persons or legal entities) and minimum capital of 50,000 TRY is mandatory.
According to the current Turkish trade law, the following types of entities should be established as joint-stock companies: banks, private finance institutions, insurance companies, financial leasing companies, factoring companies, holding companies, companies operating as foreign currency exchange offices, companies dealing with public warehousing, publicly held companies subject to the Capital Markets Law, companies that are founders and operators of free zones. These companies are subject to permit from Ministry of Industry and Trade for their foundations.

Click here for a list of required documents.

Limited Liability Company: This is a company established with the participation of a minimum of two and a maximum of 50 real persons or legal entities. The liability of the shareholders is restricted only to the capital subscribed by the shareholder. Minimum capital of 5,000 TRY is mandatory. Unlike joint-stock companies, no stock certificate is issued.
Click here for a list of required documents.

Collective Company: This is an association that has been established for the purpose of engaging in commercial activities under a common trade name. Its most important characteristic is the unlimited liability of the partners for the debt of the association. No minimum capital is required. It is mandatory that all shareholders be a real person. The relationship between shareholders is designated in the articles of association freely.
Click here for a list of required documents.

Commandite Company: Under this structure, some of the partners are liable for the association's debts in the amount of capital which they contributed, while the other partners have unlimited liability. Partners with unlimited liability are called active partners (commandite); those with limited liability are silent partners (commanditer). Legal entities can only be commandite. No minimum capital is required. The relationship between shareholders is designated in the articles of association freely.
Click here for a list of required documents.

Cooperative Association: This is a business association established by persons who want to jointly supply various needs connected with their professions, crafts and livelihoods. Such an association is based on the principle of mutual help and suretyship. Arrangements related to cooperative associations are governed by the Cooperatives Law.
This article is taken from Istabul Chamber of Commerce

24 Mayıs 2010 Pazartesi

Buying property in Turkey


This guidance was prepared with the purpose of assisting foreign nationals to avoid problems in buying immovable property (real estate) in Turkey. However, the guidance should not be considered a substitute to necessary professional consultancy service.

1. Legal Basis:

Real persons of foreign nationality may buy property in Turkey if reciprocity exists between Turkey and the country of which they are a citizen. Information on reciprocity lists can be obtained either from your country`s diplomatic missions in Turkey, or from the Turkish Embassy/Consulates General in your country. Real persons of foreign nationality are advised to take due notice of the following points in order to avoid incurring loss when buying immovable property.

2. Official drawing up of contracts:

According to effective Turkish legislation, official contracts transferring ownership of real estate must only be drawn up at the Land Title Registery Office where the immovable is located. It is possible also to sign, in the presence of a notary public, a “promise-to-sell” contract prior to the official sale.

Acquisition of ownership of the immovable, the sale contract of which is concluded, can take effect only after registration at the Land Title Registery Office.

3. Legal Restrictions on Sale of Real Estate to Foreign Nationals:

A. Foreign nationals may buy immovable property in Turkey, as a work place or private residence, provided reciprocity exists between Turkey and their country, and legal restrictions are observed. However, the total area of the immovables purchased by a foreign national may not exceed 25.000 (twenty five thousand) square meters, even if the immovables are in different localities.

B. Permission has to be obtained from the military authorities of the region, through the Land Title Registry Office, before the purchase of an immovable. Sale to foreign nationals of immovable property located in a military security area is prohibited by law, and it is important to clarify this matter before any payment is made.

4. Practical Information:

A. Real persons of foreign nationality should bring with them the following to Land Title Registry Offices when acquiring immovables;

- Identity document or passport,
- Foreign nationals whose acquisition of property is subject to a valid residence permit: Residence permit issued by the relevant police department,
- If they wish to act on the basis of a power of attorney issued abroad (i.e. outside Turkey), the original or certified copy of the power of attorney together with a certified Turkish translation.

B. Before a real estate sale contract is drawn up, an inquiry should be made at the relevant Land Title Registry Office as to whether such immovable is subject to restricted real rights, mortgaged, or any other situation exists which prohibits its sale.

C. Foreign nationals who wish to buy real estate in Turkey are advised,

- not to sign legally binding sales contracts or make any payments before obtaining information at the correct Land Title Registry Office about the immovable involved,
- not to initiate procedures before investigating the sales persons or agencies involved, and to refrain from conducting business with persons or agencies who are not able to provide sufficient proof of their credibility.

In case of a disagreement concerning the sale or purchase, the matter has to be referred to the judiciary, and a lawsuit has to be filed with the Turkish courts. It is not possible for the Ministry of Foreign Affairs of Turkey and Turkish diplomatic missions to interfere in the judicial process.
This article is taken from http://www.mfa.gov.tr/guidance-for-foreigners.en.mfa

Franchise in Turkey

1-What is Franchising?
Franchising is a business system composed of a brand name, a "system" or format implying the distribution of a product and/or service through a network. This system replicates itself with every new business partner (franchisee) that invests and becomes another member of the network. Franchising is a contractual agreement between two parties. Franchising is founded and first applied in America. There are almost 60 sectors working with this system. These sectors include ; Car Rental, Car Care, Services, Business Material, Shoes and Accessories, Interior decoration, Computers, Cosmetics, Retail Stores, Education, Food, Medical Supplies, House Appliances, Dry Cleaning, Fast-Food, Hospitality and Restaurants. Most of the variety is seen in the service sector. The dictionary meaning of the word franchise means privilege. From the French word "Affanchir" the word franchising has born. Franchisor is the one who gives the rights of the brand, which can be a service, product, and knowledge to another party for certain amount of Money. Franchisor is the protector and organizer of the franchising system created by the franchisees.
2. What are the types of Franchising?
Franchising System can be analyzed in two groups. Depending on the country, we can categorize it as International and National Franchising. According to the opportunities there is also Product and Brand Franchising and Business Format Franchising as sub categories.
A. What are National and International Franchising?
If the franchising contract is done between parties in the same country it is called national franchising, If the contract is between two countries than it is considered international franchising.
B. What is Brand and Product Franchising?
Brand and Product franchising started in America as a relation between buyers and sellers. In this relationship the buyer tries to identify themselves as the seller. Through the marketing of the same products by different buyers creates a unity amongst firms. The important thing at this type of franchising the use certain brand and product. Car and Truck Sales, Gas Station, non-alcoholic beverage manufacturers are some of the examples to this type of franchising.
C. What is Business Format Franchising?
This system requires the franchisor and the franchisee to work together not just by the means of the product but also on the management level as well. The simplest way to explain this is ‘selling the brains’ of the brand. Hotels, restaurants, retail stores, rental and counseling services are few examples. This format has been used more in the last years and consists of 4 main topics. These are;- Franchisor gives rights to the franchisee to use the name or the brand.
- Franchisor has control over the franchisee through the term of the contract.
- Franchisor helps and supports the franchisee through the term of the contract.
- The royalty is paid by the franchisee in decided terms.
3. What are the benefits of the franchising system to the franchisee?
Franchisee gets to benefit from an established brand that is experienced, successful and well-known with help and support of the franchisor.

- The international quality is achieved immediately..
- Customer trust is already established.
- Franchisor can provide personnel and training.
- The procedures such as hiring is easier with the support of the franchisor.
- The support in finances, accounting and marketing increases the chances of success-The risks of opening a small business is minimized
- Franchisees can benefit from the franchisors counselors and legal team.
- Franchisee can benefit from the past experiences of the franchisor.
- When starting up it is easier to get loan or lease for franchisees.
- The cost of advertising and marketing is minimized.
- The franchisee isn’t alone when starting up and the risk of bankruptcy is minimal.
- Although the initial payment is higher than a normal small business but the follow up expenses are much less.
4. What are the downsides of the Franchising System to the Franchisee?
- Creativity is lost.
- There is the obligation of following the rules and regulations of the franchisors.
- If the franchisee doesn’t pay attention then the franchisor ends up taking most of the profit .
- If the brand is widely known then it gets to be more costly.
- The products that the franchisee is obligated to buy from the franchisor can be costly than the market prices

- If the contract has loopholes then it can be more beneficial fort he franchisor.
- If there are trust problems between the parties then the franchisor can limit the franchisee in many ways.
5. What are the Benefits of the Franchise System to the Franchisor?
- The Money generated from the franchisee is profit fort he franchisor.
- The growth and expansion are achieved with minimum expenses.
- The increase in production creates an increase in the line of credit of the company.
-Faster and more selective distribution becomes possible.
- There is a constant circulation of information within businesses.

6. What are the downsides of the Franchising System for the Franchisors?
- The unpaid fees can be a problem.
- The payment for the services and equipment can be hard to collect.
- When the franchisee expects everything from the franchisor it can be a problem.
- A well- established brand can get a bad reputation because of a wrong choice of franchisee
7. What Should You Consider When Choosing a Franchisor?
The terms of the Franchisor is very clear in America. But it is not clear in our country. "American Associated of Franchisees & Dealers’ mentions 7 important facts about choosing a franchisor:A-The Franchisor has to sell his/her product or service in the best way possible.

Some firms try to sell the franchise first. The short term income from the stores can seem attractive from the long term income from the profits of the stores. Bu this way the franchisee can be confused in the long run. Well known big companies first came to Turkey to invest. The positive Picture created b these companies can be misleading. Like we see in every country fast growing franchises can come quickly but cannot achieve long term success. Franchisee has to take this into consideration.

B-Franchisors have to use the franchisees as their marketing toolThe franchisee has to choose franchisors that sell their own products and market them through catalogs, tv, etc. If the franchisor needs the franchisee for marketing purposes then their relationship has to be closer..

C-There has to be market demand fort he product/service.

If the business has so many duplicates in the market or not in demand anymore then the success may not be achieved.
D-The Brand has to be trusted and well-known.

The main reason to the investor to get a certain franchise is the brand recognition. One should also consider how the brand is known. The franchisee has to do a thorough market research
E-Franchisor should provide training, continuous support, and an effective marketing approach
F-The franchisor has to have good relations with the franchisees.

In order to have effective and successful business relations the knowledge and capability of the franchisor should be questioned.

G- The stores run by the franchisees has to keep good record of finances and sales.
8. What are the Obligations of Franchisors and Franchisees?
A- The obligations of the Franchisors

The franchisor has to follow these rules:
- Before working with the franchise system they have to work at a pilot store of their own. - The franchisor has to have the rights and royalties of a certain brand or service. - The franchisor has to provide training and support through the course of the contract.

B- The Obligations of a Individual Franchisee?

The individual franchisee has to follow these rules:
- They should be willing to work fort he improvement of the franchise system and keeping the brands reputation.

- The franchisee has to provide the franchisor with up to date information on finances and sales. They should be able to provide any paperwork when the franchisor asks for it.C- The obligations of both Franchisors and Franchisees

Both parties have to be honest. Franchisor has to warn the franchisee in writing if they don’t follow their part of the contract. The parties should try to reconcile their differences with honesty and dignity.
9- What are Ways of the Paying the ‘Franchising Fee’?
There can be different ways for payment of the franchisees: Lump Sum fee due at the signing of the contract. Royalty payments due at certain terms. Franchisor can also ask for extra fees for services provided to the franchisee. The payment type (cash, check, etc) will be decided by the contract.
10- What are stages of Establishing a Franchising Contract?
First of all the franchisor as to prepare a introductory package fort he franchisee. This package contains information about the firm and forms to be filled out as well as financial information. There are also three guidebooks that franchisor is obligated to give to the franchisee. First one is the book about the main company, second one is the book about the obligations of a franchisee, and third one about how to run the business also known as the ‘know-how’ book. Franchisee has to be very careful when choosing a Franchisor analyzing every aspect from finances to business conduct. At the same time the Franchisor has to do the same for the Franchisee. After getting acquainted the parties start negotiations. First they choose the business location. After that they decide on the capital, payment options and return on investment. According to the outcome the franchisee makes a decision and they sign the contract. The contract must be in detail covering all the aspects of the business. Upon singing the contract the franchisee starts the payments. The payments are made according to the articles of the contract and can be different for every franchisee. The franchisee then starts setting up the store. The decoration , training, and personnel is chosen with the help of the franchisor. Some franchisors will do everything fort he franchisee. After all the preparations the franchisee is ready to open for business. During this time a representative from the franchisor firm will be helping the new franchisee.
This article is taken from http://www.franchisedunyasi.com/english/index.php?option=com_content&task=view&id=84&Itemid=78

How to divorce in Turkey

Divorce Regulations

The Republic of Turkey legally recognizes marriages executed in Turkey only after the marriage is registered at a local Vital Statistics office (Nufus Dairesi). In Turkey, all family records are recorded in the Vital Statistics office that was the original home to the family. Even if no one currently lives in that area, births, marriages, divorces, and other events are recorded in this one location. In the event the marriage was executed in another country, the marriage may be registered through the nearest Turkish consulate. The Turkish Consulate will forward the documents to the office that handles that family record book.

To terminate a legal marriage recognized in Turkey, American citizens are required to obtain a court divorce decree from a Turkish civil court. Divorce decrees issued in jurisdictions outside of Turkey are not considered valid for purposes of divorce in Turkey. A divorce decree issued in the United States is valid for the purposes of petitioning for a beneficiary with the Department of Homeland Security and interviewing with the U.S. Embassy. However, under certain circumstances it may be advisable for the divorcees to also register the divorce with the Turkish courts in order to legally terminate the marriage in Turkey. This is not necessary for all cases and would generally only take place for a marriage which was originally registered with the Turkish courts, where one member may continue to reside in Turkey, and for the purposes of that person’s legal standing within Turkey.

A power of attorney, available in Turkey from any notary public, must be granted to an attorney who will start the divorce proceedings. A separate list of attorneys is also available from the U.S. Embassy.

Divorce proceedings are generally open to the public. However, at the request of either party, a judge may choose to preside over a closed or private court case. Judges may also take temporary measures for the protection of the parties, their property, and the welfare of their children.

When a divorce case is opened, a judge may decide on separation if he or she determines there is a possibility of the parties reconciling. A period of 1-3 years can be given for separation before the final decision to grant a divorce is reached.

Following a divorce, the woman generally resumes the last name she had before the marriage. She may, however, continue to use her husband's last name if the judge approves this decision. The divorced woman may not legally remarry within 300 days following the date of the dissolution except in cases where court permission is obtained. Additionally, some divorce decrees may have a specific notation restricting marriage for any reason; the party subject to the restriction may not remarry within the period specified on the decree.

In divorce cases in Turkey, the court also rules on child custody issues. The court may compel non-custodial parents to contribute to each child's health and education expenses in proportion to the parent's economic status.

Chapter 2 of the Turkish Civil Code provides the following possible grounds for opening court cases for a divorce or separation in Turkey:

Adultery, Maltreatment, threat to life, severe insult
Committing a crime which degrades the integrity or the prestige of the other party
Deserting home: If one of the parties leaves home and does not return for at least 6 months without showing a valid reason and also does not respond to the Judge's warnings, the deserted spouse may open a court case for a divorce. The party who has forced his/her spouse to leave home or who prevents the return of the spouse without any valid reason is also considered to have deserted his/her home.
Mental illness: If one of the parties has a mental problem which is confirmed by an official medical committee report that it cannot be treated, a court case for a divorce can easily be opened.
Incompatibility: Though this is the widest area of grounds for opening divorce cases, the Defendant has the right to reject a court case if the Plaintiff is found to be more at fault. If the judge, however, decides that the right of rejection is being exploited and that there is no benefit for the Defendant and the children in maintaining the marriage, a decision for divorce can be made.
If the marriage has lasted for at least one year and a joint application for divorce is made, or a court case opened by one spouse is accepted by the other spouse, the marriage is considered to be impaired. In such cases, the Judge listens to both sides and approves the agreement reached by the parties regarding the protection of the children and financial affairs. The Judge has the authority to make any changes on the arrangements. If both parties consent to these changes, the divorce decision is given.

If three years have elapsed from the date a divorce case is rejected and living together has not been established, the marriage is considered to be impaired and a divorce decision is given upon application to the court by either spouse.
This article is taken from http://turkey.usembassy.gov/marriage_devorce.html