The creation of a subsidiary in Turkey is one of the ways for foreign companies to expand their business abroad. Sometimes, companies want to grow their business in another country. Thus, they either need to get involved in the partner search process or establish a company that will function as the representative.
Subsidiaries are one of these corporation types with which foreign business owners can form a physical company to represent and run their business on a foreign company like Turkey.
This establishment process requires business investors to recruit talented candidates for their business. Along with finding qualified staff members, business owners also need to find a proper location in which they need to represent their business in the best possible way.
And most importantly, responsible officials of the companies must track the creation of the subsidiary process in detail to complete the legal requirements of Turkish law. Fulfilling the legal necessities is significant for the companies in the subsidiary creation process.
However, it is not relatively easy for foreign companies to conduct these necessities in a different country without any local help. On the one hand, there is a language barrier with other countries. On the other hand, the legal process of the nations can be very challenging to understand and analyze for foreign business owners.
In this regard, professional help from a local authority or an authorized company can answer foreign companies’ purposes for expanding the business. Thus, ERAI Turkey can meet the requirements for helping the foreign management and guide them professionally through the whole subsidiary establishment process.
ERAI Turkey is looking out for foreign companies willing to expand their business towards Turkey. By using the latest software programs and being a cost-effective third-party company, ERAI Turkey can handle the whole subsidiary creation process in Turkey according to Turkish laws. Also, it can help you finish the process without any drawbacks.
This article includes the following subheadings to reinforce the idea of subsidiary creation in Turkey and assist business owners more precisely:
· What is a Subsidiary?
· What are the Necessary Steps for Creating a Subsidiary in Turkey?
· What are the Advantages of Subsidiary in Turkey?
WHAT IS A SUBSIDIARY?
In the business environment, a subsidiary is a corporation owned by another company, which is commonly mentioned as the parent company or the holding company.
The parent business has a controlling interest in the subsidiary, which means it owns or controls more than half of the firm’s equity.
When a subsidiary is held entirely by another company, it is referred to as an owned subsidiary. When discussing a reverse triangle mortgage, subsidiaries become pretty crucial.
For the foreign entrepreneurs who wish to open a subsidiary in Turkey, there are several steps to consider and fulfill to create the subsidiary successfully. Here are the essential steps and documents you need to accomplish and attach in the process of subsidiary creation:
· Choosing the Structure of the Company
There are numerous corporation types for foreign business owners to choose from and open in Turkey. For the subsidiary, the limited liability company is the most suitable structure. In order to apply for this type, the parent company needs to abide by many requirements before the application process starts.
· Specifying the Physical Location
Registering the physical address of your potential subsidiary is among the first steps needed. If the subsidiary is intended to be opened in a Turkish city, the physical address needs to be in the Turkish town, too. Identifying your physical address in Turkey is the mandatory requirement for opening a subsidiary in Turkey.
· Opening a Local Bank Account
After the first steps for opening a subsidiary, business owners must deposit the minimum share capital requirements, which is approximately 0.04%. To accomplish this requirement without any error, business owners must open a local bank account on behalf of the company.
· Gathering the Necessary Documents for Incorporation
One of the essential steps to complete the process is fulfilling the necessary document required by the Trade Register Office and the Article of Association. The documents are obligatory for submitting the corporation.
· Taxation and VAT Process
Tax identification and VAT numbers are the next steps for business owners once their subsidiary registration is finished. To be recognized legally by Turkish authorities, tax identification must be received, and VAT numbers must be received by the local office.
WHAT ARE THE ADVANTAGES OF A SUBSIDIARY IN TURKEY?
Setting up a subsidiary in Turkey comes with its own advantages for its owner. The expansion of your business towards foreign countries is on the one hand, while the unique structure of the subsidiary and the income are on the other.
Here are the several advantages of the subsidiary listed below:
A subsidiary company is a separate structure with its unique and free formation. So, business owners do not need to monitor the subsidiary business almost every second. Its board management and staff members function the company separately and adequately.
We have mentioned above that the subsidiary has its own structure and management formation because it has freedom itself as a separate company. For this reason, it is much more flexible for business owners to specify and monitor the company’s function. Without being in Turkey physically, company owners can run the business remotely.
· No Unfamiliarity ProblemOpening a subsidiary in Turkey is a process that is absolutely promoted by the local Turkish authorities. Because of this, your company will be treated as a local company which creates an environment in which you won’t encounter any unfamiliarity problems.