It is set out in articles 514 (joint stock companies) and 610 (limited liability companies) of Turkish Trade Law and became effective with the regulation dated 28.08.2012 and numbered 28395.

The annual report is prepared by the company’s management and submitted to the board of directors.

The annual report provides information about the company to the company partners and other stakeholders.

Section Name  and  Content

a) General information

•    Period covered by the report
•    Trade title
•    Trade registry number
•    Address
•    Phone
•    Website and e-mail
•    Organization structure of the company
•    capital and shareholding structures and the changes occurred related to these during the accounting period
•    Remarks related to privileged shares, if available, and voting rights of the shares
•    Information on the management body, executives and number of personnel of the company
•    Rights and benefits granted to the company partners and executives
•    if available; information on the activities of the members of management body of the company carried out for themselves or on behalf of others within the scope of the permission granted by the general assembly of the company and the activities within the scope of competition ban.

b) Financial rights granted to the management body members and executives

•    Sum of financial benefits such as attendance fee, salary, premium, bonus, dividend etc.
•    Information related to the sum of the allowances, travel, accommodation and representation expenses and real and cash opportunities, insurances and similar

c) Research and development works of the company

This section provides information on the research and development works carried out by the company and the results obtained from them.

d) Company activities and important progresses related to the activities

•    Information on the investments made during the relevant accounting period of the company
•    Information on the internal control system (2) and internal audit activities of the company and the opinions of the management body on this
•    Information on the direct or indirect affiliates and share rates of the company
•    Information on the own shares acquired by the company
•    Explanation on the private and public audits carried out during the accounting period
•    Information on the lawsuits filed against the company and which might impact the financial status and activities of the company and their possible results
•    Explanations related to the administrative and judicial sanctions imposed on the company and managers/board of directors due to practices contrary to the provisions of the legislation
•    Information and evaluations if the targets set for the previous periods are achieved, general assembly resolutions are performed, and if the targets are not achieved or resolutions are not performed, then information and evaluations on their grounds
•    If an extraordinary general assembly was held during the year; then information related to the extraordinary general assembly including the date of meeting, the resolutions taken during the meeting and the transactions carried out related to these
•    Information related to the donations and aids granted and the expenditures made within the scope of social responsibility projects by the company during the year
•    If it is a member of group of companies; then the legal transactions carried out by the parent company or any member of the parent company in favor of the company or affiliated company through the instructions of the parent company and all other measures taken or avoided to be taken in favor of the parent company or any member company during the last accounting period
•    If it is a member of group of companies; according to the situations and conditions known at the moment when the abovementioned legal transactions are carried out or measures are taken or avoided to be taken, whether a duly counter performance was provided in any of the legal transactions and whether the measure taken or avoided to be taken caused a loss of the company, and if the company has incurred a loss, whether this loss was offset.

e) Financial status (3)

•    Analysis and evaluation of the management body related to the financial status and operating results, the realization degree of the planned activities and the status of the company against the strategic targets determined
•    The sales, efficiency, income making capacity, profitability and debt/equity ratio of the company compared with the previous years and information and future expectations related to the other matters that may provide idea about the operating results of the company
•    Determination and management body evaluations on whether the capital of the company is uncovered or deep in debt
•    If available, measures considered to be taken for improving the financial structure of the company
•    Information on profit distribution policy and if profit distribution will not take place, then its ground and the proposal on how to use the undistributed profit

f) Risks and evaluation of the management body  (4)

•    If available, information related to the risk management policy to be applied by the company against the anticipated risks
•    If established, information on the works and reports of the committee related to early detection and management of risk
•    Future risks related to sales, efficiency, income making capacity, profitability, debt/equity ratio and similar

g) Other matters

•    Explanations related to the incidents with special importance which arise after the end of the operating year and which might impact the rights of the shareholders, creditors and other relevant individuals and companies
•    This section may also include additional information considered as appropriate by the management body, provided to not be on the contrary to the provisions of this Regulation.

The matters to be considered in the annual reports of the parent company, in case of a group of companies (5)

Pursuant to the regulation, the following matters must take place in addition to the other provisions in the annual reports of the parent company in a group of companies:
a)    The situation and relevant grounds if the shares representing five, ten, twenty, twenty five, thirty three, fifty, sixty seven and hundred percent shares of a capital company are owned, directly or indirectly, or the amount of shares fall under these percentages,
b)    Information on the shares in the parent company of the companies in the group,
c)    Explanations related to the internal audit and risk management systems of the group related to the process on preparing the consolidated financial statements,
d)    If requested by one member of the management body, then the conclusion part of the report foreseen in article 199 paragraph four of the Law.

Matters to be considered related to future estimations

If future information or estimations are provided in the annual report, then it is obligatory to provide the rationales and statistical information which these are based on. The future information and estimations provided in the annual report must comply with the financial status and operating results of the company.

Preservation of annual reports and preservation period

Pursuant to article 82 of the Turkish Trade Law, each merchant is obliged to preserve the annual reports.The preservation period is 10 years. This period starts with the issuance date of the report.

Obtaining a Work Permit in Turkey

We understand needs that appear after setting up a company in Turkey. Some newly opened companies wish to hire foreign staff under their payroll. As an accounting firm in Turkey we help our clients to acquire work permit for their expatriate personnel.
Foreigners requiring a work permit in Turkey can apply inside or outside of Turkey.
•    Foreigners residing outside of Turkey can  apply to the Turkish Consulate located in their country of residence or country of citizenship
•    Foreigners who have a valid residence permit (valid for a minimum of 6 months, except for residence permits for educational purposes) can apply directly to the Ministry of Labor and Social Security
For further details or assistance with regards to obtaining work permit, we are ready to help you and your expatriate personnel.

Obtaining a Residence Permit in Turkey

Beyond being an accounting company in Istanbul, Turkey we offer specific solutions to foreigner wanting to start business in Turkey. One of the main necessities for foreign companie is to obtain a residence permit. Beside company formation, we offer residence permit service to our clients when setting up their business in İstanbul or throughout Turkey.

For long-term residency in Turkey, the applicant should submit the following documents to the local police department:
•    4 passport-size photos
•    Passport
•    Photocopies of the following pages of the passport: the page bearing the applicant’s photo, the page stamped at the last entry, the page indicating the validity and expiry date of the passport
•    A bank statement or a currency exchange slip reflecting to an asset in the amount of 300 USD for each month

Documents required to apply for a residence permit for work purposes:
•    4 passport-size photos
•    Passport
•    Photocopies of the following pages of the passport: the page bearing the applicant’s photo, the page stamped at the last entry, the page indicating the validity and expiry dates of the passport
•    The original and a copy of the work permit issued by the Ministry of Labor and Social Security

Outsource Payroll

Alparslan SMMM specializes in providing outsource payroll services in Turkey. We offer payroll and payroll related services, plus oversee social security operations in Turkey. We also offer payroll, social security and withholding tax services for the expatriate staff of foreign investors.

Payroll Services

Registration of new employee and related information

• Payroll calculation, including all details
• Monthly submission of payroll sheets
• To inform client of tax withholding and social security payments
• Communicate to official authorities for any relevant changes to employee’s status
• Consultancy service regarding issues employment procedures
• Preparation of legal reports for official authorities
• Deregistration of employee

Payroll Elements

Employee Deductions

• Social Security Insurance Deduction
• Social Security Insurance Unemployment Deduction
• Income Tax
• Stamp Tax

 Employer Deductions

• Social Security Insurance Deduction
• Social Security Insurance Unemployment Deduction

Calculation of Net Salary

Gross Salary (Total Employee Deduction + Income Tax + Stamp Tax)

Limited Liability Company

In order to set up a Limited Liability Company (LLC) in Turkey only one shareholder and a minimum capital of 10,000 TL are required. Shareholders who wish to establish a Limited Liability Company can be an individual or legal entity. All or some of the founders of an LLC can be foreigner. Setting up a Limited Liability Company is ideal due to its flexible structure. To incorporate  Limited Liability Company is easier than setting up a joint stock company in Turkey. The liability of shareholders is restricted with their share capital. Unlike joint stock compaines, an LLC cannot issue stock certificates, LLCs have at least two units; the company’ s general meeting and the managing directors.

Joint Stock Company

A minimum of one shareholder is required to set up a joint stock company in Turkey. Individuals or companies can incorporate a joint stock company and each shareholder may be a foreigner. A minimum capital of 50,000 TL is required to open a joint stock company in Turkey, that amount indicates the total amount of capital. Joint stock companies can issue stock certification as opposed to limited liability companies. Investors aiming to set up a company in Turkey should consider that important rule. In joint stock companies, shareholders liability is restricted with their share capital. Joint stock companies must have at least three units: general company meetings, a Board of Directors, and a supervisory board.

Holding Company

Holding companies generally participate in other companies and hold their outstanding shares. This means that holding companies usually do not conduct business by producing goods or services. Larger companies or multi-sector organizations  set up holding companies to allow the free flow of capital and ownership transfer.

Branch Office

Companies located abroad, and whose capital is divided into shares can establish a branch office in Turkey. Branch office liability is not restricted with the branch’s capital, it is restricted with the main company’s liability. A foreign legal entity that wishes to open a branch office in Turkey, has to appoint at least one managing director and regarding director must have residence permit in case the director is foreign citizen. Opening a branch office allows foreign companies to enter the Turkish market with minimal operations.

Liaison Office

Companies located abroad can open a liaison office in Turkey. Contrary to a branch office, liaison offices cannot conduct any commercial activity or receive any earnings according to Turkish Law. In order to set up a liaison office in Turkey, permission from the Directorate General of Incentive Application and Foreign Capital is required. A liaison office permit is granted for a maximum of three years. After three years the previous year activities and plans for future are considered for an extension.

Free Trade Zone Company

Our firm offers company formation services in a free trade zone, Turkey. Free trade zones have tax plus other advantages, that attract investors, Alparslan SMMM provides efficient solutions for foreign entrepreneurs who plan to start a business in a free trade zone.

Commandite Company (limited partnership)

Commandite companies are set up to conduct business under a trade name. Some shareholders’ liability is restricted with share capital, while other shareholders liability is not restricted. There is no minimum capital requirement.

Collective Company

Collective companies are similar to commandite companies, with the main difference being that only individuals establish collective company. The liability of shareholders is restricted with capital share.

Non Profit Organization (Foundation, Associations, NGOs)

Company Formation in Turkey

Alparslan SMMM provides a quick and easy process to set up Limited Liability Company in Turkey. We are able to complete the process within 7 working days. The entrepreneurs who want to start a business in Turkey, mostly aim to open a limited liability company due to its more flexible structure.

Limited Liability Company Formation

Opening a limited company in Turkey requires minimum  1 shareholder and the number of shareholders cannot exceed 50 real persons or legal entities. The liability of the shareholders is restricted only to the capital subscribed by the shareholder. A minimum capital of 10.000 TL is mandatory. Unlike Joint Stock companies, no stock certificate is issued.

Our services include managing every step of the company formation process. Below is the steps that are required for us to begin the process. Once we have all the required documentation, we will begin the process and after 7 days your company would  be ready to conduct business in Turkey.

The Steps of Company Establishment in Turkey

1.    To manage the documents will be provided from abroad.
2.    Preparation of draft documents, to make explanation to clients for notary apostille process abroad.
3.    Translation and notarization of the documents in Turkey.
4.    Preparing Article of Association
5.    Company Registry in Chamber of Commerce
6.    Preparation of Official Books for new company
7.    Obtaining Tax Number

Liaison Office Set Up

One of the legal services that we offer is setting up liaison office. As public accountant company in Turkey we offer  liaison office set up service for the foreign companies, which would like to take place in Turkey to conduct market search. Companies, located abroad can open liaison office in Turkey, on contrary branch office, liaison offices can’t conduct any commercial activity and can’t get any earning.
For the liaison office, permission of Directorate General of Incentive Application and Foreign Capital is required. Liaison Office permit is granted maximum three years. After three years for extension, previous years activities and plans for future are considered. Generally after 3 years the main company abroad would like to establish limited liability or joint stock company. In that point we assist our clients to set up the company and offer accounting services. By our experience in setting up liaison office we offer quality services and deal with accounting and payroll matters of liaison offices monthly basis.
Liaison Offices offer some advantages;
• To get information about new market
• Performing promotional and market seach activities before starting commercial business in future
• To conduct feasibility studies
• Following up business opportunities
• Liaison Offices employees’ salary is exempt from income tax.

Foreign Investment in Turkey

Turkey provides various incentives and grants to investors for the purpose of facilitating larger investments and capital contributions by local and foreign investors. The investment incentives scheme is continuously being amended to encourage investments in manufacturing and services, energy,  exports, etc. Our firm offers consultancy services for companies, whose target is to invest in Turkey by setting up a company.  There are many reasons to invest in Turkey some of which are listed below;
1.    Young, dynamic population
2.    Competitive, well trained labour force
3.    Transit  bridge between east and west
4.    Fast growing economy
5.    Easy to a open business
6.    New investment regulations encouraging foreign investors
7.    Customs Union in European Union
8.    Tax and Social Security incentives

VAT Exemption:

VAT is exempt for imported and/or domestically delivered machinery and equipment within the scope of the investment incentive certificate.

Customs Duty Exemption:

Customs duty is exempt for imported machinery and equipment within the scope of the investment incentive certificate.

Tax Reduction:

The income or corporate tax is calculated on the basis of reduced rates until the total amount of reduced tax reaches the amount of contribution to the investment.

Social Security Premium Support (Employee’s Share):

For additional employment created by the investment, the employee’s share of the social security premium calculated on the basis of the legal minimum wage will be covered by the government.

Social Security Premium Support (Employer’s Share):

For additional employment created by the investment, the employer’s share of the social security premium calculated on the basis of the legal minimum wage will be covered by the government.

Income Tax Withholding Allowance:

The income tax in regards to additional employment created by the investment, within the scope of the investment incentive certificate, will not be liable to withholding taxes.

Interest Payment Support:

Interest payment support is a financial support instrument provided for investment loans with a term of at least one year obtained within the scope of an investment incentive certificate. A portion of the interest/profit share regarding the loan equivalent, at most 70 percent of the fixed investment amount registered in the investment incentive certificate, will be covered by the government.

Land Allocation:

Land may be allocated for investments, with an investment incentive certificate, in accordance with the rules and principles determined by the Ministry of Finance.

VAT Refund:

VAT collected on construction expenses, made within the scope of strategic investments with a minimum fixed investment amount of  500 million TL, will be rebated.

Reseach & Development Support

The R&D Law provides special incentives for R&D investment projects in Turkey if a minimum of 50 personnel are employed in an R&D center. The incentives within the new law that will remain in effect until 2024 and include:
•    100 percent deduction of R&D expenditure from the tax base if the number of researchers exceeds 500, then in addition to the 100 percent deduction, half of the R&D expenditure increase incurred in the operational year compared to the previous year will also be deducted
•    Income withholding tax exemption for employees (this item will be effective until December 31, 2023)
•    50 percent of social security premium exemption for employers for a period of 5 years
•    Stamp duty exemption for applicable documents
•    Techno-initiative capital for new scientists up to 100,000 TL
•    Deduction from the tax base of certain funds granted by public bodies and international organizations

Capital Increase Service in Turkey

While the business is growing, the capital may be insufficient. In this case companies may decide to select capital increase by capital in cash or capital in kind. Alparslan SMMM specializes in company formation and provides professional service in process of capital increase in Turkey. For the capital increase process, the following is required:

• In order to realize capital increase, current committed capital must be paid.
• A report prepared by a certified public accounant stating the current committed capital is paid
• Company shareholders resolution for capital increase
• Registration of capital increase in the chamber of commerce

Capital Reduction in Turkey

The capital reduction can be made in accordance with Turkish Commercial Law. According to law the report prepared by an expert who is appointed by court, sets out that the rights of creditors of the company meet the actives of the company. Otherwise the capital reduction resolution can’t be taken. Our accounting and consultancy company conducts the process of capital reduction in Turkey for our client convince.

• The resolution of shareholders for capital reduction
• The amendment text is prepared for the article of association
• The determination of equity capital of the company. The report prepared by an expert who is appointed by the court, stating that the rights of creditors meet the actives of the company
• The general assembly resolution for joint stock companies
• Registration of capital reduction in the chamber of commerce

International Compliance Audit

We understand the need for our clients to have streamlined accounting procedures not only in Turkey, but throughout the world. We verify that our clients are compliant with all international accounting standards, including IFRS and IAS and specified formats. IFRS adoption implementation is beneficial for investors and entrepreneurs’ financial statements, by reducing the costs of comparing alternative investments and increasing the quality of information. As an auditing firm we offer financial reporting to our clients in accordance with IFRS.

International Independent Auditing

We provide third-party independent auditing in Turkey to assist the primary accounting firm as well as provide an additional set of eyes to ensure compliance and fulfill internal risk management requirements. International Independent Auditing ensures financial statements are entirely accurate.

• Internal Audit
• Compliance with IFRS