Setting Up a Sole Proprietorship in Turkey as a Foreigner: 2025 Guide
Setting Up a Sole Proprietorship in Turkey as a Foreigner: 2025 Guide
Setting Up a Sole Proprietorship in Turkey as a Foreigner: 2025 Guide
Introduction
Turkey has become a popular destination for freelancers, digital nomads, and international entrepreneurs seeking tax advantages, an affordable cost of living, and strategic access to European, Asian, and Middle Eastern markets. One of the most flexible ways for foreigners to start a business in Turkey is by establishing a sole proprietorship (şahıs şirketi).
This guide outlines the key legal, tax, and operational aspects of setting up a sole proprietorship in Turkey in 2025 — tailored specifically for non-Turkish citizens.
1. Can Foreigners Set Up a Sole Proprietorship in Turkey?
Yes, foreign nationals can establish a sole proprietorship in Turkey under certain conditions. The process is relatively simple compared to setting up a limited liability company (LTD).
However, there are important legal and practical steps to consider, especially regarding your residence permit, address registration, and tax obligations.
2. What Are the Legal Requirements?
| Requirement | Details |
| Residence Permit | Must have a valid residence permit (short-term, family, or long-term) |
| Address | A physical address is mandatory (owned or rental, even a family home) |
| Tax ID Number | Obtainable from any local tax office with passport and residence card |
| Chamber Registration | Not required for sole proprietorships unless operating in specific trades |
3. What Are the Steps to Set Up?
Step-by-Step Process:
Get a Tax ID from the local tax office.
Choose a business activity (e.g., software, consultancy, design).
Sign a declaration at a registered accountant’s office.
Register your business with the tax office through a sworn CPA (yeminli mali müşavir).
Receive your official tax plate (Vergi Levhası) within 2–3 business days.
4. What Are the Tax Benefits?
Sole proprietors in Turkey benefit from:
| Benefit | Details |
| Up to 80% Tax Exemption | If exporting digital services like software or consulting |
| Progressive Tax Rates | Income tax starts at 15% (2025 brackets apply) |
| No Corporate Tax | Sole proprietors are taxed under personal income, not corporate tax |
| Deductible Expenses | Rent, equipment, travel, utilities, etc. can be deducted from taxable income |
5. Is It Safe and Legal?
Yes — the structure is fully legal and recognized by Turkish tax authorities. When managed by a registered CPA, you’ll avoid the risk of audits, penalties, or visa-related issues.
Many foreigners are already operating under this structure, particularly those offering remote services to clients abroad via:
Upwork
Fiverr
Crossover
Private contracts
6. What Documents Will You Need?
Passport copy
Turkish residence permit (valid for at least 6 months)
Address documentation (utility bill or lease agreement)
Personal tax number (from the local tax office)
7. Can I Invoice Foreign Clients?
Yes. You can issue e-invoices to foreign clients in USD, EUR, or other currencies. These invoices are tax-exempt if services are fully performed from Turkey and your clients are outside of Turkey (per Turkish VAT Law Article 11).
You are also eligible to use platforms like:
Wise
Payoneer
TransferWise
Turkish business bank accounts (Ziraat, İş Bank, Garanti BBVA)
8. Will This Affect My Visa or Residency?
Proper business registration strengthens your visa status. The Turkish immigration authority often requires proof of economic activity for renewals of residence permits. Your sole proprietorship and tax filings can serve as solid supporting evidence.
9. Why Work with a CPA?
Because rules can change quickly. Working with a CPA ensures:
Accurate registration
Safe tax filing
Access to up-to-date legal advice
Peace of mind during audits or cross-border transactions
Final Thoughts: Is It Worth It?
If you’re a remote professional, freelancer, or creative entrepreneur looking for a cost-effective, legally sound way to operate in Turkey, a sole proprietorship is one of the best options.
The process is faster and cheaper than forming a limited company, and with the right guidance, it can be set up within a few days.
💼 Ready to Get Started?
We help dozens of foreign clients each month to start and manage their sole proprietorships in Turkey. Our services are fully English-speaking and designed to minimize your time and maximize your compliance.
📩 Contact us for a consultation and see how we can help you operate safely, legally, and tax-efficiently in Turkey.
info@ozmconsultancy.com
