The first question Chinese investors who decide to set up a company in Türkiye usually face is this: limited or joint-stock? And if you already have a company in China, you might also consider opening a branch or liaison office in Türkiye. Each structure has its own characteristics in terms of number of shareholders, capital requirements, management style, share transfer, financing options and day-to-day compliance obligations. Choosing the right company type puts your company on the right path from day one. In this article we explain the key differences between a limited company and a joint-stock company with clear comparisons, describe when a branch or liaison office is appropriate, and offer selection recommendations for different business models. By the end, you will be able to discuss your own company structure with your advisor with much greater confidence.
Which Company Types Can Foreign Investors Choose in Türkiye?
The Turkish Commercial Code provides for various forms of commercial enterprise, but the two capital companies most often chosen by foreign investors are the limited company and the joint-stock company. Both have separate legal personality, shareholders' liability is essentially limited to the capital they contribute, and they can carry out almost any lawful commercial activity. Like local investors, foreign investors can be shareholders as individuals or legal entities, and can own the entire company. This flexibility allows Chinese investors to design their structures in Türkiye freely according to their own needs.
Besides setting up a new company in Türkiye, companies registered in China have two further options. The first is opening a branch: a branch is the parent company's extension in Türkiye and can carry out commercial activities, but has no separate legal personality. The second is setting up a liaison office: a liaison office is mainly used for market research, communication and promotion, and cannot carry out commercial activities aimed directly at profit. Below we compare these structures one by one and explain which business model each suits best. That way you can see all the alternatives side by side when making your choice.
What Is a Limited Company? Advantages and When It Fits
The limited company is the most common choice for small and medium-sized foreign-owned businesses. It can be set up with a single shareholder, and there is a legal upper limit on the number of shareholders; the company is managed by one or more managers, its structure is simple and decision-making is quick. The minimum capital is set by current legislation and is generally lower than for a joint-stock company; we confirm the current amount for you. For trading companies, service companies, structures converted from liaison offices and new ventures, the limited company is often the most balanced solution in terms of cost and efficiency.
One point to know is that share transfer in a limited company is a relatively formal process: the transfer is usually made with a notarized share transfer agreement and general assembly approval, then registered with the trade registry. In addition, under the relevant Turkish legislation, limited company shareholders may in certain cases be held liable for the company's public debts in proportion to their shares. As long as the company files its returns on time and keeps its accounts in order, this generally poses no problem in day-to-day operations. Working with a professional certified accountant makes this assurance permanent.
- Can be set up with a single shareholder; simple structure
- Managed by managers; fast decision-making
- Minimum capital is generally lower than for a joint-stock company
- Share transfer requires a notarized agreement and general assembly approval
- Suitable for trading, services and small-to-medium projects
What Is a Joint-Stock Company? A Strong Structure for Growth and Investment
A joint-stock company can also be set up with a single shareholder, but there is no upper limit on the number of shareholders and the capital is divided into shares. The company is managed by a board of directors, which may consist of one or more members; members can be foreign nationals. The minimum capital of a joint-stock company is generally higher than that of a limited company; the current amount is set by current legislation. Its biggest advantage is much more flexible share transfer: bringing in new investors, granting shares to employees and considering a future public offering are far easier in this structure. It offers a strong foundation for investors with large-scale plans.
In addition, in certain sectors such as banking, insurance and some finance and energy activities, the joint-stock company structure is mandatory by law; in large-scale tenders, a joint-stock company identity also makes a stronger impression. Corporate governance requirements are relatively greater for joint-stock companies; for example, once capital exceeds a certain threshold, an obligation to retain a contracted lawyer arises, and some companies are subject to independent audit. The applicable thresholds are set by current regulations. For Chinese companies planning long-term, large-scale investment, the joint-stock company is often the most forward-looking choice.
Limited or Joint-Stock? Comparing the Key Differences
When you place the two company types side by side, the differences become much clearer. The limited company is simpler in terms of formation and day-to-day management; it suits businesses with few shareholders and relatively focused operations. The joint-stock company, on the other hand, has advantages in share transfer flexibility, financing capacity and corporate image; it suits companies planning to bring in multiple investors or grow rapidly. For tax purposes, both types are essentially subject to the same corporate tax system; so the choice should be based on management and growth needs rather than tax burden. The right question is not “which is cheaper” but “which fits my plans better.”
It should also be noted that the company type is not set in stone. Many businesses start as a limited company and convert to a joint-stock company as they grow, in compliance with legislation; such a change can be made in Türkiye in accordance with the law. So if you cannot decide clearly today, you can start with a lighter structure and leave room in the articles of association for future growth. By reviewing your five-year plan together, we help you identify the most suitable starting point. That way, today's choice becomes a solid step rather than an obstacle to tomorrow's growth.
- Number of shareholders: limited has an upper limit, joint-stock has none
- Management: managers in a limited company, a board of directors in a joint-stock company
- Share transfer: notary and general assembly approval for limited, more flexible for joint-stock
- Minimum capital: generally higher for joint-stock, per current legislation
- Financing and public offering: the joint-stock company has the edge
Opening a Branch in Türkiye: A Direct Extension of the Parent Company
If you want to operate in Türkiye directly under the name of your parent company in China, opening a branch is an option. The branch is registered with the trade registry in Türkiye; it can sign contracts, issue invoices, employ staff and is taxed under Turkish tax legislation on the income it earns in Türkiye. Since the branch has no separate legal personality, liability arising from its activities ultimately rests with the parent company; this point should be taken into account when deciding. On the other hand, a branch offers the advantage of carrying the parent company's reputation and references directly into the Turkish market.
To open a branch, documents such as the parent company's registry documents, board resolution and articles of association are prepared, then notarized, apostilled and translated into Turkish. A fully authorized branch manager or representative must also be appointed in Türkiye. The branch structure suits companies with an established brand in the international market that want to manage operations from a single center, for example firms carrying out project-based construction or contracting work. At Yeni İpekyolu (New Silk Road), we compare the contractual, tax and management differences between a branch and a subsidiary for you.
What Is a Liaison Office? A Flexible Step to Get to Know the Market
A liaison office is a non-profit structure through which a foreign company carries out activities in Türkiye such as market research, customer communication, brand promotion and purchasing coordination. It is set up with permission from the Ministry of Industry and Technology; the permit is granted for a set period and can be extended in accordance with the legislation. A liaison office cannot issue sales invoices or engage directly in commercial activity; its expenses are covered by funds sent from abroad by the parent company. The applicable conditions are set by current regulations, and we confirm the current requirements for you.
For companies still evaluating the Turkish market that want to build a team and network first, a liaison office is a low-risk way to start. It can employ local staff and demonstrates the company's long-term commitment to Türkiye on the ground. Once the market opportunity is confirmed, a limited or joint-stock company can be set up and the resources accumulated during this period transferred smoothly to the new structure. At Yeni İpekyolu, we support you throughout the permit application, office address arrangements and the subsequent transition to a full-fledged company. That way you move forward with the right structure at every stage.
Choosing a Company Type: The Right Decision for Your Business Model
You can make a quick assessment with a few simple questions: Do you need to issue invoices and make sales in Türkiye? If not for now, a liaison office may be sufficient. Are you planning to bring in multiple investors or go public in the future? Then a joint-stock company is more suitable. Do you want the activity to be undertaken and managed directly by the parent company in China? A branch can be considered. If you are starting trading or service activities in Türkiye for the first time and are looking for simplicity and efficiency, a limited company is often the safest starting point. These questions clarify the decision process in a few minutes.
Yeni İpekyolu's certified accountants and Chinese–Turkish consultants work with Chinese investors' company structure questions every day. By assessing your sector, capital plan, shareholding structure and work permit needs together, we provide a clear comparison and recommendation, and then handle formation, accounting, payroll and all compliance procedures from a single point. To find the right answer to the limited or joint-stock question for your business and start your journey in Türkiye with a solid structure, contact Yeni İpekyolu and schedule your free initial consultation.
Frequently asked questions
Which company type do Chinese investors prefer most in Türkiye?
Small and medium-sized trading and service companies mostly choose the limited company for its simple structure and efficient management. Companies planning large-scale investment, multi-shareholder structures or entry into special sectors more often prefer the joint-stock company.
Can a limited company later be converted into a joint-stock company?
Yes. Turkish legislation allows companies to change type; many businesses start as a limited company and convert to a joint-stock company as they grow. We provide support with all type-change procedures.
Is there a tax difference between the two company types?
Essentially both are subject to the same corporate tax system, and there is no significant difference in tax burden. Rates are set by current legislation; our certified accountants confirm the current rules for you and handle tax planning.
Can a liaison office sign contracts and collect payments?
A liaison office cannot engage in profit-oriented commercial activity, issue sales invoices or collect sales proceeds. If you want to sell in Türkiye, we recommend setting up a limited company, joint-stock company or branch.
Can foreigners be managers or board members of a Turkish company?
Yes. Foreigners can be managers in a limited company and board members in a joint-stock company. If they will work in Türkiye on an ongoing basis, a work permit is usually also required; Yeni İpekyolu handles this process as well.