Accounting Obligations of Foreign Companies in Türkiye (2026)
Foreign companies operating in Türkiye are subject to the same legal and financial obligations as domestic entities. All accounting processes and financial reporting must comply with the Turkish Commercial Code and the Turkish Accounting Standards (TAS).
Main Accounting Obligations
Bookkeeping and Accounting Records
Foreign companies are required to maintain statutory books and accounting records in line with Turkish regulations.
All financial transactions — including income, expenses, and assets — must be accurately recorded, and accounting entries must be updated on a regular basis.
Additionally, companies are obligated to submit periodic tax declarations to the relevant authorities.
Mandatory Certified Public Accountant (CPA) Service
Appointing a licensed certified public accountant (mali müşavir) is a legal requirement for foreign-owned companies in Türkiye.
The CPA is responsible for:
- ensuring accounting compliance
- preparing and submitting tax declarations
- monitoring adherence to fiscal and legal regulations
This role is essential for maintaining transparency and avoiding regulatory risks.
Financial Statements and Reporting
At the end of each fiscal year, companies must prepare financial statements and complete their statutory reporting obligations.
Companies subject to independent audit must apply the Turkish Financial Reporting Standards (TFRS) when preparing both individual and consolidated financial statements.
Tax and Related Obligations
| Obligation | Details |
|---|---|
| Corporate Income Tax | Income generated in Türkiye is subject to corporate tax, similar to domestic companies |
| Value Added Tax (VAT) | Applicable depending on the type of business activity |
| Withholding Tax | Applied to rental payments and employee wages |
| Social Security and Payroll | Employees must be registered with the Social Security Institution and payroll obligations fulfilled |
| Tax Declarations | Monthly, quarterly, and annual filings are mandatory |
Branches and Operational Structures
Foreign companies may operate in Türkiye through a branch without establishing a separate legal entity.
However:
- branches are considered taxpayers in Türkiye
- corporate income tax applies to locally generated profits
- the branch name must include both the headquarters and branch information, clearly indicating its legal status
Tax Advantage for Service Exports (80% Profit Exemption)
Companies engaged in service exports — such as:
- software development
- engineering
- design
- data processing
- certification
- product testing
may benefit from a significant tax incentive.
Key benefit:
- up to 80% of income from these activities can be deducted from the corporate tax base
Important condition:
- service revenue must be transferred in foreign currency to a bank account in Türkiye by the corporate tax filing deadline (end of April)
Failure to meet this condition results in the loss of the tax benefit.
Minimum Capital Requirements and Compliance (Effective in 2026)
As of 2026, newly established foreign-owned companies are subject to updated minimum capital requirements:
- Limited Liability Company: 50,000 TL
- Joint Stock Company: 250,000 TL
Companies established before January 1, 2024, with capital below these thresholds, are required to increase their capital by December 31, 2026.
Non-compliance may lead to legal consequences, including potential dissolution procedures under Turkish corporate law.
Foreign investors acquiring shares in existing companies should verify compliance with these requirements during due diligence.
Operational Management
Foreign companies can manage operations in Türkiye through:
- a local representative
- a certified public accountant
- authorized agents via power of attorney
This allows full execution of:
- tax procedures
- trade registry operations
- banking transactions
even without physical presence in Türkiye.
Strategic Considerations for International Entrepreneurs
Foreign investors should take into account:
- accounting compliance creates additional operational costs (CPA services, notarization, translation, consultancy)
- foreign currency transfer requirements directly impact eligibility for tax incentives
- application of TFRS ensures alignment with international reporting standards
- choosing between a subsidiary, branch, or acquisition requires careful comparison of tax and accounting implications
Conclusion
Operating a foreign-owned business in Türkiye in 2026 requires strict adherence to accounting, tax, and reporting regulations aligned with national and international standards.
While the regulatory framework may appear complex, it provides a structured and transparent environment for doing business.
For international entrepreneurs, the key to success lies in:
- building a reliable accounting infrastructure
- ensuring ongoing compliance
- and strategically leveraging available tax incentives
With the right setup and professional support, Türkiye remains a highly attractive and accessible market for foreign investment.