Commercial and industrial establishment analysis in Turkey: Defining the right strategy before investing

Over the past few decades, Turkey has become one of the main commercial and industrial development platforms at the gateway to Europe. Its geographic position, the size of its domestic market, its industrial capabilities, its integration into international supply chains and its proximity to many regional markets attract new foreign companies every year.

However, when a company decides to move beyond exporting and considers building a lasting local presence, one fundamental question quickly arises: what is the best way to establish a presence in Turkey?

Creating a subsidiary in Turkey, relying on a local partner, setting up a joint venture, acquiring an existing Turkish company, opening a commercial office or investing in an industrial site do not produce the same results. Each option has its own advantages, constraints, costs and level of control.

A commercial and industrial establishment analysis in Turkey makes it possible to compare these different options, assess their relevance and structure the project before any operational or financial commitment is made.

Why prepare your establishment strategy in Turkey before creating a structure?

Many companies view the creation of a company in Turkey as a simple administrative formality. In reality, the choice of establishment model has a major impact on the success of the project. Before creating a subsidiary in Turkey or committing to an investment, it is essential to determine which market entry strategy is genuinely suited to the company’s objectives.

In some cases, a local distributor or commercial partner may be an effective way to develop the business quickly. In other situations, creating a Turkish subsidiary becomes necessary in order to better control customer relationships, sales teams, operations or financial flows. Some companies choose a joint venture in Turkey to accelerate their development through a local partner, while others consider an acquisition in order to benefit immediately from an existing organisation. An establishment analysis therefore makes it possible to carry out a detailed benchmark of the different market entry models in Turkey, assess the advantages and limitations of each scenario, analyse the risks associated with each option and measure the level of control, dependency and exposure they involve.

The objective is not simply to choose a legal structure. It is to define the most appropriate establishment strategy in Turkey according to the project, the sector, the resources available and the company’s development ambitions.

Structuring a commercial establishment project in Turkey

A successful establishment project depends on thorough preparation of the company’s future organisation. Before creating any structure, it is necessary to assess the requirements linked to the activity: regulatory constraints, sector-specific obligations, human and organisational prerequisites, requirements related to the products or services offered and any location-related constraints.

This phase also makes it possible to define the legal form best suited to the project. Depending on the company’s objectives, several options may be considered, including a limited liability company, known locally as a Ltd. Şti., a joint stock company, known as an A.Ş., a branch, a liaison office or other specific legal structures. The analysis provides guidance on the most appropriate legal forms, helps structure the shareholding, define the governance and management model, clarify local responsibilities and anticipate the legal and operational implications of the project. It also helps define the human resources required according to the prerequisites of the sector concerned: local management, sales functions, administrative support, technical resources, production teams or industrial supervision.

For senior executives, this reflection often forms the foundation of the future organisation in Turkey. It also includes a detailed presentation of the incorporation procedure, administrative timelines, incorporation costs and the main legal obligations associated with operating a Turkish company.

Assessing costs, taxation and required resources in Turkey

One of the main challenges of an establishment project is to properly assess the resources required for its success. The cost of creating a company in Turkey generally represents only a limited part of the overall investment. Operating costs, human resources, commercial investments, administrative expenses and the financial resources required to scale the activity must also be anticipated.

An establishment analysis makes it possible to assess the minimum CAPEX and OPEX budgets required, estimate recommended investments and provide guidance on the minimum capital advisable to support the project under realistic conditions. It also analyses market entry and operating costs, identifies the main taxes applicable in Turkey, clarifies the Turkish tax framework relevant to the planned activity and assesses the financial impact of the different establishment scenarios. Tax and invoicing flows are also a central issue. Particular attention should be paid to the structuring of intra-group flows, local flows, invoicing mechanisms, dividend repatriation and the overall financial organisation of the project.

The analysis also integrates elements relating to Turkish labour law, local salary practices, employment costs, social security obligations and the human resources required to operate the future structure.

Succeeding in an industrial establishment project in Turkey

For industrial companies, the issues go far beyond the simple creation of a company. An industrial establishment project in Turkey involves a number of structuring decisions that will have a direct impact on the future profitability of the project.

Before making any industrial investment decision in Turkey, it is essential to assess the feasibility conditions of the project, the technical constraints, regulatory requirements, human resource needs and logistics implications associated with the future activity. The choice of location is often one of the most decisive factors. An upstream industrial establishment analysis makes it possible to compare different regions of Turkey and assess organised industrial zones, free zones, specialised industrial ecosystems, proximity to suppliers, customers, logistics infrastructure, ports, transport corridors and labour pools. This analysis also examines the availability of industrial land, existing buildings, energy infrastructure, industrial services and access to qualified human resources.

Industrial costs are another major consideration. Industrial wages in Turkey, labour availability, energy costs, logistics costs, construction or rental costs, the availability of subcontractors and the maturity level of the local industrial ecosystem must all be assessed before any decision is made.

A successful industrial establishment project therefore depends on a balanced combination of operational constraints, strategic objectives, investment costs and long-term development potential.

Investment incentives and establishment advantages in Turkey

Turkey has a number of mechanisms designed to encourage foreign investment and industrial projects. Depending on the nature of the project, its sector, its technology level and its location, different investment support schemes may be available.

Turkish free zones, organised industrial zones, investment incentive schemes, certain tax exemptions, employment support mechanisms and specific incentives for strategic industrial projects can significantly improve the economic balance of a project.

A preliminary analysis makes it possible to identify the relevant schemes, assess their potential impact and integrate them into the overall establishment strategy.

Advantis supports companies with commercial and industrial establishment projects in Turkey

For more than twenty years, Advantis has carried out commercial and industrial establishment analyses in Turkey for SMEs, mid-sized companies, industrial groups, large corporations, investors and international businesses seeking to create a subsidiary, develop a commercial activity, launch an industrial investment or structure a long-term presence in the Turkish market.

Our analyses help define the most appropriate establishment strategy in Turkey, compare different market entry models, assess suitable legal structures, analyse investment and operating costs, secure tax and operational flows, identify the most relevant locations and evaluate the feasibility conditions of a commercial or industrial project.

Our objective is to provide business owners, export directors, business development managers and investors with a clear and practical understanding of the different establishment options in Turkey, enabling them to secure their decisions, optimise their investments and define the development model best suited to their objectives.