Şahıs Şirketi vs. LLC for Foreign Freelancers
Setting up a business in Türkiye as a foreign freelancer or remote contractor typically comes down to two structures: a Sole Proprietorship (Şahıs Şirketi) or a Limited Liability Company (Limited Şirket).
The detail most guides skip: registering a Şahıs Şirketi is not, by itself, enough to make self-employment lawful for a foreigner. You need actual work authorization — an independent work permit, a long-term residence permit that carries work rights, a Turquoise Card, or a status-based route like marriage to a Turkish citizen. A plain short-term residence permit (e-İkamet) does not grant that authorization on its own. This is why many foreign founders without long-term residency start with an LLC instead, which has defined, capital-based criteria rather than a discretionary work-permit assessment.
See our residence permit guide if you haven't sorted your status yet, and our tax number guide for the registration step both structures require.
Sole proprietorship setup
1–3 days, no minimum capital
LLC minimum capital
50,000 TRY
Service-export deduction
100% for both structures
Structure Comparison
Best for
- Sole Proprietorship (Şahıs Şirketi)
- Solo freelancers, remote contractors, IT professionals already authorized to work in Türkiye
- Limited Liability Company (Limited Şirket)
- Foreign founders without long-term residency, agencies, businesses with partners, companies seeking investment
Setup cost & speed
- Sole Proprietorship (Şahıs Şirketi)
- Very low cost; can be established in 1–3 days
- Limited Liability Company (Limited Şirket)
- Higher setup cost — notary fees, Trade Registry, ~30 days
Minimum capital
- Sole Proprietorship (Şahıs Şirketi)
- None
- Limited Liability Company (Limited Şirket)
- 50,000 TRY
Personal liability
- Sole Proprietorship (Şahıs Şirketi)
- Unlimited — you're personally liable for business debts
- Limited Liability Company (Limited Şirket)
- Limited to the company's capital
Income tax system
- Sole Proprietorship (Şahıs Şirketi)
- Individual progressive scale (15%–40%) on net profit
- Limited Liability Company (Limited Şirket)
- Corporate tax plus dividend withholding tax on distributions
Service-export deduction
- Sole Proprietorship (Şahıs Şirketi)
- 100% under Income Tax Law Art. 89/13
- Limited Liability Company (Limited Şirket)
- 100% under Corporate Tax Law Art. 10/1-ğ (still subject to the domestic minimum corporate tax)
Social security
- Sole Proprietorship (Şahıs Şirketi)
- Mandatory self-employed Bağ-Kur, ~11,800 TRY/month at the minimum base
- Limited Liability Company (Limited Şirket)
- Managed under corporate employer/SGK payroll rules
| Feature | Sole Proprietorship (Şahıs Şirketi) | Limited Liability Company (Limited Şirket) |
|---|---|---|
| Best for | Solo freelancers, remote contractors, IT professionals already authorized to work in Türkiye | Foreign founders without long-term residency, agencies, businesses with partners, companies seeking investment |
| Setup cost & speed | Very low cost; can be established in 1–3 days | Higher setup cost — notary fees, Trade Registry, ~30 days |
| Minimum capital | None | 50,000 TRY |
| Personal liability | Unlimited — you're personally liable for business debts | Limited to the company's capital |
| Income tax system | Individual progressive scale (15%–40%) on net profit | Corporate tax plus dividend withholding tax on distributions |
| Service-export deduction | 100% under Income Tax Law Art. 89/13 | 100% under Corporate Tax Law Art. 10/1-ğ (still subject to the domestic minimum corporate tax) |
| Social security | Mandatory self-employed Bağ-Kur, ~11,800 TRY/month at the minimum base | Managed under corporate employer/SGK payroll rules |
Both Structures Can Use the 100% Service-Export Deduction
Whichever structure you pick, Türkiye's service-export incentive is what actually makes freelancing here tax-efficient — see our full freelancer tax guide for the complete conditions.
Effective outcome
If you provide a qualifying service (software development, engineering, design, architecture, data processing, accounting, and similar) from Türkiye to non-resident foreign clients, qualifying net profit gets a 100% deduction — effectively bringing personal income tax on that export income to 0% for a sole proprietor. For a Limited Şirket, the domestic minimum corporate tax can still apply on top, so the effective savings are smaller than for a sole proprietor.
Conditions that apply either way
Invoices must be issued directly to the non-resident foreign client; the service must be performed in Türkiye but consumed/used abroad; and the foreign-currency earnings must be transferred into Türkiye by the annual tax return deadline.
Which One Should You Actually Pick?
- If you don't yet have work authorization in Türkiye (not just any residence permit, but one of the specific work-eligible routes), an LLC is the accessible starting point — it has no residency precondition
- If you already have work authorization and want the simplest, cheapest structure with no capital requirement, a sole proprietorship is faster to set up and run
- Choose a Şahıs Şirketi if you're a solo, laptop-based freelancer who wants the lowest possible overhead — combined with the export deduction, your main fixed cost becomes Bağ-Kur
- Choose a Limited Şirket if you plan to hire employees, sign with enterprise clients who require a corporate entity, or want to retain capital in the business instead of withdrawing it all as personal income
- Either way, hire a licensed Turkish accountant (SMMM) early — Turkish tax registration and compliance is not something to DIY from scratch
Step-by-Step Setup
- 1
Get your tax credentials and civil numbers
- Secure a Foreigner ID Number (YKN, starting with 98 or 99) and activate your national e-Devlet access.
- 2
Hire a licensed CPA (SMMM)
- Turkish business accounting and tax filings must legally run through a licensed Serbest Muhasebeci Mali Müşavir — get one involved before you register, not after.
- 3
Register a business address
- A physical office or an approved virtual office (Sanal Ofis) is required for tax authority registration.
- 4
Set up electronic invoicing (e-Fatura)
- Configure e-invoicing with your CPA so you can invoice foreign clients correctly and document the qualifying foreign-currency bank transfers the export deduction depends on.
- 5
Register for social security
- Sole proprietors: enroll in self-employed Bağ-Kur at registration. LLC founders: social security for any employees (including yourself, if salaried) runs through the company's SGK payroll.
Frequently Asked Questions
Sources
- Corporate Tax Law Art. 10/1-ğ and Income Tax Law Art. 89/13 — service-export deduction
- Minimum capital requirement for Turkish limited companies, 2026 — www.asylegal.com/minimum-capital-requirements-in-turkey-2026
- Work authorization requirements for foreign sole proprietors in Türkiye — www.duralhukuk.com/blog-detail/sole-proprietorship-turkey-foreigners
Not Sure Which Structure Fits Your Situation?
The right choice depends on your current residency and work-authorization status, not just which structure sounds simpler. Our concierge team can connect you with an SMMM who works with foreign freelancers specifically.
Talk to Our Team