[ESTABLISHING A BUSINESS ENTITY IN TURKEY] 492
• extraordinary general assembly meeting to be convened, or that a time to the agenda of the general assembly meeting to be added, • postponement of balance sheet discussions for one month to have a chance to review the balance sheet in detail, • independent auditor to be appointed or replaced, • under circumstances requesting dissolution of the anonim sirket by filing a lawsuit, Minority shareholders may also be granted the right of being represented in the board of directors by the articles of association. Apart from the rights mentioned above, meeting and decision quorums also have an impact on minority rights. For instance, the consent of at least 75% of shareholders of anonim sirket are required to change the scope of the company. D. Foreign Investment, Thin Capitalization, Residency and Material Visa Restrictions • Barriers to Entry for An Offshore Party All the procedures for incorporating foreign- invested companies are the same as with local companies. The national treatment principle is applicable by all means. Therefore, there are no significant barriers to entry for an offshore party. • Thin Capitalization According to Corporate Income Tax Law, if the total of the borrowings of a corporation, which are obtained directly or indirectly from its shareholders or persons to the shareholders and used in the business, exceeds three times the equity capital of the corporation at any time within the fiscal year, the excess part of the borrowings will be considered as thin capital for the relevant
fiscal year. However, borrowings such as loans borrowed by banks or from third parties based on non-cash guarantees provided by the shareholders or persons related to the shareholders are not deemed to be thin capital. • Capitalization Obligation The incorporation of a company requires the minimum capital as stipulated in the TCC. Accordingly, the minimum capital amount required for an anonim sirket is TL 50,000 (approx. EUR 1,676) while TL 10,000 (approx. EUR 335) is for a limited sirket . For anonim sirket , if the shares are stipulated in cash, at least 25% of the related capital should be paid during the registration process and the unpaid amount should be paid within 24 months after registration. For limited sirket, payment during the registration process is not required, 100% of the shares should be paid within 24 months after registration. Assets including intellectual property rights may be contributed as capital in-kind provided that those assets are transferable and eligible for valuation in cash. • Special Business or Investment Visa Issues Due to the national treatment principle, foreign investments are not subject to pre- entry screening requirements or additional approvals and authorizations. However, the companies operating in certain commercial activities determined by the TCC should obtain permission from the General Directorate of Domestic Trade for the incorporation of companies such as banks, private finance institutions, insurance companies, financial leasing companies, factoring companies, holding companies, companies operating as foreign currency exchange offices, companies dealing with public warehousing, publicly held companies
ILN Corporate Group – Establishing a Business Entity Series
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