ESTABLISH A FOUNDATION AND ASSOCIATION IN TURKEY
ESTABLISHING A FOUNDATION AND ASSOCIATION IN TURKEY AND REGISTER NON PROFIT ORGANISATION IN TURKEY
The non-profit organizations in Turkey are established as foundations and association and are governed by the “Law for Foundations” “ Vakıflar Kanunu “ and the “Associations Act.” “Dernekler Kanunu” in Turkish.
The law on associations has been published in the Official Gazette in Turkey on 23 November 2004. The purpose of the law on associations is to regulate illegal and subject to permission acts, liabilities, auditing, punishments and other issues of the nonprofit organizations regarding opening a branch in Turkey apart from representations and branches of associations, federations, confederations, foreign associations whose headquarters are at abroad.
Under Turkish law, an association is a non-profit organization established to carry out a specific or common objective, without the intention of earning or sharing profit by its members.
All associations in Turkey are registered with the Department of Associations at Governorship of City under the Republic of Turkey’s Ministry of the Interior. The function of the Department of Associations is primarily to make the procedures for creating, registering, and maintaining associations more efficient and cost-effective. To this end, the Information System of Associations (“Derbis”) has been initiated by the Department of Associations to enable the directors of associations to submit declarations and notifications on-line without having to physically visit the Provincial Directorates of Associations. Accordingly, all formal/regulatory procedures of associations may be implemented by using e-signature through DERBIS system which is an infrastructural enhancements within e- registration .
Foreign and local investors are not invited to open just companies in Turkey, but also other types of entities, such as association ( Dernek, ), cooperatives, and even foundations, ( Vakif) also referred to as non-profit organisations or associations. Speaking of foundations, foreign ones are also allowed to open representative or branch offices in Turkey by registering with them with the Department of Associations within the Ministry of Interior.
When it comes to the opening of a foundation in Turkey, the main law to comply with is the Foundations Law which was enabled in 2008. The lawyers and consultants at Kaya & Partner can offer more information on Turkish Foundation and Association law and formation of these types of organisations as well as companies formation in Turkey.
Types Of Foundations Which Can Be Set Up In Turkey
Local and foreign investors can open two types of foundations in Turkey:
- – private foundations;
- – state foundations.
The main difference between the two types of entities is that state foundations are considered governmental entities, while private NGOs can be set up by locals or foreign citizens living in Turkey. Private individuals can open Turkish foundations which are based on the assets held by the settlors and associations which are based on the members setting them up.
How To Establish A Foundation In Turkey ?
No matter the type of foundation one decides to establish in Turkey, the first step is to make a clear distinction between the settlor or settlors, the trustee and the beneficiaries. Once these elements are in place, a minimum capital of 200,000 USD must be deposited with a Turkish bank. The maximum amount to be deposited in order to open a foundation in Turkey is 400,000 USD. Following that, a notarial agreement through which the foundation is established will be drafted. The foundation must be registered with the Department of Associations.
Turkish foundations must have experienced financial managers and are also required to keep their assets in cash in state-owned banks.
Foundations in Turkey benefit from various tax deductions and other fiscal facilities. Our Turkish company formation advisors can offer information on these tax facilities. Please contact us if you want to open a foundation or an association in Turkey.
Types of Business Legal Entities Compere to Foundation in Turkey
Foreign enterprisers and companies are allowed to create various types of businesses in Turkey. From structures which can be registered in other countries to business forms which are particularly found in Turkey, the local legislation provides for an environment which favors foreign investments. However, the Turkish legal framework also enables companies and individuals to create organizations for non-profit purposes. The law governing the establishment of non-profit organizations (NGOs) is the Foundations Law . The Foundations Law offers the definition and the requirements for establishing a foundation or an association in Turkey. Our lawyers in Turkey can offer information on the Foundations Act.
Turkish Foundations According to The Law
The Turkish law acknowledges two main types of foundations: private and state-owned ones. However, depending on who establishes them and what their purpose is, Turkish associations are further divided into:
- asset-based foundations;
- member-based foundation;
- foundations set up for raising funds;
- family-sponsored foundations;
- company-sponsored foundations.
Requirements to set up a foundation in Turkey
First of all, an individual or a Turkish company will need a minimum amount of 200,000 USD, while the maximum amount accepted is 400,000 USD to set up a foundation. The money must be kept in Turkish banks owned by the state, while the managers of the foundations must have financial qualifications.
How To Set Up A Foundation In Turkey And Constitution of Foundation
No matter who opens the Turkish foundation, an agreement (Articles of Foundation as know as Tüzük in Turkish) which will be signed before a public notary will be drafted. Then the foundation will be entered into the Department of Associations’ evidence by filing the foundation deed.
Foreign NGOs are also allowed to set up operations in Turkey under the form of branch or representative offices. They will need a permission from the Department of Associations in order to become operational.
For information on the requirements related to setting up an association in Turkey, please contact us . You can also rely on our Turkish lawyers if you want to open a company in this country.
Kaya & Partner Hukuki Danışmanlık
Lawyers – Rechtsberatung
Istanbul / Turkey