Why European Startups Are Eyeing Turkey for Expansion

Jan de Vries · 2026-09-21

Turkey has long been a vital commercial bridge between Europe, Asia, and the Middle East. For European companies looking to expand beyond their home markets, Turkey offers access to a large domestic economy, established manufacturing capabilities, international trade routes, and a strategically positioned business environment. But expanding into Turkey isn't just about spotting a market opportunity. You also need to think about the right legal structure, taxation, accounting, employment, banking, and ongoing compliance before you start operations. For European businesses considering Turkey as their next international market, understanding these practical issues early on can make the expansion process more structured and predictable. ### Why Are European Companies Expanding into Turkey? Turkey's geographical position makes it relevant for companies with operations across Europe, the Middle East, and surrounding markets. European businesses may consider Turkey for various reasons, including: - Establishing a local sales operation - Manufacturing and production - Import and export activities - E-commerce - Technology and software services - Regional headquarters - Logistics and distribution - Professional and business services The right approach depends heavily on your business model. A company that only sells products to Turkish customers may have different requirements than one setting up employees, warehouses, manufacturing facilities, or a fully operational subsidiary. That's why market-entry planning should begin with a clear understanding of what you actually intend to do in Turkey. ### Establishing a Legal Presence in Turkey One of the first decisions for a European company is whether it needs a Turkish legal entity. Depending on the business model, you might consider a subsidiary, branch, or, in limited circumstances, a liaison office. A Turkish subsidiary can provide a separate legal structure through which the foreign parent company conducts local business activities. The most common corporate structures include the Limited Liability Company and Joint Stock Company. The appropriate structure depends on factors such as: - Number of shareholders - Investment size - Planned activities - Financing requirements - Future expansion - Management structure - Employment plans European companies planning to establish a local entity can review resources on company registration in Turkey for an overview of the registration process and the main requirements for foreign investors. ### Choosing Between a Subsidiary and a Branch A foreign company doesn't necessarily have to establish a Turkish subsidiary in every situation. A branch can be considered when the parent company wants to conduct business in Turkey as an extension of the foreign entity. A subsidiary, on the other hand, is a separate Turkish legal entity and may provide a more appropriate structure for companies planning long-term commercial operations. The decision should be based on your intended activities rather than simply on the perceived simplicity of one structure. Companies should consider the legal, tax, accounting, and operational consequences of each option before making the decision. ### Taxation for European Companies Operating in Turkey Tax is a big consideration when expanding into a new jurisdiction. A Turkish company can be subject to several different taxes depending on its activities and transactions. These may include: - Corporate income tax - Value Added Tax (VAT) - Withholding tax - Payroll-related taxes - Social security contributions - Customs duties - Other transaction-specific taxes Your company's tax position will depend on the nature of its business and the transactions it carries out. European parent companies should also consider the interaction between Turkish domestic tax rules and international tax arrangements, particularly where double taxation treaties apply. > "Expanding into Turkey can be a game-changer for European startups, but it's crucial to get the legal and tax framework right from the start." – Jan de Vries, E-commerce Consultant ### Key Takeaways for European Startups Expanding into Turkey offers significant opportunities, but it requires careful planning. By understanding the legal, tax, and operational landscape, European startups can position themselves for success in this dynamic market. Start by defining your business goals, then choose the right legal structure, and ensure compliance with local regulations. With the right approach, Turkey can become a valuable part of your growth strategy.