Application Steps, Required Documents, Costs, and Sole Proprietorship vs Limited Company Comparison

Starting a business in Turkey is easiest through a sole proprietorship (şahıs şirketi).
It is fast, low-cost, requires minimal paperwork and is ideal for freelancers, small businesses and early-stage entrepreneurs.

This guide explains the full process, required documents, costs, and whether a sole proprietorship or a limited company is more logical for your situation.

1) What Is a Sole Proprietorship?

A sole proprietorship is a business structure where one individual operates under their own name and personal tax ID.

Key characteristics:

• Fast setup

• Minimal bureaucracy

• Low monthly accounting cost

• Tax rate increases progressively with income

It is the simplest legal business form in Turkey.

2) Required Documents for Opening a Sole Proprietorship

As of 2025, most procedures are completed digitally through e-Devlet (Turkey’s online government portal).

You need:

• Personal identification

• Residential address

• Business address (can be your home)

• Business activity code (NACE code)

• Rental contract (only if the business address is a rented property)

No notary required.
No chamber registration required.
No capital requirement.

3) Step-by-Step: How to Open a Sole Proprietorship

Step 1: Log in to e-Devlet

Search:
“İşe Başlama Bildirimi (Gelir İdaresi Başkanlığı)”
(Start of Business Notification)

Step 2: Enter your business address

Home address can be used legally without penalty.

Step 3: Choose your business activity (NACE Code)

Examples:

• Hosting / IT services: 62.xx

• E-commerce: 47.xx

• Marketing: 73.xx

Step 4: The tax office automatically processes your application

Your business becomes active within 15–60 minutes.

Step 5: Assign an accountant

Accounting is legally required.
Monthly fees usually 400–800 TL.

Step 6: Activate e-Invoice / e-Archive

Your accountant will register you in the system.

Total setup time: 1–3 hours.

4) Costs of Opening a Sole Proprietorship in 2025

• Setup: Free (via e-Devlet)

• Monthly accounting: 400–800 TL

• If business address is home: no extra cost

• No capital requirement

• No registry or chamber fees

It is the cheapest way to start a business legally in Turkey.

5) Advantages of a Sole Proprietorship

• Extremely fast setup

• Minimal paperwork

• Low accounting cost

• Best option for small or new businesses

• Eligible for “Young Entrepreneur Tax Exemption”

• Easy closure process

6) Disadvantages of a Sole Proprietorship

• Tax rate increases as your income increases

• Lower credit limits compared to companies

• Lower corporate credibility

• You cannot add partners

7) When Does a Sole Proprietorship Become Insufficient?

You should upgrade to a limited company when:

• Monthly revenue consistently exceeds 100,000 TL

• You need higher credit limits

• You want business partners

• You serve corporate clients who prefer company invoices

At this stage, limited company becomes more logical.

8) Sole Proprietorship vs Limited Company – Clear Comparison

Short answer:

Start with a sole proprietorship, switch to limited company when growing.

For hosting, IT services, and e-commerce:
Sole for the beginning → Limited for scaling.