Setting up a sole proprietorship in Türkiye can be completed in just a few steps. However, if your business activity, NACE code, and tax structure are not planned correctly from the beginning, you may lose valuable tax incentives and incur unnecessary tax costs.
How to Establish a Sole Proprietorship in Türkiye
If you are a software developer, designer, consultant, e-commerce entrepreneur, or freelancer providing services to international clients, one of your first questions is probably:
"How do I set up a sole proprietorship in Türkiye?"
There are hundreds of online guides explaining the registration process. However, most of them only list the required documents and fail to explain the ongoing tax obligations and important planning decisions that follow.
A poorly structured business registration may result in losing valuable tax incentives or paying more tax than necessary.
This guide explains the process step by step.
What Is a Sole Proprietorship?
A sole proprietorship is the simplest form of business in Türkiye. It is owned by a single individual, and all business activities are carried out in the owner's name.
This structure is particularly popular among:
Software developers
Freelancers
Graphic designers
Digital marketing specialists
Architects
Engineers
Consultants
Content creators
E-commerce sellers
Who Should Establish a Sole Proprietorship?
A sole proprietorship is generally suitable for:
New entrepreneurs
Independent professionals
Freelancers serving international clients
Remote software developers
Consultants
As your business grows, it is possible to convert your business into a Limited Liability Company (Ltd.) or a Joint Stock Company (A.Ş.).
Documents Required
In practice, a sole proprietorship can usually be established online through the Digital Tax Office (Dijital Vergi Dairesi) using your e-Government credentials.
Depending on the circumstances, you may generally need:
Identification information
Residential address
Business address (home office is acceptable)
Lease agreement or title deed information
Description of business activities
Appropriate NACE code
Tax office registration details
Power of attorney for your Certified Public Accountant (CPA)
Selecting the correct business activity and NACE code is extremely important, as it may affect your eligibility for future tax incentives.
Step-by-Step Company Formation Process
1. Determine Your Business Activity
The first step is selecting the business activity that accurately reflects the services you provide.
Choosing the wrong activity may prevent you from benefiting from valuable tax incentives, including those available for exported services.
2. Determine Your Business Address
Your business may operate from:
Your home (home office)
A rented office
A serviced office
A virtual office
Depending on your business model, the chosen address may have different tax implications.
3. Apply Through the Tax Office
Your application is submitted electronically through the Digital Tax Office system.
A business commencement declaration is prepared and submitted online.
4. Obtain Your Tax Registration Certificate
Once your registration is completed, your tax certificate is issued.
At this point, you may begin issuing invoices and legally conducting business activities.
5. Tax Office Inspection
After your application, a tax officer will generally visit your declared business address within approximately seven days.
Applicants are usually notified by SMS before the inspection.
To complete the inspection successfully, either the business owner or an authorized representative with a notarized power of attorney should be present. You should also have your identification document and lease agreement available if requested.
6. Electronic Accounting and E-Document Systems
Depending on your business activities, you may become subject to obligations such as:
e-Invoicee-Archive Invoicee-LedgerFor this reason, planning your digital accounting infrastructure during the establishment process is highly recommended.
Can You Establish a Home Office Sole Proprietorship?
Yes.
Software developers, freelancers, consultants, and designers commonly register their businesses using their home address.
Under certain conditions, some home office expenses may also qualify as deductible business expenses.
Ongoing Tax Obligations
Registering your business is only the first step.
After establishment, you will generally be responsible for:
Working with a licensed Certified Public Accountant (CPA/SMMM)Issuing invoices
Maintaining accounting records
Filing VAT returns
Filing withholding tax returns (where applicable)
Filing annual income tax returns
Filing provisional tax returns (where applicable)
Completing social security (Bağ-Kur) registration and compliance
Additional Planning for Businesses Serving International Clients
Businesses providing services abroad often require additional tax planning.
Even a small mistake during company formation may prevent you from benefiting from valuable tax incentives such as the Export of Services Tax Deduction or VAT exemptions.
For this reason, properly structuring your business is often more important than simply registering it.
Conclusion
Establishing a sole proprietorship in Türkiye is a relatively quick and straightforward process.
However, choosing the correct business activity, selecting the appropriate NACE code, and implementing the right tax structure from the beginning are essential.
For software developers, designers, engineers, consultants, and other professionals serving international clients, mistakes made during the establishment stage may result in significant tax costs in the future.
Before establishing your business, it is important to evaluate your business model, client structure, and available tax incentives together to ensure the most efficient tax planning.
If you have any questions or would like professional assistance regarding company formation or taxation in Türkiye, please feel free to contact us at info@nova360.org.tr or through our WhatsApp support line.
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