A foreign national who wants to work for themselves in Türkiye — a consultant, a designer, a tradesperson, a small retailer — asks whether they can simply register as a sole trader rather than forming a company. The answer is yes in principle and considerably harder in practice than forming a limited company, for a reason that surprises people: the difficulty is not the business registration but the work authorisation behind it.
What a sole proprietorship is
A sole proprietorship (şahıs şirketi in common usage, more precisely an individual enterprise) is not a separate legal person. The individual carries on business in their own name, holds a tax registration, issues invoices, and is personally liable for everything the business does.
Its attractions are real: minimal formation cost, no minimum capital, simple accounting, and — depending on income level and category — a tax regime that can be lighter than corporate taxation for a small business.
Its central drawback is equally real: unlimited personal liability. A commercial claim against the business is a claim against the individual's personal assets. There is no corporate veil, because there is no company.
The authorisation problem
Here is where the analysis diverges from what most foreign nationals expect.
Working in Türkiye requires authorisation. An employee obtains a work permit through an employer; a company shareholder-manager obtains one through the company. A sole trader has no employer and no company — so the permit must come from somewhere else.
The routes that make self-employment possible are, in practice:
- An independent work permit. Law No. 6735 provides for independent work permits for foreign nationals meeting the conditions determined in the legislation, which include a period of lawful residence in Türkiye and assessment against criteria concerning the person's education, professional experience, contribution to the economy and the activity proposed. This is a selective route rather than a routine registration.
- An indefinite work permit, held after eight years of lawful work permits, which permits working without an employer.
- A long-term residence permit, which carries broad work rights.
- A Turquoise Card, which carries indefinite work rights without a sponsor.
- Status-based routes, including for spouses of Turkish citizens living in family union.
Without one of these, registering a sole proprietorship does not make self-employment lawful. The tax registration and the work authorisation are separate questions, and satisfying the first does not answer the second.
Why a company is often the easier route
The paradox is that forming a limited or joint stock company — which sounds heavier — is frequently the more accessible path for a foreign national who wants to work for themselves.
A company can employ its foreign shareholder as manager and apply for a work permit on their behalf. The application is assessed against known criteria: paid-in capital of at least TRY 100,000 for a new company, the five Turkish employee requirement applied over the latter part of the first permit year, or a shareholding of USD 100,000 or more potentially taking the application outside the standard employment requirement.
Those criteria are demanding, and they are criteria — a business that meets them obtains the permit. Independent work permits are assessed more discretionarily.
A company also brings limited liability, which for any business with real exposure is worth more than the administrative simplicity of a sole proprietorship.
Comparing the options
| Sole proprietorship | Limited company | Joint stock company | |
|---|---|---|---|
| Separate legal person | No | Yes | Yes |
| Personal liability | Unlimited | Capital, plus public debts pro rata | Capital; non-director shareholders shielded |
| Minimum capital | None | TRY 50,000 | TRY 250,000 |
| Formation cost | Low | Moderate | Moderate to high |
| Work authorisation route | Independent permit or status-based | Company applies for shareholder-manager | Same, or board exemption if resident abroad |
| Accounting | Simple | Full | Full |
| Credibility with counterparties | Lower | Higher | Highest |
Tax
A sole trader is taxed on business profits under the income tax regime, at progressive rates, with obligations that include periodic VAT and withholding declarations and an annual return. Depending on the category and turnover, simplified bookkeeping may apply.
A company is subject to corporate tax on its profits, with dividends taxed on distribution. Which produces a lower overall burden depends on income level, drawings and expenses, and it is a calculation rather than a rule — take advice on the specific numbers rather than assuming that one form is cheaper.
Social security also differs: a sole trader is subject to self-employed contributions; a shareholder-manager's position depends on the company form and their role.
Registration steps, once authorisation exists
- Tax identification number, if not already held.
- Registration with the tax office, including a premises inspection.
- Registration with the relevant chamber, where required by the activity.
- Social security registration as self-employed.
- Accounting arrangements — a licensed accountant, and e-invoice or e-ledger registration where thresholds apply.
- Any sector-specific licences.
The registration itself is quick. It is the step before it that determines whether it is available.
The risk of getting this wrong
A foreign national who trades without authorisation faces administrative fines, a restriction code affecting future residence, work and citizenship applications, and possible removal. The record is the durable cost.
This catches freelancers in particular — people working online for foreign clients while living in Türkiye, who assume that because the clients are abroad the activity is unregulated. The position of remote work under the current framework is genuinely unsettled rather than clearly permitted, and it should be assessed on the specific arrangement rather than assumed.
Frequently asked questions
Can a foreign national register a sole proprietorship? In principle yes, but lawful self-employment requires work authorisation.
What is an independent work permit? A permit allowing a foreign national to work on their own account, subject to conditions including a period of lawful residence and an assessment of the proposed activity.
Is a company easier? Frequently, because the work permit criteria for a company are defined and meetable.
Am I personally liable? In a sole proprietorship, entirely.
Can I convert to a company later? Yes; the business is transferred to a newly formed company, with tax and contractual consequences to plan for.
Does marriage to a Turkish citizen change the position? Yes — spouses living in family union are treated differently for work authorisation.
Can I freelance for foreign clients while living here? Unsettled. Take advice on your specific arrangement.
Choosing the right vehicle
For most foreign nationals wanting to work for themselves in Türkiye, the honest recommendation is a company — not because the sole proprietorship is unavailable, but because the route to lawful self-employment through it is narrower, and because unlimited liability is a poor trade for administrative simplicity.
Dural Hukuk advises on work authorisation routes for self-employment, forms companies where that is the better vehicle, and handles work permit applications. Call +90 535 260 74 54 or use the contact form on this site.
This article is general information on Turkish law as at August 2026 and is not legal or tax advice. Criteria change and the position on remote work is unsettled; obtain advice on your own circumstances.