If you’re an entrepreneur, freelancer, or digital nomad, you know the frustration of navigating complex tax systems and state-imposed costs. The search for a business structure that balances simplicity, flexibility, and tax efficiency can feel endless. In this article, we’ll break down the availability and conditions of the Şahıs işletmesi (Sole Proprietorship) in Turkey for 2025, using only the latest, verifiable data—so you can make informed decisions and optimize your fiscal freedom.
Understanding the Şahıs İşletmesi: Turkey’s Sole Proprietorship Status
Turkey offers a straightforward path for individuals to operate as a sole proprietor, known locally as a Şahıs işletmesi. This status is widely used by freelancers, small shop owners, and service providers who want to invoice clients and conduct business without the administrative burden of forming a separate legal entity.
Key Features at a Glance
| Feature | Details (2025) |
|---|---|
| Status Name | Şahıs işletmesi (Sole Proprietorship) |
| Who Can Register? | Any individual citizen |
| Registration Process | Local tax office (Vergi Dairesi) |
| Income Tax Rate | Progressive: 15%–40% (2025) |
| VAT (KDV) Registration Threshold | 150,000 TRY (approx. $4,650) for certain services (2025) |
| Social Security | Mandatory Bağ-Kur contributions |
How to Register a Sole Proprietorship in Turkey: Step-by-Step
Setting up a Şahıs işletmesi is refreshingly simple compared to many jurisdictions. Here’s how you can do it:
- Visit the Local Tax Office (Vergi Dairesi): Registration is handled in person. Bring your identification and proof of address.
- Complete the Application: Fill out the required forms for business registration. The process is designed for individuals and is typically completed within a day.
- Obtain Your Tax Number: This number is essential for invoicing and tax filings.
- Register for VAT (KDV) if Required: If your annual turnover exceeds 150,000 TRY (approx. $4,650), VAT registration becomes mandatory.
- Enroll in Bağ-Kur: Social security contributions are compulsory for sole proprietors.
Pro Tip: Optimize Your Tax Burden
- Track Your Turnover: Staying below the VAT threshold (150,000 TRY / $4,650) can simplify compliance and reduce costs.
- Deductible Expenses: As a sole proprietor, you can deduct legitimate business expenses from your taxable income, lowering your effective tax rate.
- Progressive Tax Planning: With rates ranging from 15% to 40%, careful income planning can help you avoid higher brackets.
Case Example: Freelance Consultant in Istanbul
Consider a freelance consultant earning 120,000 TRY (approx. $3,720) in 2025. They register as a Şahıs işletmesi, remain under the VAT threshold, and deduct 20,000 TRY ($620) in business expenses. Their taxable income is 100,000 TRY ($3,100), taxed at the lower end of the progressive scale. This structure keeps compliance simple and costs predictable.
Mandatory Social Security: Bağ-Kur Contributions
All sole proprietors must contribute to Bağ-Kur, Turkey’s social security system for the self-employed. While this is a non-negotiable state cost, it provides access to health insurance and retirement benefits. Factor this into your calculations when comparing international options.
Summary: Is Turkey’s Sole Proprietorship Right for You?
The Şahıs işletmesi offers a practical, low-barrier entry for individuals seeking to operate independently in Turkey. With a simple registration process, progressive income tax rates (15%–40% in 2025), and a clear VAT threshold (150,000 TRY / $4,650), it’s a favored choice for those who value autonomy and straightforward compliance. However, mandatory social security contributions are a fixed cost to consider.
For more details, consult the official resources:
- Turkish Revenue Administration: Income Tax
- e-Government Portal: Sole Proprietorship Registration
- Official Guide to Sole Proprietorships
- Union of Chambers and Commodity Exchanges of Turkey
Armed with this data-driven overview, you’re better equipped to weigh Turkey’s sole proprietorship against other international options and make the best move for your business and personal freedom in 2025.