Incorporating a Crypto Currency Exchange Company in Turkey

Crypto Currency Exchange Company in Turkey

Establish a Crypto Currency Exchange Company in Turkey

According to the research conducted by the World Economic Forum based on the number of users included in the crypto money ecosystem, Turkey is ranked fourth in the world and first in Europe.

We would like to share some information about the incorporating of a Crypto Currency Exchange Company and the necessary permission for investors who wish to invest in Turkey, which is one of the top countries in the crypto market.

Crypto Currency Exchange Permission and License

It was announced in 2021 that the government was preparing a legal regulation for Crypto Currency Exchange companies and for those companies that wish to operate in Crypto Currency-related segments. And some steps have been initiated for this matter.  The most important issue enacted in this regard is that crypto money exchange companies may only receive and send money through banks, and no legal payment can be made via crypto money.

Before April 2021, Turkish Crypto Currency companies could also receive and make payments through intermediary institutions besides banks. With the new regulation enacted, companies started to make transactions only via banks.

Although preparations are expected on the incorporation and regulations of companies, there are no legal restrictions on the incorporation of crypto money exchanges as of today, and the incorporation of a crypto money exchange company is no different from founding a company during the incorporation phase.

Crypto Currency Exchange Company Incorporation Before Regulation

Based on our previous experience on the regulations introduced on the same subjects in Turkey, some rights are granted to those companies incorporated before the regulations have been issued  Those companies operating before such regulation(s) were given a certain period of time, thus enabling them to adapt their companies to the regulations and to continue their activities during such process. Therefore, it would be beneficial for you to establish your company before the regulation has been enacted if you are planning to invest in a crypto money company in Turkey.

The expected outline of such legal regulation to be issued in the near future to specify requirements for competency and necessary permission before incorporation are, mainly, that companies shall establish companies with a certain amount of capital, company names shall be arranged in accordance with such work to be engaged with, and these companies shall be incorporated as a joint stock company, that they shall also have competent technical personnel, competent infrastructure and reporting system for crypto currency exchange transactions.

Reviewing such regulations prepared on similar matters, we expect one of the provision of such regulation is to be that a joint stock company shall be incorporated.  Therefore, we recommend you choose a joint stock company for incorporation in order not to waste time on changing the status of the company processes later.

Joint stock companies can be founded with at least one partner and their partners can be either real persons or legal persons. Partners do not necessarily have to reside in Turkey. We will request different documents depending on the status of the person i.e., either a natural person or a legal person for incorporation process. Such documents requested must be Apostille-approved and Notary-approved for their respective Turkish translations. You can contact us about the required documents.

In joint stock companies, ¼ of the company capital must be blocked in the bank before the company has been incorporated. Such blocked money will be released after the company has been founded and you will then be able to use this money for company expenses.

The minimum capital in joint stock companies is TRY 50,000. Our recommendation at this stage is to keep your capital as high as possible. There are two main reasons for this: the first one is the preparation for the regulation to be issued in the near future, and the second and most importantly, your relationship with the banks.  Turkish banks are not very keen on working with Crypto Currency Exchange companies. Therefore, you need to make such moves indicating that you really want to do this job and that you are a good investor in order to gain the trust of banks.  The most important step among these is to have a high capital. To set an example for you, we will share the capital amounts of some Crypto Currency Exchange companies operating in Turkey.

Trade Mark Company Name Capital
BTCTURK ELIPTIK YAZILIM VE TICARET AS ₺100.000.000,00
BITCI BITCITEKNOLOJI AS ₺100.000.000,00
ICRYPEX ICRYPEX BILISIM ANONİM SIRKETI ₺50.000.000,00
PARİBU PARİBU TEKNOLOJI AS ₺40.000.000,00
ALBCOİN TRADER TECHNOLOGY BILGI VE ILETISIM HIZMETLERI AS ₺30.000.000,00
BİTEXEN BITEXEN TEKNOLOJI AS ₺25.000.000,00
FELIXO FELIXO TEKNOLOJI VE YAZILIM AS ₺10.000.000,00
BİNANCE TR BN TEKNOLOJİ AS ₺7.000.000,00
BITLO BITLO TEKNOLOJI AS ₺5.000.000,00
BİTTURK BITTURK BILISIM VE TICARET AS ₺5.000.000,00
COINTRAL BLOCKCHAIN LAB YAZILIM AS ₺5.000.000,00
NARKASA NARKASA YAZILIM TICARET AS ₺5.000.000,00
KOINIM KOINIM BILISIM AS ₺2.000.000,00
TOMYA TOMYA TEKNOLOJI AS ₺1.000.000,00

Note: Such information is publicly available and it is taken from the records dated September 12, 2021.

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Company incorporation processes take an average of one week, and after incorporation, you can start operating as a Crypto Currency Exchange.

Taxation on Crypto Currency Exchange Companies

Currently, Crypto Currency exchanges pay VAT and profit tax on the commissions they receive on buy-sell trading. They pay VAT taxes monthly and income taxes quarterly. You can contact us to get information about company incorporation, post-incorporation transactions and post-regulation consultancy.