This article explains How to Open a Trust in Turkey in details. Trusts are a handy tool when managing your affairs in many countries. And the scene is the same when it comes to Turkey. These trusts are beneficial for both native Turks and foreign investors. They can prove to be a real asset when you are your inheritance.
The Turkish Civil Code will offer you numerous ways to protect your assets. Among these solutions, one is creating a testament or a foundation. However, the Trust is not covered by the Turkish legislation.
If you are looking to set up a trust in Turkey, then the private foundation is the most resembling solution offered. Now, let’s first see what Trust is.
What is a Trust?
It is pretty tricky to define what Trust is. It is an arrangement under which an individual or a group of people are made accountable for assets for the benefit of another person or group.
The people or person responsible for the asset and who is administering the Trust are known as ‘trustees.’ In contrast, those who benefit from the Trust are known as ‘beneficiaries.’ The person who finds and establishes the Trust is referred to as the ‘settlor.’
The arrangement must be set up so that it is recognized by law, and the Trustees are subject to legal controls. In trusts, ‘Deeds of Trust’ is the most crucial part of establishing a Trust.
The Trust will then held the assets, and they will be dealt with and will be released as per the Deed of Trust. For example, you can use Trust for the benefit of Mr. D until his death and then for the benefit of his kids, or they can be kept safe by the trustees until someone reaches a certain age.
Types of Trusts and Foundations Can be Set up in Turkey
Turkey as a country does not acknowledge trusts which provide for their establishment. However, the private foundation is similar to the Trust in Turkey. These private foundations can be set up for the same purpose and will similar structure in terms of participants.
Just like the Trust, what follows are purposes an individual can open a private foundation:
- Private foundations;
- State foundations.
- Public Services
- Estate Planning
The main difference between state and private foundations is simple; state foundations are considered governmental entities. On the other hand, private NGOs can be set up by local Turks or even foreign citizens living in Turkey.
If you wish to establish a trust, you will need to prepare a set of documents that the settlor and the trustee should sign. These documents can be a deed of trust or a will and notarized by a public notary.
Steps to Open a Trust in Turkey
In Turkey, no matter the type of fund you have selected, the setup and registration process usually stays the same. The approval of the Capital Market Boards is necessary for Turkey. The fund must also beset by a portfolio management company established as a Turkish company in the future.
Once the company is registered with the official Turkish Company Register, an agreement with a depositary acknowledgment will be prepared by the CMB. The main work of a depositary is to keep the funds’ assets per Turkey’s company laws.
A set of documents containing the investment’s internal rules and regulations should be drafted, and you have to get it approved from the CMB. Plus, registration with the Trae Register is also necessary. The primary tool to establish companies in Turkey is the Ministry of Commerce’s web portal MERIS, and you can register regardless of its type.
Type of the company, its full title, address, founding partners, objectives and subjects, capital, Board of directors/directors, signature officials, preferred shares (if any), share transfer restrictions (if any), and other information are entered through this portal.
Once you have entered the information, MERSIS will prepare the Company’s Articles of Association for you and your company. When all the pending permissions are approved, the place where the company will be established is to be referred to the Commercial Registry Office.
The established company’s founding partners, registration declarations, and all the essential and related documents must be presented and deposited.
Can anyone open a trust account?
As per the Turkish commercial code, you have to pay a minimum of ¼ of the capital from joint-stock companies before the registration. Suppose the established company is a joint-stock company and has cash as capital. In that case, an account must be opened by the new company’s name after the signature and approval have been done by the Articles of Association by the Commercial Registry Office. You have to pay the capital over ¼ by the name of the bank.
The bank shall block the deposited capital until registration, and the bank shall prepare a letter of the blockade. If you wish to open a Joint Stock Company then you’ll need to register it with the submission of the blockage letter and then send it to the Directorate of Trade Registry.
When you want to place your property as real capital, you can include assets containing intellectual property rights, virtual environments, which have no limited real rights, seizure, and injunctions, which can be evaluated and transferred in cash.
If you own a limited company, you need not have deposit capital before registration according to the Turkish Commercial Code. Hence, the Articles of Association’s signature and deposition of the Commercial Registry Office’s fees register the company.
The company’s type doesn’t matter. Regardless of how much capital has been invested in the company before registration, you have to do its total capital within 24 months after the partners’ registration.
Final Words – How to Open a Trust in Turkey?
There are several reasons why it is beneficial to open trusts in Turkey. Some of the benefits of Trusts are; they can reduce inheritance tax, abridge the inheritance process, safeguard your assets from attack by creditors, provide protection for young children or people with limited life skills, ensure assets are adequately looked after. Hence, you can invest and open Trust in Turkey without having second thoughts.