Freelancing in Turkey: Sole Proprietorship (Şahıs Şirketi), Invoicing & Tax Terms

With its vibrant co-working scene, fast fiber broadband, and appealing lifestyle across Istanbul, Izmir, and the southern coast, Turkey has emerged as a major hub for international digital nomads, software engineers, translators, and creative consultants.

However, earning money while living in Turkey as an independent professional requires working within the legal tax framework. Foreign residents holding valid Turkish Residence Permits (İkamet) can register a Sole Proprietorship (Şahıs Şirketi) to legally invoice foreign clients, issue official electronic archive invoices (e-Arşiv Fatura), open commercial sub-accounts with a Turkish Bank Account, deduct business expenses, and comply with national revenue requirements.

In this guide, you will learn how a sole proprietorship works, the role of your Certified Public Accountant (SMMM), the service export tax exemption (Hizmet İhracatı), a realistic accountant consultation dialogue, and essential Turkish business vocabulary.

1. How a Turkish Sole Proprietorship (Şahıs Şirketi) Works

• The Most Agile Company Type: Unlike a Limited Liability Company (Limited Şirket - Ltd. Şti.), which requires minimum capital deposits and complex notarized articles of association, a Sole Proprietorship (Şahıs Şirketi) can be formed within 24 to 48 hours with minimal initial setup costs.
• The Role of the Certified Accountant (SMMM): In Turkey, by law, all business bookkeeping and tax declarations must be submitted through a licensed Certified Public Accountant (Serbest Muhasebeci Mali Müşavir - SMMM). After granting your accountant a power of attorney at a Turkish Notary (Noter), they will register your company with the local Tax Office (Vergi Dairesi), file your monthly tax declarations, and manage deductible expenses.
• The Registered Office Address & Tax Inspection (Yoklama):
  Every company must have a registered commercial address. Freelancers commonly use a legitimate virtual office (sanal ofis) or register their home residence (home ofis). A few days after registration, an official tax inspector (Yoklama Memuru) visits the address to verify your identity and confirm you have basic working equipment (desk, computer).
• Export of Services VAT Exemption (Hizmet İhracatı KDV İstisnası):
  Under Article 11/1-a of the Turkish Value Added Tax Law, if you provide software development, design, consulting, or translation services to clients located outside of Turkey, and the benefit of the service is consumed abroad with payment received in foreign currency, your invoice is legally exempt from Turkish VAT (0% KDV with Exemption Code 301). Furthermore, eligible software and tech export activities may benefit from significant statutory income tax deductions.

2. Real-Life Dialogue: Meeting with a Certified Accountant (Mali Müşavir ile Görüşme)

Here is a typical consultation between a foreign software developer (Arthur) and a licensed Turkish accountant (Mali Müşavir).

Arthur:          İyi günler Ahmet Bey, randevumuz için geldim.
                 (Good day Mr. Ahmet, I came for our appointment.)

Müşavir:         İyi günler Arthur Bey, hoş geldiniz! Lütfen oturun. Size nasıl yardımcı olabilirim?
                 (Good day Mr. Arthur, welcome! Please sit down. How can I help you?)

Arthur:          Yurt dışındaki teknoloji firmalarına uzaktan yazılım danışmanlığı veriyorum. Türkiye'de yasal olarak şahıs şirketi kurmak istiyorum.
                 (I provide remote software consulting to technology companies abroad. I want to legally establish a sole proprietorship in Turkey.)

Müşavir:         Çok doğru bir adım. İkamet izniniz ve vergi kimlik numaranız var mı?
                 (A very correct step. Do you have a residence permit and a tax ID number?)

Arthur:          Evet, geçerli bir ikamet kartım ve potansiyel vergi numaram var.
                 (Yes, I have a valid residence permit card and a potential tax number.)

Müşavir:         Harika. Şirket kuruluşu için bir sanal ofis sözleşmesi yapacağız, ardından notere gidip adıma muhasebe vekâleti vereceksiniz.
                 (Great. For company establishment, we will arrange a virtual office contract, then visit the notary so you can grant an accounting power of attorney in my name.)

Arthur:          Peki yurt dışındaki müşterilerime keseceğim faturalarda KDV durumu nasıl olacak?
                 (And what will the VAT situation be on invoices I issue to foreign clients?)

Müşavir:         Hizmet ihracatı kapsamında olduğu için yurt dışı faturalarınızı yüzde 0 KDV ile e-Arşiv portalından düzenleyeceğiz.
                 (Because it falls under service exports, we will issue your foreign invoices with 0% VAT via the e-Archive portal.)

Arthur:          Şirket kuruluşu ne kadar sürer?
                 (How long does company setup take?)

Müşavir:         Vergi dairesi kaydını iki günde tamamlarız. Vergi memuru yoklamaya geldikten sonra vergi levhanız onaylanır.
                 (We will complete tax office registration in two days. After the tax officer conducts the site inspection, your tax certificate is approved.)

Arthur:          Çok teşekkür ederim Ahmet Bey, süreci başlatalım!
                 (Thank you very much Mr. Ahmet, let's start the process!)

3. Essential Turkish Business & Tax Vocabulary Table

Master these 25 essential financial and accounting terms:

4. Key Tax Dates for Self-Employed Expats

Keep these recurring statutory deadlines marked on your calendar:

• Monthly (by the 28th): Value Added Tax (KDV) declaration and payment for the previous month.
• Quarterly (February, May, August, November): Advance Corporate/Income Tax (Geçici Vergi) on net profits.
• Annually (March): Final Annual Income Tax Return (Yıllık Gelir Vergisi Beyannamesi) reconciling the previous year’s total net income.