US LLC and life in Turkey: The biggest pitfalls for digital entrepreneurs
Anonymized case study from our consulting practice. Legal status: July 2026.
· · Decker Real Estate Approx. 12 min. reading time
Source: Decker Real Estate's own consulting practice — As of: July 3, 2026
For many digital entrepreneurs, a US LLC initially seems like an elegant solution: The company is registered in the USA, customers are located internationally, invoices are issued in US dollars, and the work itself is done online.
Then, however, the plan to move permanently to Turkey comes into play. This is precisely where questions arise that are often underestimated: Is it sufficient for the LLC to be based in the USA? Do the earnings automatically remain "foreign"? Am I allowed to work for my LLC from my apartment in Fethiye, Kaş, Alanya, or İzmir? And is an LLC also a clean solution regarding residency, work permits, and taxes?
This article does not replace individual tax or legal advice. Rather, it aims to show which points should be considered before permanently relocating to Turkey.
The anonymized case study
A German businesswoman wants to move permanently to Turkey. She owns a US single-member LLC. This LLC will be used to bill international clients for web design, online courses, and digital services.
The assumption is
The entrepreneur's starting point
The LLC is based in the USA, the customers are located outside of Türkiye, the invoices are issued by the LLC, and the money goes into a foreign account.
The fallacy
Therefore, the revenues allegedly did not originate in Turkey — an assumption that does not hold up in practice in such general terms.
In practice, we wouldn't answer with "right" or "wrong". We would first explain: The LLC address, bank account, and customer address are only part of the check. Crucially, it's also where the person lives, works, provides services, manages customers, and actually runs the business.
A single-member LLC is not automatically "invisible".„
🇺🇸 US perspective
In the US, a single-member LLC can be treated as a "disregarded entity" for federal tax purposes. Without such an election, it is generally not taxed separately from its owner; the business activities are attributed to the owner for tax purposes. This classification, however, is a rule of US federal tax law.
🇺🇷 Türkiye Perspective
This does not automatically mean the same treatment for Turkey. A Turkish tax audit will not be concluded simply because the documents are labeled "disregarded entity" in the US system. The specific LLC, its articles of association, ownership structure, management rights, contracts, cash flows, and actual business activities must therefore be assessed separately.
Three different tax issues — not just one
In the case of an LLC structure in conjunction with a move to Turkey, at least three separate tax issues can arise.
1 Personal tax residence of the owner
Anyone who becomes a tax resident in Turkey is generally subject to Turkish income tax on both domestic and foreign income. Turkish income tax law applies to individuals who are resident in Turkey.
This doesn't automatically mean that every LLC revenue is treated as personal income in Turkey. However, personal tax residency is often the first point of consideration—regardless of whether the money initially remains in a US account. Relevant factors include: residence and actual center of vital interests, length of stay in Turkey, available housing, family and economic ties, previous tax residency, as well as the type of LLC and the nature of the income.
2 Tax classification of the LLC itself
Turkish corporate tax law, among other things, determines whether a company's registered office or its "iş merkezi" (place of management) is located in Turkey. Companies with their registered office or place of management in Turkey can, in principle, be subject to tax on worldwide income.
For a US LLC, this doesn't automatically mean it becomes fully liable for taxes in Turkey simply because of a home office. However, it illustrates why the question "Where is the LLC actually located?" can be crucial.
3 Business premises and ongoing activities
In addition to personal residence and management, issues related to permanent establishment or registration may also arise. While a home office does not automatically constitute a permanent establishment—that would be too simplistic—the risk increases significantly if the individual permanently acquires clients, prepares proposals, negotiates or signs contracts, produces online courses, develops websites, manages projects, approves invoices, monitors bank accounts, manages employees or service providers, and makes strategic decisions for the LLC from Turkey.
The most common misconception: equating foreign client with foreign income
Many digital entrepreneurs understandably argue: „My customers are located in Germany, the USA, or worldwide. Therefore, I don't work for the Turkish market.“ However, this view alone is not sufficient for tax and work permit issues.
A foreign customer can certainly be relevant. However, the following can be just as relevant:
- Where is the person performing the service located?
- Where is the product manufactured?
- Where is the company managed?
- Where are decisions made from?
- From where are customer relationships managed?
- Where is the permanently used work environment located?
The LLC does not solve the work permit issue either.
📜 The separation of areas
Tax law and work permit law are separate areas. Even if a person were to correctly declare or pay taxes on their income in Turkey, this does not automatically answer the question of whether they are legally permitted to perform the specific job.
🇺🇷 Official Position
The Turkish Ministry of Labor explicitly states: Foreigners who wish to open their own business in Turkey and work on their own account must apply for a work permit before commencing operations. After the business has been established, registered with the commercial register or chamber of commerce, and registered for tax purposes, the application for a work permit can then be submitted.
The crucial distinction is therefore this: A foreign LLC can continue to exist. However, the decisive factor is whether the person only passively holds it from Turkey or actively manages it there on a permanent basis.
Why a Turkish society is not automatically the easy solution
Some entrepreneurs are therefore considering setting up an additional Turkish company. While this can be useful in individual cases, it also creates new requirements.
For foreign shareholders of a Turkish company, the Ministry of Labor generally specifies the following criteria, among others, for a new company:
| criterion | Requirement |
|---|---|
| Paid-in capital of the company | at least 500,000 TL |
| Own capital share | at least 500,000 TL |
| Participation rate | at least 20 percent |
| Turkish workers | From the beginning of the seventh month, regularly at least five |
| Alternative threshold | Capital/employment criteria no longer apply to investments with a capital stake of USD 100,000 or more. |
Source: TC Çalışma ve Sosyal Güvenlik Bakanlığı — as of July 2026
Managing director on paper — or in reality?
Another important point: It is not always enough to formally withdraw from the role of managing director.
Those who are not registered in the commercial register as Managing Member, Director or CEO, but who actually make decisions, conclude contracts, manage clients, control projects, release payments and carry out operational work from Turkey, often remain the central person of the company economically.
What is formally recorded in the register
Managing Member, Director or Managing Director according to the commercial register — often not identical to the actual control.
What else should be checked
Who is authorized to sign, who has access to bank accounts, who negotiates with customers, who creates the service, who manages the day-to-day business — and where does this actually take place?
A passive investment in a foreign company is therefore different from an active solo LLC that is entirely managed from Turkey.
What we clarify first for LLC inquiries
In our practice, during an initial consultation, we don't assess whether an LLC is "good" or "bad." Instead, we first clarify its actual structure. This includes, in particular, the following questions:
Our practical conclusion: The LLC is a building block — not a substitute for coordinated planning.
While a US LLC can be useful for international clients, payment processing, or existing business structures, it is no substitute for coordinated planning in Turkey.
Sources and status
- Analysis status: July 3, 2026
- US Internal Revenue Service (IRS) — Single-Member LLC / Disregarded Entity
- Gelir İdaresi Başkanlığı (Turkish Financial Administration) — Income and Corporate Tax Law
- TC Çalışma ve Sosyal Güvenlik Bakanlığı (Turkish Ministry of Labour) — Work permit rules for foreigners
- Own consulting practice: Decker Real Estate, July 2026
Your next step
Are you planning a permanent move to Turkey and operate a US LLC or another foreign company? We will work with you to clarify the practical questions regarding place of residence, residency, and planning – without obligation and in German.
Decker Real Estate · Yetki Belgesi No 3506573 · İzmir / Alanya · info@decker-realestate.com
The most important questions about US LLCs and living in Turkey
No. What matters is not solely the registered office of the LLC, but where the owner lives, works, and actually manages the business. These factors can simultaneously affect personal tax residency, the LLC itself, and any potential permanent establishment.
No. The classification as a "disregarded entity" applies for US federal tax purposes. For Turkey, the articles of association, ownership structure, contracts, and actual business activities must be examined separately.
It depends on the individual case. A home office does not automatically constitute a permanent establishment; however, the risk increases the more customer acquisition, contract conclusions, and business management are permanently carried out from Turkey.
No. Crucially, it also depends on where the service is provided, where the company is managed, and from where decisions and customer relationships are controlled.
Possibly. Tax law and work permit law are separate areas — even correctly taxed employment does not automatically answer the question of whether the specific activity is permitted under labor law.
Not necessarily. New Turkish companies with foreign participation must generally meet capital and employment criteria that are often not economically viable for small, solo businesses.
No. What is also crucial is who actually concludes contracts, releases payments, manages customers and runs the day-to-day business — regardless of the registration.
Ideally, this should be done before the move, before signing a long-term lease, and before the first sales from Turkey begin — not afterwards.
No. For LLC structures, permanent establishments, work permits and international taxation, a Turkish SMMM/YMM or tax lawyer should be consulted in advance, and if there is a German connection, a German advisor for international tax law should be involved.
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