How to pay yourself from a foreign company as a Turkish founder (2026)

Last updated: April 2026

Tax disclaimer: The information in this guide is for research and educational purposes. It does not constitute legal or tax advice. Turkish tax regulations change frequently — always verify current requirements with a licensed Turkish tax advisor (mali müşavir or vergi danışmanı) before taking action.

How to pay yourself from a foreign company as a Turkish founder (2026)

You've formed a foreign company — a Delaware LLC, a Dubai freezone entity, or something similar. Money is accumulating in that account. Now you need to extract it. The question is not whether Turkey will be involved. It will be. Turkey taxes worldwide income for residents, which means every salary, dividend, and consulting fee you receive from a foreign company has Turkish tax implications.

The good news is that there are three legally defensible methods to pay yourself from a foreign company as a Turkish founder, and one of them comes with an 80% income exemption that most guides in English have never mentioned. The challenge is that each method works differently, carries different documentation requirements, and exposes you to different risks — including a Controlled Foreign Corporation (CFC) trap that catches founders who assume that "leaving money in the company" is a neutral option.

This guide covers the tax treatment, documentation, and banking reality for each method, in plain terms.

Does Turkey tax what you receive from a foreign company?

Yes. If you are a Turkish tax resident — meaning you spend more than 183 days per year in Turkey or maintain a permanent home there — Turkey taxes your worldwide income. This includes salary, dividends, and consulting fees from a foreign company, regardless of whether the money is remitted to Turkey.

Non-residents are taxed only on Turkish-source income. But if you live in Istanbul, Ankara, or anywhere in Turkey, that residency threshold almost certainly applies to you.

Turkey has double taxation treaties with over 95 countries, including the United States, UAE, UK, and EU member states. Treaty provisions may reduce withholding taxes and prevent double taxation, but they do not eliminate your Turkish filing obligation. If your home country and Turkey both have a claim on your income, the treaty determines which country gets primary taxation rights — it does not make the Turkish obligation disappear.

One critical implication: the "I'll just leave money in my LLC" approach does not eliminate Turkish tax exposure. Turkey's CFC rules may attribute your foreign company's undistributed profits to you directly. More on that below.

Method 1 — Salary or management fee from your foreign company

How the payment structure works

Your foreign company pays you as an employee or as a director or manager. For a Delaware LLC, this is typically structured as a management fee rather than a formal salary, since LLCs do not operate payroll the same way a corporation does. A UAE freezone entity can issue a formal employment contract.

Either way, you need a written services agreement or employment contract between you (as an individual) and the foreign company, signed by both parties. The agreement should specify the fee amount, payment schedule, and nature of the services provided.

2026 Turkish income tax on salary and management fee income

Income received as a salary or management fee is classified as employment income (ücret geliri) or self-employment income (serbest meslek kazancı) depending on structure. Progressive income tax rates apply.

2026 Turkish income tax brackets:

Source: CottGroup, 2026 Turkey tax bracket update (brackets adjusted 25.49% for inflation per Domestic Price Index).

At current exchange rates, TRY 5,300,000 is roughly $140,000–$160,000 USD — which means founders earning above that threshold face a 40% marginal rate on the excess. This is not a minor consideration.

Social security (SGK) obligations

This is the cost that founders most frequently overlook. If you receive a management fee as a self-employed individual, you are required to register with Turkey's Social Security Institution (SGK) under the Bağ-Kur scheme. Contributions run approximately 33.5% of your declared income base.

That brings your combined effective cost — income tax plus social security — well above the headline income tax rate for mid-level earners. Before choosing the salary or management fee method, model the full cost including SGK.

Turkey has bilateral social security totalization agreements with some countries. If your foreign company is based in a country covered by such an agreement, it may affect your obligation. Confirm this with an advisor before structuring your payments.

Documentation required

• Signed services agreement or employment contract
• Invoices (for management fee structure)
• Bank transfer records showing payment received in Turkey
• Annual income tax return (Gelir Vergisi Beyannamesi)

Method 2 — Dividend distribution from your foreign company

Basic tax treatment

Dividend income from foreign companies is taxable in Turkey once it exceeds TRY 22,000 per year (2026 threshold, subject to annual update). Above that threshold, dividends are declared in your annual income tax return and taxed at progressive rates.

Any withholding tax paid in the foreign company's country can generally be credited against your Turkish income tax liability, under the applicable double taxation treaty. For a UAE freezone entity, the Turkey-UAE tax treaty is relevant. For a Delaware LLC, note that there is no US-Turkey income tax treaty as of 2026 — verify the current status with an advisor, as this affects your ability to claim foreign tax credits.

The 50% exemption for foreign dividends — Law 7491 (December 2023)

This is the provision most English-language tax guides haven't caught up to. Under Law No. 7491, enacted December 2023, 50% of dividends received by individuals from non-resident companies is exempt from Turkish income tax — if two specific conditions are met:

1. You hold at least 50% of the share capital of the foreign company.
2. The dividends are remitted to a Turkish bank account by the annual income tax return filing deadline.

Practical effect: Only half the dividend counts as taxable income. If you receive $50,000 in dividends, you declare the TRY equivalent of roughly $25,000 as taxable income. This cuts your effective rate significantly, particularly at lower income levels.

The repatriation condition is not optional. If the funds are sitting in a foreign account when you file your return, the exemption is forfeited for that year.

CFC rules and when they become relevant

Turkey's Controlled Foreign Corporation rules create a scenario where your foreign company's profits are attributed to you and taxed in Turkey even without any distribution. CFC attribution applies when all four of the following conditions are met simultaneously:

1. You hold 50% or more of shares, voting rights, or dividend rights in the foreign company.
2. At least 25% of the foreign company's gross income is passive — dividends, interest, rents, royalties, or securities gains.
3. The foreign company is subject to an effective corporate tax rate of less than 10%.
4. The foreign company's annual gross revenue exceeds TRY 100,000 (approximately $2,700–$3,000 USD at current rates — a very low threshold).

CFC warning: A Delaware LLC with primarily consulting or service income is typically active, not passive — but if it holds investments, earns royalties, or has interest income, condition two may be triggered. The LLC's pass-through US tax treatment does not translate into a Turkish exemption. A UAE freezone company now faces a 9% corporate tax (since June 2023), which may or may not clear the 10% threshold depending on the specific freezone and applicable exemptions. If you are close to any of these thresholds, get a CFC analysis before your next filing.

The CFC rules in Turkish tax law are primarily structured around corporate taxpayers, but also reference individual shareholders. Turkish tax advisors differ in their interpretation of how strictly CFC rules apply to individual founders versus corporate shareholders. This is an area where professional guidance is genuinely necessary.

Method 3 — Consulting or service fee via B2B invoice

How this structure works legally

You — as a Turkish-resident individual or registered sole proprietor (serbest meslek erbabı) — invoice your foreign company for services you have rendered. The foreign company pays the invoice in USD or EUR to your Turkish bank account. You are billing a foreign client.

This structure is legally clean and commonly used. It requires you to register as a sole proprietor with the Turkish tax authority (Gelir İdaresi Başkanlığı) if you have not done so already.

Turkish income tax treatment

Consulting and service fee income is classified as self-employment income (serbest meslek kazancı), taxed at the same progressive brackets as above. You must file quarterly provisional tax returns (geçici vergi beyannamesi) in addition to your annual return. SGK Bağ-Kur registration applies here as well.

The 80% service export exemption — the most underused tool

This is the planning opportunity that nearly every English-language guide misses entirely. Under Turkish Income Tax Law, as amended by Law No. 7491 in December 2023, individuals providing qualifying services exclusively to foreign clients may exclude 80% of their service income from their taxable income base.

Eligible service categories include:

• Software development
• Architecture and engineering
• Design
• Medical reporting
• Bookkeeping
• Call center services
• Data storage, processing, and analysis

Two conditions must both be met:

1. The service must be entirely utilized abroad — the foreign client, not a Turkish entity, must be the beneficiary of the service.
2. 100% of the income must be transferred to a Turkish bank account by the income tax return filing deadline for the applicable period.

Practical effect: Only 20% of qualifying income enters your taxable income calculation. A founder earning the TRY equivalent of $80,000 in qualifying software development services would declare the equivalent of approximately $16,000 as taxable income. At the 15–20% bracket, the effective income tax rate falls to low single digits on the gross amount.

VAT treatment is equally favorable: export services are subject to 0% VAT in Turkey (tam istisna), so you do not charge VAT on your invoice to the foreign company.

Important — repatriation condition: Both the 80% service export exemption and the 50% dividend exemption (Method 2) require funds to arrive in a Turkish bank account by the filing deadline. This is a hard legal condition, not a recommendation. If the money is still sitting in a foreign account when you file, the exemption does not apply for that period.

The 80% exemption requires proper documentation and confirmation that your specific service category qualifies. A Turkish accountant (mali müşavir) familiar with international income should review your situation before you apply it.

Required documentation

• Signed service agreement with the foreign company (in the company's name as the contracting party)
• Invoices issued to the foreign company for each payment period
• Bank transfer records proving receipt in Turkey before the filing deadline
• Annual income tax return declaring self-employment income with the exemption applied

Payment method comparison — Turkey tax treatment at a glance

All rates are subject to applicable double taxation treaty provisions. This table represents general guidance only — not tax advice. Your effective rate depends on total income, filing status, and whether treaty provisions apply.

Banking: receiving foreign currency in Turkey

Opening a foreign currency account at a Turkish bank

All major Turkish banks offer USD and EUR current accounts (döviz hesabı): Garanti BBVA, İşbank, Ziraat Bankası, Yapı Kredi, and QNB Finansbank. For incoming international transfers, provide your sender with your IBAN (26 characters, starting with TR) and your bank's SWIFT/BIC code.

Foreign currency accounts allow you to hold USD or EUR without forced conversion, which matters when you are also managing TRY depreciation risk. You can convert to TRY on your schedule rather than at the moment of receipt.

Wise is no longer available for Turkish residents

Wise stopped serving Turkish residents in May 2023. You cannot use a Turkish address for a Wise account, and payments received there by Turkish residents create compliance complications. Many fintech comparison articles still list Wise as an option — they are out of date.

Some founders maintain a foreign address for a Wise account, relying on proof of address in another country. This approach has its own compliance implications and is not a straightforward solution.

Payoneer, Cenoa, and Grey as intermediaries

The practical workflow for many founders: receive foreign income into a US account via Cenoa or Grey, then wire to your Turkish foreign currency account when you need the funds. This gives you timing control for exchange rate management and keeps your repatriation documentation clean.

MASAK declaration requirements — effective January 1, 2026

New MASAK (Financial Crimes Investigation Board — Mali Suçları Araştırma Kurulu) regulations became effective on January 1, 2026 and require declaration for high-value transactions:

• TRY 200,000 and above: A brief written declaration of transaction purpose is required.
• TRY 2,000,000 and above: A full Cash/Transaction Declaration Form is mandatory.

This applies to both incoming and outgoing transfers, across all channels — wire, EFT, and mobile banking. For corporate-level inbound foreign currency transactions above $50,000 USD, banks frequently request documentation identifying the nature of the payment: service fee, loan, capital injection, or otherwise.

Keep your service agreements, invoices, and contracts accessible. Your bank will ask for documentation, and having it organized in advance prevents delays.

Common mistakes Turkish founders make

Not declaring foreign income at all. Turkey participates in the Common Reporting Standard (CRS) — Turkish tax authorities receive automatic account information from over 100 countries. Undisclosed offshore income is increasingly detectable. The risk of non-declaration has grown significantly in recent years.

Assuming LLC pass-through means no Turkish tax. A US LLC is transparent for US federal tax purposes, but Turkey does not automatically adopt that treatment. The income can still be attributed to you under CFC principles or simply taxed as worldwide income from a Turkish resident's perspective.

Missing the repatriation deadline for exemptions. Both the 80% service export exemption and the 50% dividend exemption require funds to be in a Turkish bank account by the tax return filing date. Timing errors forfeit the exemption for that period — there is no cure after the fact.

Ignoring SGK when taking consulting income. Many founders focus entirely on income tax and miss the Bağ-Kur social security contribution, which runs approximately 33.5% of declared income. These contributions are mandatory and can materially change the economics of the consulting fee approach.

Using Wise as the receiving account. Wise stopped serving Turkish residents in 2023. Payments directed to a Wise account linked to a Turkish address may be rejected or frozen.

Mislabeling income type for simplicity. Calling everything "salary" when some payments are actually dividends, or consulting fees, is a documentation shortcut that creates assessment risk. Each method has different classification requirements. Use the right structure and document it accordingly.

When to engage a Turkish tax advisor

Before your first international payment, get the structure right. A Turkish mali müşavir with international income experience costs far less than a misclassification assessment.

Engage a professional advisor if:

• Your foreign company's gross revenue exceeds TRY 100,000 and it has any passive income — a CFC analysis is necessary before your next filing.
• You want to claim the 80% service export exemption or the 50% dividend exemption — both have strict conditions and documentation requirements.
• You are considering a transfer above $50,000 USD — understand what your bank will require before the wire arrives.
• You hold a UAE freezone entity — the Turkey-UAE double taxation treaty provisions and the UAE's new 9% corporate tax create specific questions that require local expertise.
• You are a Delaware LLC owner — the absence of a US-Turkey tax treaty as of 2026 affects your credit options and filing obligations.

Turkish income tax returns are due in March for the prior calendar year. An accountant familiar with foreign-source income is worth engaging well before that deadline.

Who this is NOT for

This guide is not for you if:

• You are not a Turkish tax resident. If you have legally established tax residency elsewhere — and can demonstrate it — Turkey's worldwide income rules do not apply. This guide addresses founders who live in Turkey.
• You are looking for ways to avoid Turkish tax obligations. This guide covers legal structures and available exemptions. It does not address offshore structuring designed to evade Turkish tax, which carries serious legal risk.
• You are a Turkish corporate entity. This guide addresses individual founders — natural persons. Corporate shareholders face different CFC, dividend, and reporting rules.
• Your foreign company is dormant with no revenue. If your company has no activity and no income, most of the mechanics described here are not yet relevant. Return to this guide when you begin receiving payments.
• You need specific advice for your situation. This guide provides a framework. Your particular company structure, income level, service type, and treaty situation require professional review before you act.

Conclusion

Turkish founders with foreign companies face a real but navigable tax landscape. Turkey taxes worldwide income without exception for residents — but the tax code also contains two significant exemptions that reduce the burden for qualifying founders: the 80% service export exemption for those billing foreign clients in eligible service categories, and the 50% dividend exemption for founders who own at least half of their foreign company and repatriate dividends on time.

The right payment method depends on your company structure, the nature of your income, and your willingness to meet the documentation requirements. The consulting fee approach with the 80% exemption offers the most favorable effective rate for founders in eligible service sectors. Dividend distribution works well for founders who meet the Law 7491 conditions. Salary and management fees are the simplest to explain but carry the highest combined tax burden when SGK is factored in.

What does not work: ignoring the Turkish filing obligation, assuming your offshore structure is invisible to Turkish authorities, or relying on platforms like Wise that no longer serve Turkish residents.

For founders structuring a foreign entity, see our guides on forming a Delaware LLC as a non-resident, UAE freezone structure, and offshore company formation options for context on which company type suits your situation before you decide how to pay yourself from it.

Professional advice disclaimer: The information in this guide is for research and educational purposes. It does not constitute legal or tax advice. Turkish tax regulations and reporting requirements change frequently — always verify current requirements with a licensed Turkish tax advisor (mali müşavir) before taking action. Nothing in this article should be read as a recommendation to adopt any particular tax structure.

Sources: PwC Turkey Tax Summaries (individual income determination, personal tax rates, CFC/group taxation); CottGroup 2026 tax bracket update; Esin Attorney Partnership — Law No. 7491 analysis; IncorpTurkiye — 80% service export exemption; Karen Audit — MASAK 2026 mandatory declarations; PrimeTax — CFC Regime in Türkiye; Global Citizen Solutions — Taxes in Turkey 2026. All external links verified April 2026.

The information in this article is for research and educational purposes only. It does not constitute legal or tax advice. Program rules, investment thresholds, and government fees change frequently — always verify current requirements with a licensed advisor before taking action.