Sole Proprietorship or Limited Company for E-commerce? (For Trendyol Sellers)

Opening a store on Trendyol requires you to be a registered taxpayer — but which type of taxpayer you become is up to you. Short answer: for the vast majority of new sellers, a sole proprietorship is the right starting point; a limited company starts to make sense once profit climbs to a certain level, when you set up a partnership structure, or when the risk to your personal assets grows large. In this article we compare the two structures through a seller's eyes: the difference in setup and monthly cost, the logic of taxation, the young-entrepreneur exemption, and a decision framework for the question of "at what point should I switch to a limited company." We covered the non-company line items of opening a store separately in the cost of opening a Trendyol store article.

Up front and underlined: this article offers a general framework, it is not accounting or legal advice. Tax rates, exemption amounts, and setup conditions change with the law and with annual regulations; the choice of company structure is one that is costly to reverse. Before you set anything up, be sure to consult an accountant with your own numbers — we will repeat this sentence once more at the end of the article, because it is the most important sentence on this topic.

The essence of the two structures: who is the taxpayer, who is liable?

The difference can be summed up in a single sentence: in a sole proprietorship the taxpayer is you (you pay income tax as a natural person), while in a limited company the taxpayer is the company (it pays corporate tax as a separate legal entity, and you are a shareholder). This single difference determines, in a chain reaction, the setup, the tax, the liability, and how you take money out:

The detail in the liability row is important: a limited company means "limited liability," but for public debts such as taxes and social security (SGK), the shareholders are liable in proportion to their shares, and directors have broader liability. In other words, a limited company is not an automatic shield against every debt in a business that goes badly — it provides protection against commercial debts, but discuss the limits on public debts with your accountant.

The difference in setup and monthly cost

We deliberately avoid giving figures here, because most of the "you can set up a company for X lira" lists floating around online are stale: almost all of the line items change by year, by city, and by your accountant. What does not change is the line items themselves and the ratio difference between the two structures:

• Setting up a sole proprietorship: opening the tax registration, notary work such as signature circulars and power of attorney, cash register/e-document setup, and your accountant's setup fee. The total is markedly below that of a limited company, and the process usually takes a few days.
• Setting up a limited company: on top of these come the articles of association, trade registry registration and publication fees, stamp duty obligations, and the statutory minimum capital requirement (the current amount can change, verify before setup). Both the number of line items and the amount grow.
• Monthly operating cost: this is where the real difference accumulates. A limited company has balance-sheet bookkeeping, higher accountant fees, and an additional transaction cost for every change subject to registration (address, director, capital). A sole proprietorship's fixed monthly expense is permanently lower.

Practical upshot: for a seller starting out with low revenue, a limited company's additional fixed cost is a "corporate premium" paid out of profit that hasn't been earned yet. What justifies paying this premium is not scale, but the tax and risk equation we are about to get to.

Taxation: this is where the real difference lies

Sole proprietorship: bracketed income tax (15–40%)

In a sole proprietorship, your annual net profit (not revenue!) enters the income tax schedule: the schedule starts at 15% and, as profit grows, climbs bracket by bracket up to 40%. The bracket amounts are set anew each year. This has two sides: a seller with relatively low profit taxes the bulk of their earnings in the lower brackets (15–20%) and pays less tax than a limited company's fixed 25%. As profit grows, however, the upper brackets (27%, 35%, 40%) kick in and the scissors close the other way.

Limited company: corporate tax (25%) + dividend withholding tax

A limited company pays 25% corporate tax on its profit — no matter how much the profit grows, the rate is fixed. But the calculation doesn't end there: when you want to move the after-tax profit from the company into your own pocket, this is a profit distribution and is separately subject to withholding tax (the rate can change by presidential decree; verify the current rate with your accountant). In other words, the sentence "tax is 25% in a limited company" is only true if you leave the profit inside the company; if you pull out all of the profit every year, the total burden rises well above 25% and your advantage over a sole proprietorship narrows, or even disappears.

The critical question: will you take the profit out, or leave it in the company?

This question is the key to the tax comparison. If you have to pull out what you earn every month for your living expenses, the limited company's fixed rate has to be considered together with the distribution withholding tax. If you largely leave the profit in the company and invest it in stock, new products, and advertising, the fixed 25% rate is a serious advantage against the upper income brackets — this is the real appeal of a limited company in growing e-commerce operations. Only your accountant can work out what this distinction means for your own numbers; what the article can do is hand you the right question.

Let's note two things as well: VAT is outside this decision — VAT liability and its workings are the same in both company types; the details are in the e-commerce VAT guide. Second, it is possible to start as a sole proprietor and later switch to a limited company; the law contains provisions that, under certain conditions, allow a business to be transferred to a capital company tax-free — if you are considering the switch, plan the timing and the conditions with your accountant.

The young-entrepreneur exemption: a serious advantage for those under 29

For entrepreneurs who register for income tax for the first time and who have not yet turned 29 at the start of their registration, there is, under certain conditions, a provision that exempts a portion of the earnings from income tax for the first three taxation periods (the exemption amount is set anew each year — verify the current amount with your accountant or from the Revenue Administration (GİB)). In addition, a social security premium support may also come into play for those who meet the conditions; again, ask your accountant about its terms.

The critical point for the decision is this: this exemption is specific to income-tax payers, that is, to sole proprietorships — you cannot benefit from it if you set up a limited company. For a seller starting e-commerce under the age of 29, this is a factor that, in most scenarios, puts a sole proprietorship well ahead in the early years: setup and monthly costs are low, and a portion of your earnings is exempt from tax for three years. Once the exemption period ends, reconsidering a limited company is also an option.

The 1% e-commerce withholding tax: present on both sides, offset on both sides

The answer to "if I set up a limited company, will I escape the marketplace withholding tax?" is no — but this is not bad news. Marketplaces like Trendyol deduct the 1% e-commerce withholding tax from the payout on the sales they facilitate; the tax base is the amount excluding VAT. This deduction operates independently of company type and is not lost money in either structure: in a sole proprietorship it is offset against the income tax calculated at year-end, and in a limited company against the corporate tax (including provisional tax periods). In other words, the withholding tax is not an additional tax, but a prepaid slice of the tax — it affects cash flow, not the total tax burden. You can see how much withholding tax will be deducted monthly on your own revenue with the e-commerce withholding tax calculator. Bottom line: the withholding tax is a neutral item in the sole-proprietor vs. limited-company decision; you don't need to put it into the decision equation.

Which one makes sense when? A decision framework

The "set up a limited company once you pass X lira in revenue" advice floating around online is the wrong framing: the tax brackets look at profit, not revenue, and a store operating on a 10% margin and one operating on a 40% margin have completely different profit at the same revenue. There is no hard threshold; instead, look at the answers to these questions:

• Situations pointing to a sole proprietorship: you are just starting out and your profit is not yet proven; your annual net profit stays mostly in the lower income brackets; you qualify for the young-entrepreneur exemption; you are on your own and want to be able to close the business quickly if needed.
• Situations pointing to a limited company: your net profit has climbed permanently into the upper brackets (the 35–40% band) and you leave most of the profit in the business rather than taking it out; you are bringing on a partner; branding, dealership, or corporate customer relationships require a legal entity; your stock and debt have grown, and you want to separate your personal assets from commercial risk.

The precondition for making this comparison soundly is knowing your real profit: without seeing what's left in hand after commission, shipping, returns, advertising, and withholding tax come off, both the bracket estimate and the company decision hang in the air. You can work out your real profit per sale with the Trendyol profit calculator; if you are new to Trendyol, we covered the whole process in the guide to selling on Trendyol.

Frequently asked questions

Do I have to set up a company to sell on Trendyol?

Trendyol requires a tax registration (tax certificate) when you open a store; a sole proprietorship is sufficient for this requirement. So don't let the word "company" scare you — you don't have to set up a limited company; a natural-person registration is also a business.

Can I start with a sole proprietorship and switch to a limited company later?

Yes, this is a much-followed path: start at low cost, and switch to a legal entity once the business is proven and profit grows. The law contains provisions that, under certain conditions, allow an individual business to be transferred to a capital company tax-free; since the conditions and timing are technical, be sure to structure the switch with your accountant.

If I set up a limited company, will my tax definitely go down?

No, it doesn't go down automatically. Corporate tax is a fixed 25%, but when you distribute the profit to yourself you also pay withholding tax; at low and medium profit levels, bracketed income tax is usually more advantageous. A limited company's tax advantage mainly emerges at high profit and in the scenario where the profit is left inside the company — have your accountant calculate both scenarios with your own numbers.

In which company type is the 1% e-commerce withholding tax lower?

It is the same in both: the marketplace deducts 1% on the amount excluding VAT, and this amount is offset against income tax in a sole proprietorship and against corporate tax in a limited company. The withholding tax does not affect the company-type decision.

First know your profit, then choose your company

To sum up: for a new Trendyol seller, the default answer is a sole proprietorship — cheap, fast, flexible, and, if you are under 29, exemption-advantaged. A limited company comes into play when profit settles permanently into the upper brackets, when the profit stays in the business, and when reasons of risk/partnership arise. We leave the final word to the sentence from the start: this article gives a framework, you must make the decision with your own numbers together with an accountant — the rates, bracket amounts, and exemptions change every year, and none of the information here substitutes for personal tax advice.

On the data side of the decision, Verimle makes your job easier: when you connect your Trendyol account, Profit X-ray calculates each order's real profit after commission, shipping, returns, and withholding tax — the most solid way to be able to tell your accountant "my annual net profit is roughly this" is to look at profit line by line in the panel, not at revenue. Explore the Profit X-ray and payout reconciliation features; independent of the company decision, whatever structure you are in, making the deductions and the profit visible is in your favor.

Official source and verification note. The variable information in this article — the tax rates of sole proprietorships and limited companies (income tax brackets, corporate tax), setup costs, and obligations — changes with the legislation and differs from business to business; what is here is general information and does not substitute for official legislation or an accountant's opinion. Confirm the current rates, bracket amounts, and exemptions from the Revenue Administration (GİB). As for the sole-proprietorship vs. limited-company decision, it depends on your revenue, your cost structure, and your personal situation — be sure to evaluate it with your own accountant (SMMM); none of the information here is binding legal or tax advice. You can see in advance how much withholding tax will be deducted on your own revenue with the e-commerce withholding tax calculator. This guide was reviewed on 18 July 2026.