Fewer firms launched, more shut down: Turkish business activity contracts in Q1 2025

The number of companies established in Türkiye during the first quarter of 2025 declined by 3.6% year-on-year, while company closures rose by 5.6%, according to data released by the Union of Chambers and Commodity Exchanges of Türkiye (TOBB). Concentration of both newly established and closed companies was observed in the trade sector, the data showed.

Between January and March, 28,541 companies were founded, compared to 29,610 during the same period last year. Meanwhile, the number of companies that ceased operations rose to 5,607, up from 5,310 in the first quarter of 2024.

In March alone, the number of newly established companies fell by 8.3% from February, decreasing from 9,131 to 8,375. The number of company closures in the same month rose by 12.3%, climbing from 1,720 in February to 1,932 in March.

Of the 8,557 companies and cooperatives established in March, 86.5% were limited liability companies, 11.4% were joint-stock companies, and 2.1% were cooperatives. Istanbul accounted for the largest share of new business formations with 35.6%, followed by Ankara at 11.6% and Izmir at 6.5%.

China leads foreign partnership activity in March

A sectoral breakdown shows that of the companies and cooperatives established in March, 2,605 were in the trade sector, 1,181 in construction, and 1,176 in manufacturing. Similarly, among the companies that closed down during the same month, 689 operated in wholesale and retail trade and motor vehicle repair, 273 in manufacturing, and 168 in construction.

In March, 462 companies with foreign capital participation were established, with China and Iran being the leading countries of origin for foreign partners. Of these, 22 companies were formed in partnership with Chinese investors and 17 with Iranian investors.

Among the newly established foreign-capital companies, 65 were joint-stock companies, and 397 were limited liability companies. Most were concentrated in wholesale trade (183), computer programming (67), and the restaurant and food services sector (60).

Foreign partners held an 80.1% share of the total capital of these newly formed foreign-partnered businesses, underlining the continued appeal of Türkiye as a destination for international investment in key service and industrial sectors.