Buying an existing business, or partnering with one, is often the fastest way into Turkey (Türkiye). An acquisition can bring customers, licences, premises, staff and know-how that would take years to build from scratch. A joint venture with a Turkish partner can combine the foreign investor's technology, brand or capital with the partner's market knowledge and relationships.
These advantages come with risks that have to be managed. A Turkish target may carry tax, social security, employment or regulatory liabilities that are not visible from its financial statements. Share transfers follow formal rules that differ between company types. Larger transactions may need clearance from the Turkish Competition Authority before closing, and joint ventures need governance arrangements that work under Turkish company law, not only under the contract.
This guide explains the main routes, the due diligence that foreign investors usually carry out, how share transfers and approvals work, and how to structure a joint venture so it can be operated and, if necessary, exited. For setting up a new company instead, see setting up a company in Turkey.
Key points
- Foreign investors can generally acquire shares in Turkish companies on the same terms as Turkish investors, subject to sector-specific rules and approvals.
- The main routes are a share purchase, an asset or business purchase, a subscription to new shares, or a joint venture with a Turkish partner.
- Due diligence should cover tax, social security (SGK) and employment exposures in particular, as these are frequent sources of hidden liabilities.
- Share transfers in limited companies and joint stock companies follow different formalities. Getting them wrong can delay or invalidate the transfer.
- Mergers and acquisitions of control above the turnover thresholds must be notified to the Competition Authority and must not close before clearance; a notifiable deal closed without clearance is not legally valid and can attract fines.
- In a joint venture, important shareholder rights should be reflected in the articles of association as well as the shareholders' agreement.
What are the routes for investing in a Turkish business?
| Route | What happens | Typical use | Main points to watch |
|---|---|---|---|
| Share purchase | The investor buys existing shares from the current shareholders | Acquiring control or a stake in a running business | The company keeps all its history and liabilities |
| Asset or business purchase | The investor (through its own Turkish company) buys selected assets, contracts or a business unit | Carve-outs, distressed targets, avoiding historic liabilities | Contracts and licences may not transfer automatically. Where a workplace or part of it is transferred, employment contracts generally transfer automatically |
| Capital increase subscription | The company issues new shares to the investor | Growth funding, minority entry | Dilution, pre-emption rights, valuation |
| Joint venture | The investor and a Turkish partner set up a new company or the investor buys into the partner's company | Combining capabilities, regulated sectors, local presence | Governance, deadlock, exit and partner risk |
| Minority investment | The investor buys a non-controlling stake | Strategic or financial investments | Protective rights, information rights, exit |
Joint stock companies (anonim şirket, AŞ) and limited companies (limited şirket, Ltd. Şti.) are the two company types investors encounter most. The type affects how shares are transferred, how the company is governed and how easily new investors can join. See choosing a business structure and our article comparing limited and joint stock companies.
Due diligence: what to look at in a Turkish target
Legal, financial and tax due diligence is the investor's main tool for identifying risks and pricing them. Turkish targets, especially family-owned businesses, may have informal practices that differ from the formal record. Our article on due diligence in M&A and setting up business in Turkey explains why this step matters.
| Area | Typical questions |
|---|---|
| Corporate | Are the articles, share capital, share ledger, board and general assembly resolutions in order? Who are the authorised signatories? |
| Title to shares | Does the seller own the shares free of pledges, liens or third-party rights? Are share certificates issued and where are they? |
| Real estate | Who owns the premises? Are there mortgages or annotations? Are building occupancy permits and zoning in order? |
| Permits and licences | Does the company hold the workplace licences and sector permits it needs? Can they survive a change of control? |
| Employment and SGK | Are all employees registered with the SGK on their real wages? Are overtime, leave and severance liabilities accrued? Are there pending claims? |
| Tax | Are tax filings complete? Are there open audits, transfer pricing risks or unpaid liabilities? |
| Contracts | Do key contracts contain change-of-control or exclusivity clauses? Are there onerous terms? |
| Litigation and enforcement | Are there pending lawsuits, enforcement proceedings or mediation files? |
| Data protection | Is the company compliant with the Personal Data Protection Law (KVKK), including VERBIS registration where required? |
| Competition | Does the business take part in any risky arrangements with competitors or distributors? |
| Sanctions and anti-money laundering | Are customers, suppliers or shareholders subject to sanctions? Are payments traceable? |
| Intellectual property | Are trademarks and other rights registered in the company's name? |
Undeclared wages and unregistered employees can lead to significant SGK and tax assessments, and employees generally have five years to bring claims for many employment receivables. These issues are among the most common findings in Turkish due diligence. See hiring employees in Turkey.
How are shares transferred?
Limited companies
In a limited company, transferring shares (strictly, "capital shares") generally requires:
- a written share transfer agreement with the parties' signatures certified by a notary;
- approval of the general assembly of shareholders, unless the articles of association provide otherwise;
- registration of the transfer with the trade registry and its publication in the Turkish Trade Registry Gazette;
- entry of the new shareholder in the company's share ledger.
The articles may restrict transfers further, and existing shareholders may have pre-emption or approval rights. Because a limited company's shareholder list is public through the trade registry, the transfer only becomes fully effective in practice once it is registered.
Joint stock companies
In a joint stock company, the process depends on whether share certificates have been issued:
- Issued registered share certificates are generally transferred by endorsement and delivery of the certificate, and the transfer is recorded in the share ledger.
- Where no share certificates have been issued, shares are generally transferred under the general rules on assignment of claims, by written agreement, and recorded in the share ledger.
- Bearer shares must be notified to the Central Registry Agency (MKK), and their holders generally cannot exercise shareholder rights against the company without that notification.
- If the articles restrict the transfer of registered shares, board approval is required, and the board may refuse on grounds set out in the articles and the law.
- Shares of companies listed on Borsa Istanbul are transferred through the capital markets system and are subject to capital markets rules, including possible mandatory tender offers.
Share transfers in joint stock companies are not generally registered with the trade registry, except in specific cases, such as where a single shareholder company is involved. See our international guide to share transfers in Turkish joint stock companies.
Approvals and notifications
Merger control by the Competition Authority
Acquisitions of control and the creation of full-function joint ventures must be notified to the Turkish Competition Authority (Rekabet Kurumu) if the parties' turnovers exceed the thresholds in Communiqué No. 2010/4, as amended. The thresholds are expressed in Turkish lira and have been revised over time. They take into account the parties' turnover in Turkey and worldwide, and certain technology undertakings are treated specially.
Notifiable transactions must not be completed before clearance (the standstill obligation). Closing without clearance ("gun-jumping") can lead to administrative fines, and an anti-competitive transaction may be prohibited or cleared subject to conditions. Even transactions with limited Turkish nexus can be notifiable, so international deals should check Turkish merger control early.
Sector-specific approvals
Changes of control in regulated sectors may require prior approval or notification. Examples include banking and financial services, insurance, capital markets, energy, telecommunications, broadcasting and aviation. These approvals can significantly affect the deal timetable.
Foreign direct investment reporting
The Foreign Direct Investment Law does not generally require approval for foreign acquisitions. However, companies with foreign capital have reporting obligations to the Ministry of Industry and Technology, including providing information on share transfers to foreign investors and periodic activity information, through the ministry's electronic system.
Real estate owned by the target
If a Turkish company that owns real estate becomes a "foreign-capital company" through the acquisition, Article 36 of the Land Registry Law and its implementing regulation may require an approval or notification process for the real estate. There are restrictions in military and security zones. This should be checked in due diligence and built into the timetable. See our guide on real estate acquisition by foreign-capitalised entities.
The share purchase agreement: Turkish-law points
International investors often want a share purchase agreement (SPA) on familiar terms, and many Turkish deals use English-language agreements with international features. Several Turkish-law points affect how these terms work in practice.
- Governing law and disputes. Parties to a cross-border SPA can often choose foreign law and international arbitration. However, the share transfer formalities, corporate approvals and registrations are generally governed by Turkish law. Awards made outside Turkey generally have to be recognised by a Turkish court before they can be enforced there. See our article on enforcement of international arbitration awards in Turkey.
- Price mechanisms. Completion accounts and locked-box structures are both used. Currency rules and inflation make the choice of price currency and adjustment mechanisms important.
- Warranties and indemnities. Turkish law treats representations and warranties differently from common law, and statutory sale-law remedies may apply alongside the contract unless validly limited or excluded, with strict notice requirements. SPAs commonly include specific indemnities for known risks such as tax, SGK and employment claims.
- Security for claims. Escrow arrangements, holdbacks and bank guarantees are common, particularly where the seller is an individual or a family group.
- Warranty and indemnity insurance is available for some Turkish deals, though less common than in Western European markets, and insurers will usually exclude known issues.
- Material adverse change and conditions. Merger control, sector approvals and real estate approvals are typical conditions to closing.
- Earn-outs. These are used where the parties disagree on value, but they need careful drafting of accounting rules, control of the business and dispute resolution.
For more background, see our article on mergers and acquisitions in Turkish law.
Joint ventures with a Turkish partner
A joint venture can be contractual (a cooperation agreement without a new entity) or corporate (a jointly owned company). Corporate joint ventures in Turkey usually use a joint stock company, which offers more flexibility for governance and investor rights.
Shareholders' agreement and articles of association
One of the most important Turkish-law points is the relationship between the shareholders' agreement and the articles of association. A shareholders' agreement is generally a contract between the shareholders. It is not automatically binding on the company itself, or on third parties, unless its terms are also reflected in the articles. A shareholder who breaches the agreement may be liable to the other shareholders, but a corporate act taken in breach of the agreement may still be valid at company level.
In practice, investors therefore include key terms in the articles wherever Turkish company law allows, for example:
- the number of board members each party may nominate, using privileged shares where permitted;
- reserved matters requiring a higher quorum or a particular party's vote;
- restrictions on the transfer of registered shares;
- pre-emption and approval rights.
See our article on the importance of a well-drafted shareholders' agreement and our shareholder and governance advisory page.
Governance and deadlock
Typical joint venture provisions cover board composition, reserved matters, information rights, business plans and budgets, related-party transactions and dividend policy. In a 50:50 venture, a deadlock mechanism is essential. Options include escalation to senior management, mediation, a "Russian roulette" or "Texas shoot-out" buy-sell mechanism, or as a last resort dissolution. The mechanism must be workable under Turkish company law and enforceable through the corporate documents.
Exit rights
Joint venture agreements usually include:
- Tag-along and drag-along rights, so that minority and majority shareholders can sell together;
- Call and put options, for example on a change of control of a party, on deadlock or after a lock-up period;
- Rights of first refusal or first offer, reflected in the articles where possible;
- Valuation mechanisms for option exercises, often based on independent valuation.
Enforcing these rights may ultimately depend on Turkish courts or arbitral tribunals ordering a share transfer, so the drafting and the corporate documents need to support them.
Tax points in brief
Tax structuring should be considered before the deal structure is fixed. Points that commonly arise include:
- Stamp duty on transaction documents, which depends on how agreements are drafted, the amounts stated and where they are signed. Careful drafting can affect the cost.
- Capital gains on the sale of shares are generally taxable, with the treatment depending on whether the seller is an individual or a company, resident or non-resident. Exemptions may be available depending on the seller and the holding period: for example, Turkish corporate sellers may be partly exempt on shares held for at least two years, and individuals' gains on joint stock company shares held for more than two years are generally exempt, subject to conditions that change from time to time. Non-resident sellers may benefit from double tax treaties.
- Historic tax exposures remain with the company in a share deal, which is why tax due diligence and indemnities matter.
- Asset deals can carry VAT, stamp duty and title deed fees on transferred assets, and in some cases joint liability for the seller's tax debts.
See the tax guide for the main Turkish taxes.
After closing: integration steps
Common post-closing steps include:
- registering the share transfer where required, updating the share ledger and making any trade registry filings;
- appointing new board members or managers and updating authorised signatories through a new signature circular;
- updating bank mandates and online banking authorisations (see opening a corporate bank account);
- filing foreign direct investment information with the ministry;
- aligning policies on compliance, data protection, anti-bribery and sanctions;
- integrating payroll, HR and reporting systems.
In an asset or business transfer, Article 6 of the Labour Law (No. 4857) generally provides that employment contracts transfer automatically to the buyer with all rights and obligations. The seller and the buyer are jointly liable for obligations that arose before the transfer and are due at the transfer date, with the seller's liability limited in time. In a share deal, the employer does not change, so employment contracts continue unaffected. See termination and offboarding for restructuring after closing.
Indicative deal timeline
| Phase | Often takes | Notes |
|---|---|---|
| Preliminary talks, NDA and letter of intent | 2–6 weeks | Exclusivity and confidentiality |
| Due diligence | 3–8 weeks | Depends on the target's size and the quality of its records |
| SPA or JV agreement negotiation | 3–8 weeks | Often in parallel with due diligence |
| Competition Authority clearance | Around 1–3 months for simpler cases, longer for complex ones | Only if the thresholds are met |
| Sector or real estate approvals | Varies widely | Can be the longest step |
| Closing and post-closing filings | 1–4 weeks | Notary, board and registry steps |
These timings are indicative. Regulatory reviews and negotiations can take considerably longer.
Frequently asked questions
Can a foreign company buy 100% of a Turkish company?
Generally yes. The Foreign Direct Investment Law allows foreign investors to acquire Turkish companies on the same terms as Turkish investors. Regulated sectors such as banking, insurance, energy, telecommunications, broadcasting and aviation may require prior approval, and real estate owned by the target may trigger a separate approval process.
Is a share deal or an asset deal better in Turkey?
It depends on the target and the risks. A share deal is simpler to execute because the company keeps its contracts, licences and employees, but all historic liabilities stay with the company. An asset deal allows the buyer to choose what it takes, but contracts and permits may not transfer automatically, and where a workplace or part of it is transferred, employment contracts generally transfer automatically by law.
How are shares in a Turkish limited company transferred?
Generally by a written share transfer agreement with notarised signatures, approval of the general assembly unless the articles provide otherwise, and registration with the trade registry. The articles may impose further restrictions. The transfer is also recorded in the share ledger.
How are shares in a Turkish joint stock company transferred?
Where registered share certificates have been issued, shares are generally transferred by endorsement and delivery of the certificates and recorded in the share ledger. Where no certificates have been issued, the general rules on assignment apply. If the articles restrict transfers, board approval is required. See our article on share transfers in Turkish joint stock companies.
Does my acquisition need Turkish merger control approval?
It does if the transaction involves a change of control, or creates a full-function joint venture, and the parties' turnovers exceed the thresholds in Communiqué No. 2010/4 as amended. Notifiable deals must not close before clearance. Fines can apply for closing without clearance, so check early even for international deals with limited Turkish activity.
What are the most common risks found in Turkish due diligence?
Frequent findings include unregistered employees or wages not fully declared to the SGK, unpaid overtime and leave liabilities, tax exposures, missing workplace licences, property without proper occupancy permits, and informal related-party arrangements. These are usually addressed through price adjustments, specific indemnities or pre-closing remediation.
Is a shareholders' agreement enforceable in Turkey?
A shareholders' agreement is generally enforceable as a contract between the parties. However, it does not automatically bind the company or third parties unless its terms are reflected in the articles of association. Investors therefore put key rights, such as board nomination and transfer restrictions, into the articles where Turkish law allows.
Can a foreign investor have veto rights in a Turkish joint venture company?
Generally yes, through reserved matters requiring higher quorums or the consent of a particular shareholder, and through privileged shares where permitted. These rights should be included in the articles of association to be effective at company level. See our shareholder and governance advisory page.
How can a deadlock in a 50:50 joint venture be resolved?
Common mechanisms include escalation to senior management, mediation, buy-sell mechanisms such as "Russian roulette" or "Texas shoot-out" clauses, and, as a last resort, dissolution. The chosen mechanism should be supported by the corporate documents so that it can actually be implemented under Turkish law.
Do employees transfer automatically when I buy a business in Turkey?
In an asset or business transfer, Article 6 of the Labour Law generally provides that employment contracts transfer automatically to the buyer with all rights and obligations, and the seller and buyer share liability for prior obligations for a limited period. In a share deal, the employer does not change, so contracts continue unaffected.
Is a foreign governing law possible for a Turkish acquisition?
Parties can often choose a foreign law and international arbitration for the share purchase agreement. However, the share transfer formalities, corporate approvals and registrations are generally governed by Turkish law. Awards made outside Turkey generally have to be recognised by a Turkish court before they can be enforced there.
What taxes arise on a share acquisition in Turkey?
Points to consider include stamp duty on transaction documents, capital gains tax for the seller (with possible exemptions depending on the seller and the holding period, for both corporate sellers and individuals, subject to conditions), and the historic tax exposures that stay with the company. Take advice on the structure before signing. See the tax guide.
This guide is general information about Turkish law and practice at the date shown above. It is not legal, tax or customs advice and should not be relied on as such. Rules, thresholds and procedures in Türkiye change frequently and their application depends on the facts, so take advice on your own circumstances before acting. Advice on Turkish law is provided through lawyers qualified in Türkiye.