Introduction
Financial institutions in Turkey play a vital role in corporate finance, consumer finance, trade finance, SME funding, equipment acquisition, receivables financing and alternative credit structures. Although banks are the most visible actors in the Turkish financial system, non-bank financial institutions such as financial leasing companies, factoring companies and financing companies are also essential parts of the market.
These institutions provide financing solutions that differ from ordinary bank lending. A financial leasing company enables businesses to use productive assets without purchasing them outright. A factoring company allows businesses to obtain liquidity by transferring invoice-based receivables. A financing company provides credit for the acquisition of goods or services, often in retail, vehicle, consumer or commercial finance structures.
The main legal framework governing these institutions is Law No. 6361 on Financial Leasing, Factoring, Financing and Saving Financing Companies. The law regulates the incorporation and operating principles of financial leasing, factoring, financing and saving financing companies operating as financial institutions, and also regulates the principles and procedures applicable to financial leasing, factoring and financing agreements.
This article explains the legal framework for leasing, factoring and financing companies in Turkey, focusing on licensing, BRSA supervision, capital requirements, corporate governance, contracts, operational rules, customer protection, enforcement risks and dispute resolution.
1. Non-Bank Financial Institutions in Turkey
Non-bank financial institutions are regulated financial actors that provide financing services without operating as ordinary deposit banks. In Turkey, financial leasing, factoring and financing companies are regulated under a specific statutory regime. They are not ordinary commercial companies free to provide credit-like products without authorization.
The legal distinction is important. A company selling goods on deferred payment terms is not automatically a financing company. A business assigning receivables privately is not automatically a factoring company. A company renting machinery is not automatically a financial leasing company. However, where the activity is carried out as a regulated financing business, the company must comply with Law No. 6361 and relevant BRSA regulations.
The Turkish framework aims to protect market stability, ensure institutional supervision, prevent informal credit activity, protect customers and create reliable financing channels outside the banking sector.
2. Main Legal Framework: Law No. 6361
Law No. 6361 is the core statute for financial leasing, factoring and financing companies in Turkey. It applies to financial leasing, factoring and financing companies established in Turkey and includes financial leasing transactions carried out by participation banks and development and investment banks, as well as factoring and financing transactions carried out by banks.
The scope of the law is therefore broad. It does not only regulate independent financial leasing, factoring and financing companies. It also affects banks when they carry out certain transactions that fall within the law’s subject matter.
Law No. 6361 covers establishment, operating permission, corporate governance, contracts, financial reporting, accounting, supervision, penalties, mergers, liquidation and various sector-specific rules. It is supported by secondary legislation, especially the Regulation on Principles for Establishment and Operations of Financial Leasing, Factoring and Financing Companies, which sets procedures and principles regarding establishment and working principles of these companies.
3. BRSA Supervision
The Banking Regulation and Supervision Agency, known as the BRSA or BDDK, is the primary authority supervising financial leasing, factoring and financing companies in Turkey. These companies operate in a regulated financial market and are subject to BRSA licensing, supervision, reporting and compliance requirements.
The BRSA’s role is critical because these institutions handle credit risk, customer data, receivables, contracts, collateral, consumer finance and large volumes of financial records. Without regulatory supervision, the sector could be exposed to abusive lending practices, fictitious receivables, weak capital structures, unlicensed operations and consumer harm.
The regulatory system requires these companies to obtain establishment and operating permissions, maintain financial soundness, comply with accounting rules, submit information to the regulator, preserve documentation and operate within the scope of their permitted activities.
4. Establishment Requirements
Financial leasing, factoring and financing companies must be established in compliance with Law No. 6361 and BRSA regulations. These are not ordinary incorporations. A company cannot merely register at the trade registry and begin regulated financing activity.
Law No. 6361 requires companies within its scope to be established as joint stock companies, to issue registered shares against cash, to include the relevant field of activity in their trade name, to have qualified founders and management, and to maintain a transparent ownership structure suitable for regulatory supervision. The law also requires a business plan, financial projections and organizational structure information to be submitted during the permission process.
The regulatory approach is clear: financial institutions must have sufficient capital, qualified management, transparent ownership, proper organization and credible business planning before entering the market.
5. Operating Permission
Obtaining establishment permission is not enough. A company must also obtain an operating license before beginning activities. BRSA may require additional information and documents, and the operating license becomes valid after publication in the Official Gazette. The relevant regulation provides procedures for establishment and operation and allows the Agency to request additional information and documents where necessary.
Operating permission is important because a company may be legally incorporated but not yet authorized to conduct regulated financing business. Investors, lenders, customers and counterparties should verify that the company has obtained the necessary operating authorization.
In practice, operating permission may require proof that the company has established its internal organization, information systems, accounting infrastructure, qualified personnel, risk controls, reporting mechanisms and legal documentation.
6. Capital and Financial Soundness
Financial leasing, factoring and financing companies must satisfy minimum capital and financial soundness requirements. These requirements are designed to ensure that companies entering the market have sufficient financial capacity to operate safely.
Law No. 6361 requires paid-in capital and authorizes regulatory oversight over capital adequacy and financial structure. The law has been amended over time, and the minimum capital framework should always be checked under the current legislation and BRSA practice before establishment or acquisition of such a company.
Capital is not a mere formality. Leasing companies acquire assets and finance long-term use. Factoring companies advance funds against receivables. Financing companies extend credit to consumers or businesses. Weak capital structure may create risk for customers, creditors and the financial system.
7. Corporate Governance and Management Qualifications
The Turkish regulatory framework requires qualified founders, board members and senior management. Financial institutions must be managed by persons who satisfy integrity, experience and professional qualification standards.
This requirement protects the sector against irresponsible management, fraud, excessive risk-taking and opaque ownership structures. It also supports BRSA’s ability to supervise the institution effectively.
Corporate governance obligations may include board oversight, internal policies, risk management procedures, internal controls, compliance systems, accounting systems and documentation standards. Even if these institutions are not deposit banks, they still operate as financial institutions and must maintain professional governance.
8. Financial Leasing Companies
Financial leasing companies provide financing by acquiring or procuring an asset and transferring possession and use to the lessee under a financial leasing agreement. The lessee pays leasing installments and may have a purchase option or other end-of-term rights depending on the contract.
Law No. 6361 defines financial leasing by reference to economic characteristics such as transfer of possession, purchase option, coverage of substantial economic life or present value of payments. The law also identifies authorized lessors, including financial leasing companies, participation banks, and development and investment banks.
Financial leasing is widely used for machinery, vehicles, construction equipment, medical devices, technology systems, production lines, commercial equipment and real estate-related financing. It allows businesses to access productive assets without immediate full purchase.
9. Financial Leasing Agreements
A financial leasing agreement must clearly identify the leased asset, parties, payment schedule, delivery procedure, insurance, maintenance, repair, risk of loss, purchase option, termination rights, default consequences and return obligations.
Under Law No. 6361, the lessor generally procures or acquires the asset selected or requested by the lessee and transfers possession to the lessee in return for lease payments. The lessee enjoys the economic use of the asset, while ownership usually remains with the lessor during the lease term.
This separation between ownership and possession is central. If the lessee defaults, the lessor may seek return of the asset and recovery of losses according to the law and contract. If the lessee enters enforcement or bankruptcy proceedings, the status of leased assets must be handled carefully because the asset may belong to the lessor rather than the lessee’s estate.
10. Factoring Companies
Factoring companies provide financing, collection and risk management services based on receivables arising from the sale of goods or services. A business with deferred-payment invoices may transfer those receivables to a factoring company and receive liquidity before maturity.
Law No. 6361 defines factoring contracts by reference to the takeover of receivables arising from sales of goods or services and documented according to procedures determined by the regulator, including financing, collection, account recording or guarantee functions.
Factoring is especially important for SMEs because it allows businesses to convert trade receivables into working capital. However, Turkish law requires factoring to be based on genuine receivables documented by invoices or invoice-equivalent documents. This prevents the misuse of factoring as disguised unsecured lending.
11. Invoice-Based Nature of Factoring
One of the most important legal principles in Turkish factoring law is the invoice-based nature of factoring. The factoring company should not finance fictitious, undocumented or duplicate receivables. The receivable must arise from a real sale of goods or services.
Law No. 6361 includes restrictions designed to prevent factoring companies from acquiring or collecting receivables not documented by invoices or invoice-equivalent documents, even if negotiable instruments exist, subject to regulatory principles.
This requirement is crucial in litigation. If a debtor objects that the invoice is fictitious, cancelled, duplicated or not linked to real delivery, the factoring company may face collection difficulties. Therefore, factoring companies must conduct customer due diligence, invoice verification and receivable confirmation before advancing funds.
12. Financing Companies
Financing companies provide credit for the acquisition of goods or services. They are especially relevant in consumer finance, vehicle finance, retail finance, commercial equipment finance and point-of-sale financing structures.
A financing company may provide funding directly to the seller or service provider on behalf of the customer, depending on the structure. Unlike a bank, a financing company does not operate as a deposit-taking institution. Its activity is limited to financing transactions permitted under Law No. 6361 and related regulations.
Financing companies are important for markets where customers need installment-based acquisition of goods or services. However, where the customer is a consumer, consumer protection law may also apply. Therefore, financing companies must manage disclosure, interest, fees, installment plans, insurance, default and collection processes carefully.
13. Financing Agreements
A financing agreement should regulate the financed product or service, credit amount, payment schedule, interest or financing cost, fees, default interest, early payment, cancellation, refund, consumer rights, collateral, guarantees and dispute resolution.
If the financing is linked to a specific purchase, disputes may arise where the seller fails to deliver, the goods are defective, the consumer withdraws from the contract or the underlying sale is cancelled. The financing company should structure its documentation to address these connected risks.
Where financing is offered through dealers, retailers or digital platforms, the financing company must ensure that intermediaries provide accurate information and do not mislead customers. Mis-selling at the point of sale may later create consumer disputes and regulatory risk.
14. Savings Financing Companies
Although the requested topic focuses on leasing, factoring and financing companies, Law No. 6361 now also includes saving financing companies. With later amendments, saving financing companies were brought under BRSA regulation and supervision. BRSA publicly explained that, following amendments made to Law No. 6361 by Law No. 7292, regulation and supervision of saving financing companies would be carried out by the Agency.
This is relevant because the title of Law No. 6361 now includes saving financing companies, and the broader non-bank finance sector is supervised within the same legislative framework. However, financial leasing, factoring and financing companies remain distinct categories with their own contractual and operational characteristics.
15. Accounting and Financial Reporting
Financial leasing, factoring and financing companies must comply with accounting and financial reporting rules. BRSA has issued a regulation governing accounting practices and financial statements of these companies, prepared based on Law No. 6361.
Accurate accounting is essential because these institutions carry receivables, leases, financing exposures, collateral, provisions, commissions, interest income and risk assets. Financial statements must reflect the institution’s financial position correctly.
Poor accounting may create regulatory sanctions, investor disputes, tax problems, credit risk mismanagement and misleading financial reporting. Customers and lenders dealing with such institutions may also request financial statements to assess institutional reliability.
16. Information Systems and Remote Contracting
Digitalization has become increasingly important for Turkish financial institutions. BRSA has issued rules on remote identification methods and establishment of contractual relationships in electronic environments for financial leasing, factoring, financing and savings finance companies. The regulation’s purpose is to determine procedures and principles for remote identification methods and electronic contractual relationships used by these companies.
This is important for digital finance platforms, online factoring, remote consumer finance, digital leasing applications and electronic onboarding. Remote contracting can improve efficiency, but it creates risks relating to identity verification, fraud, electronic evidence, data protection, consent, signature validity and customer authentication.
Companies using digital channels must preserve logs, consent records, identity verification evidence, transaction timestamps and contractual documents. In litigation, electronic records may become decisive.
17. Customer Protection and Transparency
Financial institutions must provide clear information to customers. This is especially important in consumer financing, vehicle financing, retail finance and remote digital contracting.
Customers should understand the total cost of financing, payment schedule, interest, fees, default consequences, insurance obligations, early payment options, cancellation rights and complaint routes. If the customer is a consumer, consumer protection law may impose additional disclosure and unfair term rules.
Transparency is not only a customer service issue. It reduces litigation risk. Many disputes arise because the customer claims that financing costs, default interest, insurance or early payment rules were not properly explained.
18. Collateral and Security
Financial leasing, factoring and financing companies often use collateral to reduce credit risk. Leasing companies rely heavily on ownership of the leased asset. Factoring companies rely on assigned receivables, invoices, debtor notification and sometimes negotiable instruments or guarantees. Financing companies may use pledges, sureties, vehicle registration, mortgages, account security or other collateral depending on the product.
Collateral documentation must be legally valid and enforceable. A guarantee may fail if proper form requirements are not satisfied. A receivables assignment may be ineffective in practice if the debtor is not notified. A pledged asset may be difficult to enforce if not properly described or registered.
The security package should be designed at the beginning of the transaction, not after default.
19. Default and Enforcement
Default rules differ depending on the type of institution and contract.
In financial leasing, default may lead to termination, return of the leased asset, sale of the asset and calculation of the remaining debt or loss. In factoring, default may involve non-payment by the debtor, recourse to the customer, enforcement of bills of exchange, or claims based on invalid receivables. In financing transactions, default may lead to acceleration, enforcement proceedings, collateral realization and claims against guarantors.
The institution must follow contractual and statutory procedures. Notices, cure periods, debt calculations, collateral enforcement and consumer protection rules must be handled carefully. A procedural error may weaken the institution’s claim or create compensation risk.
20. Common Disputes Involving Financial Institutions
Disputes involving financial leasing companies often concern defective assets, delivery delay, unpaid leasing installments, insurance, termination, asset return, sale price after termination and third-party attachments.
Factoring disputes often concern invoice validity, debtor objections, non-delivery of goods, duplicate invoices, cancelled invoices, recourse claims, negotiable instruments, debtor notification and fraud.
Financing company disputes often concern payment schedule, interest calculation, early payment, cancellation of underlying sale, consumer withdrawal, defective goods, default interest, insurance and collection practices.
These disputes are usually document-heavy. Contracts, invoices, delivery notes, payment records, notices, registry records, insurance documents, electronic logs and correspondence determine the outcome.
21. Compliance and Internal Controls
Financial leasing, factoring and financing companies must maintain internal procedures to manage operational, credit, legal and compliance risk. Even though they are not banks, they are regulated financial institutions and must operate with professional standards.
Compliance areas include customer identification, contract documentation, receivable verification, credit assessment, collateral control, accounting, financial reporting, information security, data protection, complaints management and regulatory reporting.
Factoring companies, in particular, must be alert to fictitious receivables, duplicate invoice financing and fraud. Financing companies must manage consumer disclosure and point-of-sale risks. Leasing companies must monitor asset ownership, insurance, registration and asset recovery.
22. Data Protection and Confidentiality
These institutions process significant customer data, including identity information, financial records, invoices, payment schedules, account data, collateral documents and sometimes consumer behavior data. Personal Data Protection Law No. 6698 may apply where natural person data is processed.
Remote contracting and digital finance increase the importance of cybersecurity and data protection. Companies should apply access controls, encryption, data minimization, retention policies, vendor controls, breach response procedures and privacy notices.
Confidentiality is also important for corporate customers. Factoring companies may access sensitive customer invoices and trade receivables. Leasing companies may know asset acquisition plans. Financing companies may process consumer and merchant data. Unauthorized disclosure may create legal and commercial liability.
23. Acquisition and Share Transfer of Financial Institutions
Acquiring or investing in a financial leasing, factoring or financing company requires regulatory analysis. Share transfers, ownership structure changes and participation in other entities may require BRSA approval depending on the structure and applicable rules.
A 2025 legal update noted amendments to the regulation affecting financial leasing, factoring and financing companies, including restrictions and approval requirements concerning establishing or participating in certain credit institutions or financial institutions.
Investors should conduct legal due diligence before acquiring such companies. Due diligence should cover license status, BRSA correspondence, capital adequacy, financial statements, receivables quality, litigation, tax, customer complaints, contracts, AML, data protection, information systems and related-party transactions.
24. Practical Checklist for Leasing Companies
A financial leasing company should:
Verify customer identity and authority.
Identify the leased asset clearly.
Ensure asset ownership and registration are properly documented.
Use detailed leasing agreements.
Confirm insurance coverage.
Monitor payment performance.
Preserve delivery and return protocols.
Send default notices properly.
Calculate post-termination debt accurately.
Protect the asset against third-party attachment.
Maintain accounting and regulatory reporting compliance.
25. Practical Checklist for Factoring Companies
A factoring company should:
Verify the customer and debtor.
Confirm that receivables arise from real sales of goods or services.
Check invoices and invoice-equivalent documents.
Prevent duplicate invoice financing.
Obtain assignment documents.
Notify debtors where necessary.
Review debtor objections.
Maintain records of advances and collections.
Define recourse and non-recourse terms clearly.
Monitor fraud indicators.
Preserve evidence for enforcement.
26. Practical Checklist for Financing Companies
A financing company should:
Verify customer identity.
Confirm the financed goods or services.
Use clear financing agreements.
Disclose total cost of financing.
Coordinate with dealers or merchants carefully.
Monitor consumer protection obligations.
Preserve electronic consent and contract records.
Calculate early payment and default accurately.
Manage collateral and guarantees.
Handle complaints transparently.
Maintain regulatory reporting and accounting records.
27. Why Legal Support Is Important
Financial leasing, factoring and financing companies operate in a regulated and document-sensitive environment. Legal support is essential for establishment applications, BRSA permissions, contract drafting, digital onboarding, customer terms, receivables assignment, collateral structuring, consumer compliance, data protection, enforcement, dispute resolution and regulatory correspondence.
A Turkish finance lawyer may assist with licensing, corporate governance, shareholder changes, standard contract templates, factoring receivable structures, leasing default procedures, financing company consumer contracts, internal policies, litigation strategy and compliance audits.
Legal review is especially important before launching new digital products, entering dealer partnerships, acquiring a financial institution, expanding into consumer finance or restructuring distressed receivables.
Conclusion
Financial institutions in Turkey, including financial leasing companies, factoring companies and financing companies, are central to non-bank finance. They provide businesses and consumers with alternatives to ordinary bank loans, support trade liquidity, facilitate asset acquisition and expand access to finance.
However, these institutions operate under a strict legal framework. Law No. 6361, BRSA regulations, accounting rules, digital contracting rules, consumer protection, collateral law, data protection and enforcement law all shape their activities. A company cannot safely conduct leasing, factoring or financing activity without understanding the regulatory perimeter and obtaining required permissions.
Financial leasing companies must manage asset ownership, possession, insurance, default and return. Factoring companies must ensure that receivables are real, invoice-based and enforceable. Financing companies must provide transparent credit structures and comply with consumer and commercial finance rules.
For customers, these institutions offer valuable financing tools but require careful contract review. For investors, the sector offers opportunities but demands regulatory due diligence. For the institutions themselves, sustainable operation depends on capital strength, compliance, documentation, internal controls and proper risk management.
In Turkish finance law, leasing, factoring and financing companies are not secondary actors. They are regulated financial institutions with their own legal identity, market function and compliance obligations. A properly structured institution can support economic growth and liquidity; a poorly managed one can create serious legal, regulatory and financial risk.
Yanıt yok