One of the most common questions asked by international entrepreneurs considering entering the Turkish market is:

“Do I need a Turkish citizen as my business partner to establish a company in Türkiye?”

For most businesses, the answer is straightforward:

No.

A foreign individual or foreign company can generally establish and own 100% of a Turkish company without having a Turkish shareholder.

Türkiye’s foreign direct investment system is based on the principle of equal treatment between foreign and domestic investors. Foreign investors may therefore establish companies, purchase shares in existing Turkish companies and, in most sectors, own all of the company’s shares.

The Turkish government’s current investment guidance expressly confirms that foreign investors may establish companies with 100% foreign shareholding or acquire all shares of an existing Turkish company.

However, the fact that 100% foreign ownership is generally permitted does not mean that every investment is completely unrestricted.

Sector-specific licences, foreign ownership restrictions, work permit rules, real estate restrictions, banking requirements and regulatory approvals may still become relevant depending on the company’s activities.

This article explains the principal legal issues foreign entrepreneurs and investors should consider before establishing a wholly foreign-owned company in Türkiye.

1. Can a Foreigner Own 100% of a Turkish Company?

Yes.

Under Law No. 4875 on Foreign Direct Investments, foreign investors are generally free to make direct investments in Türkiye and are entitled to equal treatment with domestic investors unless otherwise provided by international agreements or special legislation.

The law replaced the former approval-oriented foreign investment regime with a substantially more liberal system.

As a general rule, this means that a foreign investor can:

• establish a new Turkish company;
• own 100% of its shares;
• purchase 100% of an existing Turkish company;
• become a minority shareholder;
• become the controlling shareholder;
• acquire shares from Turkish shareholders;
• increase the company’s capital;
• establish a Turkish subsidiary of a foreign company; or
• participate in a Turkish startup investment.

The official investment guidance confirms that the conditions applicable to establishing companies and transferring shares are generally the same for domestic and international investors.

Therefore, for an ordinary software company, consultancy business, trading company, manufacturing company, SaaS startup or e-commerce business, there will usually be no requirement to include a Turkish shareholder simply because the investor is foreign.

2. Is a Turkish Partner Required to Establish a Company?

Generally, no Turkish partner is required.

For example:

A British entrepreneur may establish a Turkish limited liability company and own 100% of the shares.

A German technology company may establish a wholly owned Turkish subsidiary.

A US startup may establish a Turkish joint stock company with the US parent company holding all shares.

A UAE investor may acquire 100% of an existing Turkish company.

A Swedish company may establish a Turkish subsidiary without appointing a Turkish shareholder.

The nationality of the shareholder does not normally change this principle.

Foreign investors should therefore be cautious if they are told that they must give shares to a local nominee merely to establish a business in Türkiye.

For most ordinary businesses, this is legally unnecessary.

3. Can the Sole Shareholder Be a Foreign Individual?

Yes.

Both Turkish limited liability companies and joint stock companies can generally be established with a single shareholder.

That shareholder may be a foreign individual.

For example, a French citizen may personally own 100% of the shares of a Turkish limited liability company.

Similarly, an Italian entrepreneur may personally own all shares of a Turkish joint stock company.

There is no general legal requirement for the sole shareholder to:

• be a Turkish citizen;
• permanently reside in Türkiye; or
• have a Turkish business partner.

Separate rules concerning residence and work authorization should nevertheless be considered if that person intends to actively work in Türkiye.

4. Can a Foreign Company Own 100% of a Turkish Company?

Yes.

A foreign legal entity may generally establish a wholly owned subsidiary in Türkiye.

For example:

UK Parent Company → 100% Turkish Subsidiary

or:

German GmbH → 100% Turkish A.Ş.

or:

Swedish AB → 100% Turkish Ltd. Şti.

This structure is frequently used by international technology companies, manufacturers, international trading businesses and investors entering the Turkish market.

The foreign parent company will usually need to provide various corporate documents showing matters such as:

• its legal existence;
• current registration;
• persons authorized to represent it;
• its decision to establish or acquire the Turkish company; and
• authorization of the individual handling the Turkish transaction.

Foreign corporate documents generally need to comply with Turkish legalization and translation requirements.

5. Which Company Type Can Be 100% Foreign-Owned?

The two corporate forms most commonly selected by foreign investors are:

Limited Liability Company – Limited Şirket

A limited liability company may have between one and fifty shareholders.

The shareholders can generally be:

• Turkish individuals;
• foreign individuals;
• Turkish companies;
• foreign companies; or
• a combination of these.

Therefore, a Turkish limited company may be completely foreign-owned.

The current minimum share capital is TRY 50,000.

Limited companies are frequently preferred for:

• consulting businesses;
• software development companies;
• e-commerce businesses;
• SaaS companies;
• import-export businesses;
• agencies;
• subsidiaries;
• service companies; and
• small and medium-sized businesses.

Joint Stock Company – Anonim Şirket

A joint stock company may also have a single shareholder and may be 100% foreign-owned.

The current minimum share capital is TRY 250,000.

For non-public joint stock companies using the registered capital system, the minimum initial capital is TRY 500,000.

A joint stock company may be particularly attractive where the business expects:

• venture capital investment;
• institutional investors;
• multiple financing rounds;
• future share transfers;
• an M&A transaction;
• more complex investor rights; or
• a future exit.

For technology startups seeking investment, an A.Ş. will often deserve serious consideration.

6. Can a Turkish Startup Be 100% Foreign-Owned?

Yes.

A startup incorporated under Turkish law can generally be entirely owned by foreign founders or investors.

There is no general rule requiring startups to reserve a percentage of their shares for Turkish citizens.

For example, three founders based in London could establish a Turkish technology company with the following ownership structure:

• Founder A – 40%
• Founder B – 35%
• Founder C – 25%

All three founders could be foreign nationals.

Alternatively, a foreign holding company could own 100% of the startup.

The appropriate structure should nevertheless be selected after considering:

• future investment rounds;
• tax planning;
• intellectual property ownership;
• employee stock options;
• founder vesting;
• investor rights;
• dilution;
• potential exit arrangements; and
• cross-border payment flows.

7. Are Foreign Shareholders Treated Differently from Turkish Shareholders?

As a general principle, foreign investors are entitled to equal treatment.

Article 3 of the Foreign Direct Investment Law expressly establishes freedom to invest and national treatment, subject to exceptions arising from international agreements or special legislation.

Therefore, once a Turkish company is validly established, foreign ownership does not normally place the company outside the Turkish corporate law system.

The company remains a Turkish legal entity.

For example, a Turkish limited company owned entirely by German shareholders is still a Turkish limited company.

It remains subject to Turkish rules concerning:

• corporate governance;
• accounting;
• taxation;
• employment;
• social security;
• competition law;
• data protection;
• consumer protection; and
• commercial law.

The company does not become a “German company” simply because its shareholders are German.

8. Does 100% Foreign Ownership Require Government Approval?

For most ordinary commercial activities, there is no general foreign investment approval requirement solely because the shareholders are foreigners.

Türkiye’s foreign investment framework is based largely on a notification rather than general prior-approval system.

However, this does not eliminate sector-specific regulation.

An investment may still require permission from a relevant regulatory authority where the company operates in a regulated field.

This distinction is extremely important:

Foreign ownership approval and business activity licensing are not necessarily the same issue.

A company may be legally incorporated but still be prohibited from conducting a regulated business until the relevant licence is obtained.

9. Are There Sectors Where 100% Foreign Ownership May Be Restricted?

Yes.

The general equal-treatment principle is subject to exceptions contained in special legislation.

Türkiye’s official investment legal guide specifically notes that foreign investment restrictions may apply in certain strategic sectors, including areas such as:

• television broadcasting;
• maritime activities; and
• civil aviation.

Sector-specific restrictions and regulatory approvals can therefore override the general freedom of foreign ownership.

Additional regulatory considerations can arise in sectors including:

• banking;
• insurance;
• payment services;
• electronic money;
• capital markets;
• crypto asset services;
• energy;
• broadcasting;
• aviation;
• maritime transportation; and
• certain defence-related activities.

A foreign investor should therefore conduct regulatory due diligence before acquiring a significant interest in a company operating in a regulated sector.

10. Can a 100% Foreign-Owned Company Buy Real Estate in Türkiye?

This issue requires separate analysis.

A company established in Türkiye under Turkish law is a Turkish legal entity even where foreign investors own its shares.

However, special rules apply to acquisitions of real estate by certain companies with foreign shareholders.

Official investment guidance identifies additional procedures particularly where foreign investors own at least 50% of the company or possess rights enabling them to appoint or remove the majority of persons authorized to manage the company.

Such companies may generally acquire real estate in Türkiye where this is connected with the activities specified in their articles of association, but additional procedures and restrictions may apply, especially concerning military or security zones.

Foreign investors planning substantial real estate acquisitions should therefore review the property structure separately from the company incorporation process.

11. Can a Foreigner Be the Manager of a Turkish Limited Company?

Foreign nationality does not generally prevent a person from being appointed as a manager.

However, corporate management and immigration law are separate issues.

A foreign shareholder may therefore be legally appointed as manager of a company while separately needing to assess whether a Turkish work permit is required to actively perform that role in Türkiye.

In limited liability companies, at least one shareholder must generally have management and representation authority.

This means that the corporate structure should be designed carefully where the sole shareholder is a foreign individual.

12. Can a Foreign Person Become a Board Member of a Turkish Joint Stock Company?

Yes, as a general rule.

A joint stock company’s board can include foreign members.

There is generally no requirement under ordinary company law that every board member must be a Turkish citizen.

Furthermore, board membership and share ownership are separate concepts.

A board member does not necessarily have to be a shareholder.

This gives joint stock companies considerable flexibility where the foreign investor intends to appoint:

• professional executives;
• investor representatives;
• independent managers; or
• foreign parent company executives.

Again, applicable work permit rules should be examined independently where a foreign board member will actively work in Türkiye.

13. Does Owning 100% of the Company Give the Foreigner a Work Permit?

No.

This is one of the most important distinctions foreign entrepreneurs need to understand.

Ownership of a Turkish company does not automatically authorize the shareholder to work in Türkiye.

Company law may allow a foreign entrepreneur to own 100% of the business, but immigration and employment legislation separately determine whether that person can actively work in the country.

For example:

A foreign entrepreneur may own 100% of a Turkish software company from abroad without necessarily working physically in Türkiye.

If the same shareholder relocates to Türkiye and actively manages the business, work permit requirements may arise.

For this reason, foreign founders should consider:

1. corporate ownership;
2. residence status; and
3. work authorization

as three related but legally separate issues.

14. Does Owning a Company Automatically Give the Shareholder Residence Rights?

No.

A foreigner does not automatically obtain a Turkish residence permit merely because they establish or purchase a Turkish company.

Company ownership and immigration status are separate.

The investor may therefore need a separate legal basis for residence depending on:

• the period of stay;
• the person’s activities;
• whether they will actively work;
• their nationality; and
• their personal circumstances.

Foreign founders planning to relocate permanently to Türkiye should therefore develop their company formation and immigration strategies together.

15. Does a 100% Foreign-Owned Company Pay More Tax?

Generally, corporate tax treatment is based on the company’s legal and tax status rather than simply the nationality of its shareholders.

A company incorporated in Türkiye is generally subject to Turkish taxation as a Turkish company.

Foreign ownership does not, by itself, create a special higher corporate tax rate.

However, cross-border issues become important where the company makes payments to foreign shareholders or related foreign entities.

These may include:

• dividends;
• royalties;
• interest;
• management fees;
• licence fees;
• service payments; and
• intercompany charges.

Double taxation treaties, withholding tax rules and transfer pricing regulations may then become relevant.

Foreign investors should therefore structure cross-border payments before beginning operations rather than waiting until profits are distributed.

16. Can Profits Be Transferred Abroad?

The Foreign Direct Investment Law provides important protections concerning the transfer of investment-related proceeds abroad.

Foreign investors may generally transfer items including:

• net profits;
• dividends;
• proceeds from the sale of investments;
• liquidation proceeds;
• licence payments;
• management agreement payments; and
• certain loan repayments and interest

through banks or authorized financial institutions, subject to applicable tax and financial regulations.

Accordingly, foreign ownership does not normally mean that profits must remain permanently in Türkiye.

However, dividend distributions must still comply with Turkish corporate and tax law.

17. Can a Foreign Shareholder Sell All of Its Shares?

Generally, yes.

A foreign shareholder may transfer its shares to:

• another foreign investor;
• a Turkish investor;
• another shareholder;
• an institutional investor; or
• an acquiring company.

However, the procedure depends significantly on whether the company is:

• a limited liability company; or
• a joint stock company.

The company’s articles of association and any shareholders’ agreement should also be reviewed.

Restrictions may arise from provisions concerning:

• pre-emption;
• approval rights;
• lock-up periods;
• right of first refusal;
• tag-along;
• drag-along; and
• regulatory approval.

For regulated companies, significant share acquisitions or transfers may require permission from the competent authority.

18. Can a Foreign Investor Own Only a Minority Interest?

Yes.

Foreign investors are not required to own 100%.

They may acquire any agreed ownership percentage, subject to specific sector restrictions.

A foreign investor could therefore acquire:

• 5%;
• 10%;
• 20%;
• 49%;
• 51%;
• 75%; or
• 100%

of a Turkish startup.

However, percentage ownership alone does not determine the investor’s actual level of control.

An investor holding 20% may enjoy substantial contractual rights if the investment documentation provides appropriate protections.

19. How Can a Foreign Minority Investor Protect Its Investment?

Foreign investors taking minority positions should not rely solely on their percentage of share ownership.

A properly drafted shareholders’ agreement can provide additional protection.

Important rights may include:

Reserved Matters

Certain significant company decisions may require the investor’s approval.

These may include:

• new share issuances;
• major borrowings;
• sale of significant assets;
• amendments to the articles;
• related-party transactions;
• acquisition of another business;
• changes to the company’s business activities; and
• liquidation.

Anti-Dilution Rights

These may protect investors against certain future financing rounds.

Pre-Emption Rights

These rights may allow existing investors to participate in future share issuances.

Tag-Along Rights

If the founder sells their shares, minority investors may obtain a right to participate in the sale.

Drag-Along Rights

Major shareholders may be able to require minority shareholders to participate in a company sale under agreed conditions.

Board Representation

The foreign investor may negotiate the right to appoint a board member.

Information Rights

Investors may require periodic financial reporting, budget information and operational data.

These protections are particularly important in startup investments.

20. Can Turkish Founders Dilute a Foreign Investor?

Potentially, yes, if the investment structure does not adequately protect the foreign investor.

For example, the company may carry out a capital increase and issue additional shares.

If the foreign investor does not participate, the investor’s percentage ownership may decrease.

The practical risk can be managed through a combination of:

• statutory shareholder rights;
• articles of association;
• shareholders’ agreements;
• pre-emption rights;
• reserved matters; and
• anti-dilution provisions.

Foreign investors should therefore review potential dilution before signing a term sheet or share subscription agreement.

21. Is a Foreign Shareholder Personally Liable for Company Debts?

The answer depends partly on the company type and the nature of the debt.

Joint Stock Company

Shareholders are generally liable to the company only for the capital they have undertaken to contribute.

The Ministry of Trade similarly describes shareholders in joint stock companies as responsible with their subscribed capital.

Accordingly, ordinary company debts do not automatically become the personal debts of the foreign shareholder merely because the shareholder owns 100% of the shares.

Limited Liability Company

Limited company shareholders are likewise generally not personally liable for the company’s ordinary private debts merely because of their shareholder status.

However, public debts require special attention.

Under Turkish public receivables legislation, limited liability company shareholders may face personal exposure for certain public debts that cannot be collected from the company, broadly in proportion to their capital shares and subject to the specific statutory conditions.

Managers may also face separate liability rules.

This difference can be significant when choosing between an A.Ş. and Ltd. Şti.

22. Does 100% Ownership Mean the Shareholder Can Use Company Money Freely?

No.

A company is legally separate from its shareholder.

Even where one foreign investor owns 100% of the shares, company assets remain the assets of the company.

The sole shareholder should not treat the company’s bank account as a personal account.

Transactions between the company and its shareholder should have legitimate corporate grounds and comply with:

• accounting rules;
• tax rules;
• corporate law;
• transfer pricing rules; and
• directors’ duties.

Improper withdrawals may create tax, corporate and potentially criminal consequences depending on the circumstances.

23. Should a Foreign Investor Use a Turkish Nominee Shareholder?

Usually there is no need to do so solely to satisfy a nationality requirement.

Since 100% foreign ownership is generally permitted, using a Turkish individual as a nominal shareholder may actually create unnecessary risk.

Possible problems include:

• disputes over beneficial ownership;
• unauthorized share transfers;
• inheritance complications;
• creditor claims against the nominee;
• voting disputes;
• dividend disputes; and
• difficulties proving the real investment relationship.

Where there is no legal reason for a nominee structure, direct ownership will frequently be more transparent.

24. Should the Investment Be Made Personally or Through a Foreign Holding Company?

This requires strategic analysis.

Personal Ownership

A foreign individual can personally own the Turkish company.

This may provide a simpler ownership structure.

Foreign Holding Company

Alternatively, a foreign company may own the Turkish subsidiary.

This may be appropriate where:

• the business operates internationally;
• investors already hold shares through a parent company;
• intellectual property is held by the parent;
• multiple subsidiaries exist;
• an international investment round is expected; or
• an eventual group sale is contemplated.

Tax, corporate governance, financing and exit implications should be analyzed before selecting the structure.

Changing the ownership structure later may result in additional:

• tax consequences;
• share transfer documentation;
• regulatory requirements; and
• transaction costs.

25. What Documents Are Required for a Foreign Shareholder?

Requirements depend on whether the shareholder is an individual or legal entity.

Foreign Individual

Documents commonly include:

• passport;
• Turkish tax identification number;
• address information;
• notarized translations where required;
• signature documents; and
• power of attorney where applicable.

Foreign Company

Additional documentation may include:

• certificate of incorporation;
• commercial registry extract;
• certificate showing current representatives;
• board or shareholder resolution;
• articles or constitutional documents; and
• power of attorney.

Foreign documents may require an apostille or consular legalization depending on their country of origin and nature.

26. Does the Foreign Investor Need to Come to Türkiye?

Not necessarily for every stage.

A significant part of a company incorporation or share acquisition transaction may often be handled through a properly drafted power of attorney.

However, physical attendance may sometimes be required or practically advisable for:

• banking procedures;
• specific identification requirements;
• regulatory procedures; or
• particular institutional compliance requirements.

Banking procedures are particularly dependent on each bank’s internal KYC policies.

Foreign investors should therefore confirm banking requirements before scheduling the incorporation process.

27. Can Turkish Banks Refuse a Foreign-Owned Company?

A legally registered company does not automatically have a right to open an account with every bank.

Banks apply independent compliance procedures.

A 100% foreign-owned company may therefore be asked to provide:

• information regarding ultimate beneficial owners;
• source of funds;
• business model;
• expected transaction volume;
• customer countries;
• supplier information;
• contracts;
• company website;
• tax documentation; and
• evidence of commercial activities.

Foreign founders from certain jurisdictions or businesses operating in higher-risk sectors may face enhanced compliance checks.

Therefore:

company incorporation and banking should be planned as separate processes.

28. Key Legal Risks Before Acquiring 100% of an Existing Turkish Company

Foreign investors should be particularly careful when purchasing an existing business.

Buying 100% of the shares normally means acquiring control of the existing legal entity together with its historical legal and financial exposure.

Potential hidden liabilities may include:

• tax debts;
• social security debts;
• employment claims;
• pending litigation;
• guarantees;
• bank loans;
• undisclosed related-party transactions;
• regulatory violations;
• KVKK violations;
• intellectual property disputes;
• environmental liability; and
• contractual breaches.

For this reason, a foreign investor should normally conduct a legal due diligence review before completing the acquisition.

A carefully drafted Share Purchase Agreement (SPA) should then address discovered and undiscovered risks through mechanisms such as:

• representations and warranties;
• indemnification;
• disclosure schedules;
• price adjustments;
• escrow;
• holdbacks; and
• specific indemnities.

29. Practical Example: 100% Foreign-Owned SaaS Company

Assume a foreign entrepreneur intends to establish an AI-powered SaaS business in İstanbul.

The founder wants to own 100% of the company.

The structure itself is generally legally possible.

However, before incorporation, the founder should still determine:

1. whether an Ltd. Şti. or A.Ş. is preferable;
2. the appropriate share capital;
3. whether the founder will actively work in Türkiye;
4. whether a work permit is needed;
5. how intellectual property will be transferred to the company;
6. where customer data will be stored;
7. whether customer data will be transferred abroad;
8. which contracts will govern customer relationships;
9. whether foreign AI providers will process personal data;
10. how future investors will acquire shares; and
11. how profits will ultimately be transferred to the foreign shareholder.

Therefore, 100% ownership is only the beginning of the legal structuring process.

30. Legal Checklist for a Foreign Investor

Before establishing or acquiring a wholly foreign-owned Turkish company, investors should consider:

• whether the relevant sector permits the proposed foreign ownership;
• whether an Ltd. Şti. or A.Ş. should be established;
• whether ownership should be personal or through a holding company;
• the amount of share capital;
• management and representation powers;
• work permit requirements;
• banking arrangements;
• regulatory licences;
• tax structure;
• dividend distributions;
• intellectual property ownership;
• KVKK compliance;
• employment contracts;
• future fundraising;
• minority investor rights;
• transfer restrictions; and
• exit planning.

Conclusion: Can a Foreigner Own an Entire Turkish Company?

Yes.

As a general rule, a foreign individual or foreign company may own 100% of a Turkish company without a Turkish partner.

Türkiye’s foreign investment regime is based on freedom of investment and equal treatment between foreign and domestic investors, subject to restrictions imposed by special legislation. Official investment guidance specifically confirms that foreign investors may establish companies with 100% foreign ownership or acquire all shares of an existing Turkish business.

For most ordinary businesses, foreign investors can therefore:

• establish the company themselves;
• own all shares;
• control the business;
• appoint management;
• receive dividends; and
• ultimately sell their investment.

However, foreign ownership should not be confused with unrestricted business activity.

Special legal issues may arise concerning:

• regulated sectors;
• real estate ownership;
• work permits;
• banking;
• public debts;
• taxation;
• cross-border payments; and
• regulatory approvals.

Foreign investors should therefore examine not only whether they can own 100% of the company, but also whether the proposed ownership structure is the most effective structure for operating, financing and eventually exiting the Turkish business.

Frequently Asked Questions

Can a foreign citizen own 100% of an LLC in Türkiye?

Yes. A foreign citizen may generally own all shares of a Turkish limited liability company.

Can a foreign company own a Turkish company?

Yes. A foreign legal entity may generally own up to 100% of a Turkish company.

Do foreigners need a Turkish business partner?

Generally, no. A Turkish partner is not normally required for ordinary commercial activities.

Can one foreigner establish a company alone?

Yes. Both an LLC and JSC may generally have one shareholder.

What is the minimum capital for a Turkish LLC?

The current statutory minimum capital is TRY 50,000.

What is the minimum capital for a Turkish JSC?

The current statutory minimum capital is TRY 250,000.

Does a foreign shareholder need to live in Türkiye?

Not necessarily. Share ownership and residence are separate legal matters.

Does owning 100% of a company provide a work permit?

No. Share ownership does not automatically grant a work permit.

Can a foreign shareholder receive dividends abroad?

Generally, yes, subject to applicable corporate, tax and banking requirements. Turkish foreign investment legislation provides for the transfer abroad of items including net profits and dividends.

Are there foreign ownership restrictions in Türkiye?

There is no general foreign ownership restriction applicable to ordinary businesses, but special restrictions and regulatory approval requirements can apply in certain strategic or regulated sectors.

Is a 100% foreign-owned company considered a Turkish company?

Yes. A company established under Turkish law is a Turkish legal entity even if all of its shareholders are foreign.

Can a foreign shareholder be personally liable for company debts?

Ordinary shareholder liability generally depends on the corporate form. In particular, limited company shareholders should pay special attention to potential liability concerning certain uncollectible public debts.

Legal Disclaimer: This article is intended for general informational purposes and does not constitute legal advice. Foreign investment restrictions, corporate law requirements, tax consequences, work permits, licensing obligations and regulatory approvals may vary according to the investor, sector and proposed transaction. Specific legal advice should be obtained before establishing or acquiring a company in Türkiye.