Introduction

Foreign investors do not need to establish a new company from scratch in order to enter the Turkish market. An individual or company established abroad may instead acquire shares in an existing Turkish company and become a shareholder of an operational business.

For many international investors, this can be commercially more attractive than incorporating a new company.

Purchasing shares in an existing Turkish company may provide immediate access to:

• employees;
• customer relationships;
• distribution networks;
• commercial contracts;
• licences;
• intellectual property;
• production facilities;
• real estate;
• banking relationships;
• supplier networks; and
• an established market position.

Turkish foreign investment legislation is generally based on the principles of freedom to invest and equal treatment of foreign and domestic investors. Law No. 4875 on Foreign Direct Investments expressly provides that, unless otherwise required by international agreements or special legislation, foreign investors are free to make direct investments in Turkey and are subject to equal treatment with domestic investors.

The legislation expressly recognises the acquisition of shares in a Turkish company as a form of foreign direct investment. In the case of acquisitions outside the stock exchange, any percentage of shares may fall within the foreign direct investment definition, while acquisitions through the stock exchange fall within the statutory foreign direct investment definition when the foreign investor acquires at least 10% of the shares or voting power.

The general principle is therefore relatively straightforward:

A foreign individual or foreign company may generally acquire shares in an existing Turkish company without needing a Turkish shareholder merely because the purchaser is foreign.

However, the legal risk of a share acquisition is substantially different from simply establishing a new company.

When an investor purchases shares, the underlying Turkish company remains the same legal entity. Its previous:

• debts;
• tax exposures;
• employees;
• pending lawsuits;
• enforcement proceedings;
• guarantees;
• regulatory liabilities;
• contracts; and
• undisclosed commercial problems

normally remain within that company.

This is why a Turkish share acquisition should usually be treated as an M&A transaction requiring legal, financial and tax due diligence, rather than merely as a simple transfer of shares.

This article explains how foreigners can buy shares in Turkish companies in 2026, the differences between acquiring shares in a limited liability company and a joint stock company, what approvals and notifications may be required, how legal due diligence should be conducted, what should be included in a share purchase agreement and how foreign investors can protect themselves against hidden liabilities.

1. Can a Foreigner Buy Shares in a Turkish Company?

Yes.

Foreign natural persons and foreign legal entities may generally purchase shares in Turkish companies.

A foreign investor may acquire:

• a minority shareholding;
• 50% of a company;
• a controlling majority;
• 100% of the company; or
• shares together with other Turkish or foreign investors.

Under Law No. 4875, foreign investment is generally subject to a notification-based rather than prior-approval-based framework, unless special legislation applies to the relevant industry.

Therefore, for an ordinary unregulated commercial company, there is generally no universal requirement to obtain government approval merely because a foreign person is purchasing the shares.

However, two important exceptions must always be considered:

1. sector-specific regulatory approvals, and
2. Competition Authority merger-control clearance.

These issues should be examined before signing or closing the transaction.

2. Does the Foreign Investor Need a Turkish Partner?

Generally, no.

Turkey does not impose a general rule requiring foreign investors to hold shares jointly with Turkish citizens.

A foreign investor may potentially acquire 100% of the shares of an ordinary Turkish company.

For example, a foreign company incorporated in:

• Germany;
• the United Kingdom;
• the Netherlands;
• Sweden;
• the United States;
• the United Arab Emirates;
• Qatar;
• Saudi Arabia; or
• another jurisdiction

may generally acquire the entire share capital of a Turkish company, subject to special sectoral restrictions.

Likewise, an individual foreign investor may acquire all shares personally.

The key issue is therefore usually not nationality but rather:

• company type;
• regulatory sector;
• transaction size;
• merger-control thresholds;
• corporate restrictions; and
• contractual arrangements between the shareholders.

3. Is Buying Shares Different From Buying the Assets of a Turkish Business?

Yes, significantly.

An investor entering the Turkish market should distinguish between:

share acquisition

and

asset acquisition.

In a share acquisition, the investor purchases the shares of the company.

The company itself continues to own its:

• real estate;
• machinery;
• contracts;
• licences;
• employees;
• bank accounts;
• intellectual property;
• receivables; and
• other assets.

However, the company also continues to carry its historical liabilities.

In an asset acquisition, by contrast, the investor acquires selected business assets or a business operation rather than acquiring the shares of the legal entity itself.

This distinction is critical.

Example

A foreign investor purchases 100% of a Turkish manufacturing company.

After closing, the investor discovers that the company has:

• TRY 40 million in unpaid taxes;
• employee litigation;
• an undisclosed bank guarantee;
• environmental penalties; and
• a pending lawsuit from a customer.

Because the investor purchased the shares, the Turkish company still owes those liabilities.

The investor may have contractual claims against the seller under the share purchase agreement, but the liabilities do not disappear merely because ownership of the shares changed.

This is precisely why due diligence and contractual indemnities are essential in Turkish company acquisitions.

4. Which Turkish Company Types Are Most Commonly Acquired?

The two most important company types are:

Limited Liability Company – Limited Şirket

A Turkish limited liability company is commonly abbreviated as:

Ltd. Şti.

It may have between one and fifty shareholders and currently requires at least TRY 50,000 minimum capital.

Limited companies are commonly used by:

• SMEs;
• consulting firms;
• trading companies;
• technology businesses;
• e-commerce businesses;
• family companies;
• service companies; and
• closely held businesses.

Joint Stock Company – Anonim Şirket

A Turkish joint stock company is commonly abbreviated as:

A.Ş.

Joint stock companies are often preferred for:

• larger businesses;
• venture capital investments;
• private equity transactions;
• institutional investments;
• complex shareholder structures;
• regulated businesses; and
• companies expecting multiple financing rounds.

The procedure for transferring shares differs materially between these two company types.

5. How Does a Foreigner Buy Shares in a Turkish Limited Liability Company?

Limited liability company share transfers are subject to relatively formal procedures.

The Ministry of Trade’s official share-transfer guidance identifies the principal steps as:

1. execution of a share transfer agreement between the parties and notarisation;
2. approval of the transfer by the company’s general assembly unless the articles of association provide otherwise; and
3. completion of the relevant trade registry and announcement procedures.

Therefore, purchasing shares in a limited company is not normally accomplished merely by signing a private English-language purchase agreement.

The parties should examine:

• the company’s articles of association;
• the Turkish Commercial Code;
• shareholder resolutions;
• notarisation requirements;
• Trade Registry documentation; and
• the company’s share ledger.

The articles of association may contain additional restrictions.

6. Is General Assembly Approval Required for a Limited Company Share Transfer?

Generally, yes, unless the articles of association establish a different arrangement within the limits permitted by law.

This is one of the most important differences between a limited liability company and an ordinary joint stock company share transfer.

Before buying an interest in an Ltd. Şti., the foreign investor should review the articles of association carefully.

The company documents may contain:

• approval requirements;
• pre-emption rights;
• transfer prohibitions;
• consent mechanisms;
• shareholder qualification requirements;
• management rights; or
• other restrictions.

An investor should therefore not assume that a seller holding 30% of the shares can automatically transfer those shares without involving the company or other shareholders.

7. Does the Limited Company Share Transfer Agreement Need to Be Notarised?

Turkish limited company share transfers are subject to statutory form requirements, and the Ministry of Trade identifies notarisation of the share transfer agreement as part of the required transfer procedure.

For an international acquisition, the parties often prepare two interconnected documents:

1. a detailed Share Purchase Agreement, often bilingual or in English and Turkish; and
2. the formal Turkish share transfer documentation necessary to satisfy the Turkish Commercial Code and Trade Registry requirements.

The commercial SPA may regulate matters far beyond the formal share transfer itself.

For example:

• representations and warranties;
• indemnities;
• purchase price adjustments;
• closing conditions;
• escrow;
• non-compete obligations;
• confidentiality;
• management changes;
• post-closing cooperation; and
• dispute resolution.

8. How Are Shares in a Turkish Joint Stock Company Transferred?

Joint stock company share transfers are generally more flexible.

The Ministry of Trade’s official guidance states that joint stock company shares may generally be transferred without the transfer itself being registered and announced in the Trade Registry, subject to applicable exceptions.

The precise transfer method depends on whether the shares are:

• registered shares;
• bearer shares;
• certificated shares;
• uncertificated shares; or
• publicly traded shares.

The company’s articles of association must also be reviewed.

9. How Are Registered Shares Transferred?

Under Article 490 of the Turkish Commercial Code, registered shares are generally freely transferable unless the law or articles of association provide otherwise.

Where a registered share certificate exists, the transfer may be effected through endorsement and delivery of possession to the transferee.

However, the company may have valid restrictions on transfer.

For example, the articles of association may require company approval for certain registered share transfers.

Non-listed joint stock companies may impose specific restrictions where legally permitted.

The foreign purchaser should therefore inspect:

• articles of association;
• share certificates;
• shareholder ledger;
• shareholder agreements; and
• board resolutions

before assuming that the seller can freely transfer the shares.

10. Can the Company Refuse to Register a Foreign Buyer?

In some circumstances, transfer restrictions may allow the company to refuse approval or registration.

Turkish Commercial Code Articles 491–493 regulate several situations involving restrictions on registered share transfers.

For example, shares whose subscription price has not been fully paid may generally require company approval for transfer.

The articles of association of a non-listed joint stock company may also contain restrictions based on legally permissible important reasons.

Therefore, an investor buying a minority interest in a family-owned Turkish A.Ş. should not assume that the mere signature of the seller will always be enough.

Corporate restrictions must be checked first.

11. How Are Bearer Shares Transferred?

Bearer share rules have changed significantly in recent years.

Bearer share certificates are subject to notification and registration requirements with the Central Securities Depository – Merkezi Kayıt Kuruluşu (MKK).

The Turkish Commercial Code provides that the date of notification to MKK is relevant for asserting rights attached to bearer shares against the company and third parties.

Accordingly, where a foreign investor acquires bearer shares, merely physically receiving the share certificates is not the end of the compliance process.

The MKK notification requirements must also be satisfied.

12. Can a Foreigner Buy Shares in a Publicly Traded Turkish Company?

Yes, subject to Turkish capital markets legislation and applicable investment rules.

Foreign investors routinely invest in Turkish publicly traded companies.

However, purchasing significant stakes in listed companies may trigger additional rules under the Capital Markets Law and Capital Markets Board regulations.

Depending on the structure, issues may include:

• public disclosure;
• beneficial ownership disclosure;
• mandatory tender offer requirements;
• market abuse rules;
• insider information;
• corporate governance rules; and
• Capital Markets Board requirements.

An investor acquiring control of a publicly traded company should therefore obtain specialised capital markets advice before closing.

13. Is Government Approval Required for a Foreign Share Acquisition?

For ordinary unregulated businesses, Turkey’s foreign direct investment framework generally operates through notification rather than universal prior approval.

Law No. 4875 expressly states that its purpose is to establish a notification-based system instead of a screening and approval system for ordinary foreign direct investment.

However, special legislation can override this general rule.

Therefore, before acquiring a company, the foreign investor should ask:

Is the target operating in a regulated sector?

14. Which Sectors May Require Regulatory Approval?

Transactions involving regulated businesses may require approval, consent or notification from the relevant public authority.

Examples can include businesses operating in:

• banking;
• insurance;
• private pensions;
• payment services;
• electronic money;
• energy;
• broadcasting;
• telecommunications;
• civil aviation;
• certain transport sectors; and
• other regulated industries.

For example, Turkish banking legislation imposes prior regulatory approval requirements for certain direct or indirect acquisitions and ownership threshold changes in banks.

The insurance and private pension sector is likewise actively supervised by the Insurance and Private Pension Regulation and Supervision Agency, and its published activity reports expressly record approvals granted for share-transfer transactions.

Therefore, regulatory due diligence must occur before signing an unconditional share transfer.

A Share Purchase Agreement in a regulated sector should usually make regulatory approval a condition precedent to closing.

15. Does Competition Authority Approval Apply?

Potentially, yes.

A share acquisition may constitute a concentration requiring prior clearance from the Turkish Competition Authority if it results in a lasting change of control and the applicable turnover thresholds are satisfied.

This is particularly important in:

• majority acquisitions;
• acquisitions of sole control;
• acquisitions of joint control;
• certain minority investments carrying veto rights; and
• mergers.

Turkey updated its merger-control regime in February 2026.

The Competition Authority announced substantial increases in the applicable turnover thresholds:

• the former TRY 250 million individual threshold was increased to TRY 1 billion;
• the former TRY 750 million Turkey turnover threshold was increased to TRY 3 billion; and
• the former TRY 3 billion worldwide turnover threshold was increased to TRY 9 billion.

The 2026 amendments also revised the technology-undertaking exception and limited its special application to qualifying technology undertakings established in Turkey.

Therefore, significant M&A transactions should undergo a merger-control analysis before closing.

16. Why Does “Control” Matter More Than the Percentage Purchased?

Competition-law analysis does not always depend purely on whether the purchaser acquires more than 50%.

A minority investor may acquire joint control through contractual rights.

For example, a foreign investor acquiring 40% of a Turkish company might receive veto rights over:

• annual budget;
• business plan;
• major investments;
• senior management appointments; or
• strategic decisions.

Depending on their scope, these rights may constitute joint control.

Therefore, a transaction involving only 30% or 40% of the shares may still require Competition Authority analysis.

The shareholder agreement should therefore be reviewed together with the share purchase transaction.

17. What Happens if Competition Clearance Is Required?

Where the transaction is subject to mandatory merger control, clearance should generally be obtained before closing.

A transaction that requires Competition Board authorisation should not be implemented prematurely.

Accordingly, the Share Purchase Agreement may provide:

Closing is conditional upon obtaining unconditional or otherwise acceptable clearance from the Turkish Competition Authority.

This protects both purchaser and seller from completing a transaction that cannot lawfully close.

18. What Is E-TUYS?

Turkey uses the Electronic Incentive Implementation and Foreign Capital Information System – E-TUYS for foreign direct investment reporting.

The Ministry of Industry and Technology states that, since July 2018, notifications made by companies and branches established in Turkey by foreign investors are submitted electronically through E-TUYS.

The relevant electronic information includes:

• Activity Information Form for FDI;
• FDI Capital Data Form; and
• FDI Share Transfer Data Form.

Therefore, once a Turkish company becomes foreign-owned through a share acquisition, the E-TUYS reporting requirements should be examined immediately after the transaction.

19. Must a Foreign Share Acquisition Be Reported Through E-TUYS?

Yes, where the transaction falls within the foreign investment reporting framework.

The historical FDI Share Transfer Data Form expressly states that share-transfer information is to be submitted within one month following the transfer, and the current system has moved these notifications electronically to E-TUYS.

Accordingly, post-closing compliance should not be overlooked.

The acquisition team should determine:

• who is authorised as the E-TUYS user;
• whether the target is already registered;
• whether the transaction introduces foreign ownership for the first time; and
• what information must be updated.

This is particularly important where a formerly 100% Turkish-owned company becomes foreign-owned following the acquisition.

20. Why Is Legal Due Diligence Essential?

Legal due diligence is arguably the most important part of buying an existing Turkish company.

The foreign investor should not simply ask:

“How much is this company worth?”

The more important preliminary question is:

“What liabilities am I indirectly acquiring together with these shares?”

A proper due diligence review may examine:

• corporate records;
• share ownership;
• tax;
• litigation;
• enforcement proceedings;
• employees;
• real estate;
• commercial contracts;
• loans;
• guarantees;
• intellectual property;
• regulatory licences;
• data protection;
• competition law;
• consumer law;
• environmental compliance; and
• related-party transactions.

The findings then determine how the SPA should be drafted.

21. What Corporate Documents Should Be Checked?

Corporate due diligence should examine at least:

• Trade Registry records;
• articles of association;
• amendments;
• shareholder structure;
• share ledger;
• share certificates;
• general assembly minutes;
• board resolutions;
• management resolutions;
• signing authorities;
• powers of attorney;
• capital payments;
• shareholder loans;
• dividend resolutions; and
• shareholder agreements.

The investor should confirm that the seller actually owns the shares being sold.

This sounds obvious, but ownership can become complicated in family companies where:

• share certificates are missing;
• inheritance transfers were never completed;
• shareholder ledger entries are inconsistent;
• capital increases diluted historical shareholders; or
• nominee ownership arrangements exist.

22. Why Should Tax Due Diligence Be Conducted?

A share purchase does not erase the target company’s historical tax liabilities.

The target remains responsible for issues arising before closing.

Tax due diligence may therefore examine:

• corporate income tax;
• VAT;
• withholding tax;
• payroll taxes;
• stamp tax;
• transfer pricing;
• related-party transactions;
• customs;
• tax inspections;
• tax penalties;
• restructuring transactions; and
• unpaid public receivables.

The investor should also determine whether the company has participated in aggressive tax structures that could later be challenged.

23. Should Social Security Liabilities Be Checked?

Yes.

A company may have substantial liabilities to the Turkish Social Security Institution – SGK.

These may arise from:

• undeclared employees;
• under-declared salaries;
• incorrect occupational classifications;
• unpaid premiums;
• workplace accident liabilities; or
• improper incentive use.

A foreign investor acquiring an employee-intensive business should therefore include SGK compliance in the due diligence scope.

24. What Employment Risks Should Be Investigated?

Employees remain employed by the target company after a share acquisition because the employer company itself does not change.

Accordingly, the investor indirectly acquires exposure to existing employment relationships.

The review may include:

• employment agreements;
• senior management contracts;
• accrued severance exposure;
• unused annual leave;
• overtime claims;
• workplace practices;
• pending employee litigation;
• collective bargaining agreements;
• incentive plans;
• confidentiality agreements; and
• non-compete provisions.

An acquisition involving hundreds of employees may therefore contain significant off-balance-sheet labour liabilities.

25. Why Must Litigation and Enforcement Records Be Checked?

A Turkish target may be involved in:

• commercial lawsuits;
• employment disputes;
• tax litigation;
• administrative proceedings;
• intellectual property disputes;
• consumer cases;
• enforcement proceedings; or
• criminal investigations affecting managers or operations.

The investor should ask for both:

• pending proceedings; and
• threatened claims.

The seller may be required under the SPA to provide a complete litigation disclosure schedule.

If a major undisclosed lawsuit emerges after closing, a properly drafted warranty and indemnity mechanism may become critical.

26. What Should Be Checked Regarding Bank Loans and Guarantees?

Bank debt requires careful analysis.

The investor should review:

• loan agreements;
• credit facilities;
• mortgages;
• pledges;
• personal guarantees;
• corporate guarantees;
• letters of guarantee;
• financial covenants;
• change-of-control provisions; and
• cross-default clauses.

A share transfer may technically trigger a default if the company’s bank agreement contains a change-of-control restriction.

Therefore, the purchaser may need the bank’s consent before closing.

27. What Is a Change-of-Control Clause?

Many commercial contracts provide that if ownership of the company changes significantly, the counterparty may:

• terminate the agreement;
• demand consent;
• accelerate payment; or
• renegotiate terms.

These clauses are common in:

• bank facilities;
• franchise agreements;
• distribution agreements;
• licences;
• major supply agreements;
• software contracts; and
• joint ventures.

A foreign investor purchasing 100% of a Turkish business may therefore discover that a commercially valuable contract disappears immediately after the acquisition unless prior consent is obtained.

Change-of-control analysis should be a standard part of M&A due diligence.

28. Should Intellectual Property Be Checked?

Absolutely.

For technology, e-commerce, manufacturing, healthcare and consumer companies, intellectual property may represent much of the company’s value.

Due diligence should identify:

• trademarks;
• patents;
• designs;
• software;
• domain names;
• copyright;
• licensing arrangements;
• employee-created intellectual property; and
• infringement disputes.

A common startup problem occurs where the company uses software that legally belongs to the founder rather than the company itself.

The investor should ensure that all commercially important IP is validly owned or licensed by the target.

29. Why Is KVKK Due Diligence Important?

Companies processing personal data are subject to Turkish data protection law, particularly Law No. 6698 on the Protection of Personal Data – KVKK.

A buyer should investigate whether the target:

• provides privacy notices;
• has proper processing grounds;
• transfers data abroad lawfully;
• protects special categories of personal data;
• maintains processor agreements;
• handles data breaches properly;
• complies with retention requirements; and
• satisfies registration obligations where applicable.

This is particularly important for:

• healthcare;
• fintech;
• SaaS;
• e-commerce;
• advertising;
• HR technology; and
• consumer businesses.

Historical data protection violations remain within the acquired company.

30. What Is a Share Purchase Agreement?

The Share Purchase Agreement – SPA is the principal commercial contract between purchaser and seller.

A well-drafted Turkish M&A SPA generally regulates matters such as:

• shares being transferred;
• purchase price;
• payment mechanism;
• closing date;
• conditions precedent;
• seller warranties;
• indemnities;
• disclosures;
• price adjustments;
• escrow;
• management changes;
• non-compete obligations;
• confidentiality;
• liability caps;
• time limits;
• governing law; and
• dispute resolution.

For international transactions, the SPA may be significantly more important than the formal corporate transfer documents.

31. What Representations and Warranties Should the Foreign Buyer Request?

Typical seller warranties may cover:

Ownership of Shares

The seller legally owns the shares and can transfer them free of undisclosed encumbrances.

Corporate Status

The target is validly established and properly registered.

Financial Statements

The financial information fairly reflects the business, subject to negotiated standards.

Taxes

All material tax obligations have been properly handled.

Employees

Employment records and liabilities have been disclosed.

Litigation

All material proceedings have been disclosed.

Contracts

Material contracts are valid and identified.

Intellectual Property

The target owns or validly licenses necessary IP.

Regulatory Compliance

Necessary licences and permits are valid.

No Undisclosed Liabilities

Material liabilities outside the disclosed accounts have been identified.

These warranties give the buyer contractual remedies if the seller’s statements later prove false.

32. What Is an Indemnity?

An indemnity is a contractual mechanism requiring the seller to compensate the purchaser for specified risks.

For example:

The seller shall indemnify the purchaser for all losses arising from the tax investigation relating to the financial years before closing.

Specific indemnities are particularly useful where due diligence has already identified a known problem.

Examples include:

• ongoing tax audit;
• employee claim;
• pending lawsuit;
• environmental issue;
• disputed licence;
• shareholder dispute; or
• unpaid customs liability.

Rather than ignoring the risk, the parties allocate it contractually.

33. Should Part of the Purchase Price Be Held in Escrow?

In many transactions, yes.

Suppose a foreign investor pays USD 10 million for a Turkish company.

Due diligence identifies several unresolved risks.

Instead of paying the entire USD 10 million directly to the seller, the parties might agree that:

• USD 8.5 million is paid at closing;
• USD 1.5 million remains in escrow for 18 months.

If certain warranty claims arise, the purchaser may seek recovery from the escrow.

This can provide materially better protection than attempting to recover money from a seller located in another jurisdiction years after closing.

34. What Is a Purchase Price Adjustment?

The final purchase price may be adjusted according to the company’s financial position at closing.

Common mechanisms include:

• completion accounts;
• net debt adjustment;
• working capital adjustment;
• cash-free/debt-free pricing; and
• locked-box structures.

For example, if the parties agree to purchase the company on a cash-free/debt-free basis and unexpected bank debt appears immediately before closing, the purchase price may be reduced accordingly.

Foreign investors should therefore avoid simply agreeing on a headline number without defining how the final price will be calculated.

35. Should a Foreign Investor Sign a Shareholders’ Agreement?

If the investor is acquiring less than 100% of the target, usually yes.

A shareholders’ agreement may regulate the post-closing relationship between:

• foreign investor;
• Turkish founder;
• management shareholders; and
• other investors.

Important clauses may include:

• board appointment rights;
• reserved matters;
• veto rights;
• information rights;
• dividend policy;
• capital increases;
• shareholder loans;
• anti-dilution;
• pre-emption rights;
• right of first refusal;
• tag-along;
• drag-along;
• deadlock mechanisms;
• founder lock-in;
• non-compete;
• exit rights; and
• dispute resolution.

A foreign investor buying 49% without a shareholders’ agreement may have much less practical control than expected.

36. What Are Tag-Along and Drag-Along Rights?

Tag-Along

A tag-along clause protects a minority investor.

If the majority shareholder sells shares to a third party, the minority investor may require the purchaser to buy its shares on similar terms.

Drag-Along

A drag-along clause helps facilitate a future company sale.

If a qualifying majority accepts an offer to sell the business, minority shareholders can be required to participate in the sale.

These mechanisms are especially important for private equity and venture capital investments.

37. Can the Foreign Investor Appoint Directors or Managers?

Yes, subject to Turkish corporate law and the agreed governance structure.

A foreign investor acquiring a substantial shareholding may negotiate rights to appoint:

• board members in an A.Ş.; or
• managers in an Ltd. Şti.

However, ownership, management appointment and immigration/work permit rules should be examined separately.

A foreign individual may lawfully own shares yet still require appropriate work authorisation if personally working in Turkey.

38. Can the Foreign Investor Send Dividends Abroad?

The Foreign Direct Investment Law expressly protects the ability of foreign investors to transfer abroad through banks or financial institutions:

• net profits;
• dividends;
• proceeds from sale or liquidation;
• compensation;
• licence and management payments; and
• repayment and interest relating to foreign loans.

However, the company must still comply with:

• Turkish corporate law;
• distributable profit rules;
• tax withholding;
• banking compliance; and
• any applicable double taxation treaty.

The legal right to repatriate profits does not mean that distributions are tax-free.

39. What Tax Issues Should the Foreign Purchaser Consider?

The tax consequences of a Turkish share acquisition depend on:

• identity of seller;
• identity of purchaser;
• company type;
• holding period;
• whether share certificates exist;
• transaction structure;
• treaty jurisdiction;
• purchase price allocation; and
• financing.

The Ministry of Trade notes that transactions connected with share transfers in capital companies are exempt from the fees regulated under the relevant provisions of the Fees Law.

However, this should not be interpreted as meaning that an M&A transaction has no tax consequences.

Possible issues include:

• seller’s capital gain taxation;
• stamp-tax treatment of transaction documents;
• withholding;
• financing interest;
• transfer pricing;
• shareholder loans;
• dividend taxation; and
• future exit taxation.

A separate transaction tax analysis is therefore advisable.

40. Can the Acquisition Be Financed Through a Shareholder Loan?

Potentially, yes.

A foreign investor may fund a Turkish acquisition through:

• equity;
• bank debt;
• shareholder loan;
• acquisition financing; or
• a combination of these methods.

However, acquisition financing may create issues under:

• Turkish tax law;
• thin-capitalisation rules;
• transfer pricing;
• withholding tax;
• foreign exchange legislation;
• financial assistance considerations; and
• banking regulations.

The financing structure should therefore be designed before closing.

41. What Are the Most Common Mistakes Foreign Investors Make?

Mistake 1: Buying Shares Without Due Diligence

The buyer discovers historical liabilities after closing.

Mistake 2: Treating a Share Deal Like a New Company Formation

The acquired company already has a legal and financial history.

Mistake 3: Paying the Entire Price at Signing

Regulatory approvals and closing conditions may still be outstanding.

Mistake 4: Ignoring Articles of Association

Transfer restrictions may prevent or delay the acquisition.

Mistake 5: Ignoring Competition Law

A transaction requiring prior Competition Board approval may not lawfully close before clearance.

Mistake 6: Failing to Check Sector Regulation

Banking, insurance and other regulated businesses may require separate approvals.

Mistake 7: Ignoring E-TUYS

Foreign investment share-transfer information may need to be reported electronically after closing.

Mistake 8: Relying Only on Seller Warranties

Contractual protection does not replace due diligence.

Mistake 9: Failing to Use Escrow

A seller may become difficult to pursue after receiving the entire price.

Mistake 10: Buying a Minority Stake Without Governance Rights

A 40% economic interest can have very little practical control if shareholder rights are poorly drafted.

42. Practical Example: Foreign Investor Acquiring 70% of a Turkish Company

Assume a German industrial company intends to acquire 70% of a Turkish manufacturing A.Ş.

The appropriate transaction may proceed as follows.

Stage 1 – Preliminary Structuring

The parties sign a confidentiality agreement and possibly a letter of intent.

Stage 2 – Due Diligence

Legal, tax and financial advisers investigate:

• ownership;
• financial statements;
• taxes;
• employees;
• litigation;
• machinery;
• real estate;
• intellectual property;
• material contracts;
• bank loans;
• licences; and
• regulatory compliance.

Stage 3 – Competition Analysis

The parties calculate Turkish and worldwide turnover under the 2026 merger-control thresholds.

If prior clearance is required, Competition Authority approval becomes a closing condition.

Stage 4 – Regulatory Review

The target’s sector is reviewed for additional governmental approval requirements.

Stage 5 – SPA Negotiation

The parties negotiate:

• USD/EUR purchase price;
• closing accounts;
• warranties;
• indemnities;
• escrow;
• conditions precedent;
• seller liability;
• non-compete obligations; and
• dispute resolution.

Stage 6 – Shareholders’ Agreement

Because the seller will retain 30%, the parties negotiate:

• board seats;
• veto rights;
• reserved matters;
• dividend policy;
• capital funding;
• tag-along;
• drag-along; and
• exit arrangements.

Stage 7 – Conditions Precedent

Competition clearance, bank consents and regulatory approvals are obtained.

Stage 8 – Closing

The shares are transferred according to the rules applicable to the company’s share type.

The purchase price is paid in accordance with the SPA.

Stage 9 – Corporate Updates

The share ledger, corporate records, management and signing authorities are updated as necessary.

Stage 10 – Foreign Investment Reporting

The relevant E-TUYS share-transfer and foreign investment information is submitted.

This illustrates why a substantial company acquisition is not merely a one-page share-transfer transaction.

Frequently Asked Questions About Foreigners Buying Shares in Turkish Companies

Can a foreign individual buy shares in a Turkish company?

Yes. Foreign natural persons may generally acquire shares subject to applicable company law and sector-specific restrictions.

Can a foreign company buy a Turkish company?

Yes. A foreign legal entity may generally acquire shares in a Turkish company.

Can foreigners own 100% of a Turkish company?

Generally yes, unless special legislation applicable to the relevant sector creates restrictions.

Is a Turkish partner required?

Generally no.

Is government approval always required?

No. Ordinary foreign direct investment operates largely through a notification-based framework. However, regulated sectors and qualifying merger-control transactions may require prior approval.

Can a foreign investor buy a limited liability company?

Yes. Limited company transfers generally require a notarised share transfer agreement and, unless otherwise provided, general assembly approval together with the relevant corporate registration process.

Can a foreign investor buy shares in a joint stock company?

Yes. Joint stock company shares are generally more freely transferable, subject to the share type, articles of association and applicable Turkish Commercial Code restrictions.

Does an A.Ş. share transfer always require Trade Registry registration?

Ordinary joint stock company share transfers are generally not themselves subject to universal registration and announcement requirements, although related corporate changes and specific situations may require filings.

What happens with bearer shares?

Bearer share transfers are subject to Central Securities Depository – MKK notification requirements, and MKK notification is relevant for asserting shareholder rights.

Is due diligence necessary?

Strongly recommended. A share purchaser indirectly acquires exposure to the company’s historical liabilities.

Does Competition Authority approval apply?

It may. Turkey substantially increased its merger-control turnover thresholds in February 2026. Transactions resulting in a lasting change of control should be analysed under the updated 2010/4 Communiqué.

Does buying 49% avoid Competition Authority approval?

Not necessarily. A minority investment may confer joint control through strategic veto rights.

What is E-TUYS?

E-TUYS is Turkey’s electronic system used for foreign investment and share-transfer reporting.

How soon should the share transfer be reported?

The FDI framework has historically required relevant share-transfer information within one month following the transfer, with current reporting conducted electronically through E-TUYS.

Can the foreign investor take profits abroad?

Yes, foreign investment legislation generally allows dividends, net profits and qualifying sale proceeds to be transferred abroad through banks, subject to tax and other applicable legislation.

Should a minority investor sign a shareholders’ agreement?

In most significant investments, yes. Governance and exit rights may be as important as the percentage of shares acquired.

Conclusion: How Should a Foreign Investor Acquire Shares in a Turkish Company?

Turkey provides a generally open legal framework for foreign investment.

Under Law No. 4875, foreign investors are generally free to make direct investments in Turkey and are entitled to treatment comparable to domestic investors, subject to special laws and sector-specific regulations.

Accordingly, foreign individuals and foreign companies may generally acquire:

• minority stakes;
• controlling interests; or
• 100% ownership

in Turkish companies.

However, purchasing an existing Turkish company is fundamentally different from establishing a new company.

The foreign investor is acquiring an interest in a legal entity with an existing history.

That history may contain valuable assets, but it may also contain:

• tax liabilities;
• lawsuits;
• employee claims;
• bank debt;
• guarantees;
• defective contracts;
• licensing problems;
• intellectual property disputes;
• regulatory exposure; and
• hidden liabilities.

For this reason, the safest acquisition process can generally be summarised as:

transaction structuring → confidentiality agreement → legal and financial due diligence → valuation → regulatory analysis → Competition Authority analysis → SPA negotiation → shareholders’ agreement → conditions precedent → regulatory approvals → closing → corporate registrations and updates → E-TUYS notification → post-closing integration.

The foreign investor should pay particular attention to the legal form of the target.

For a Turkish limited liability company, share transfers involve relatively formal procedures including a notarised transfer agreement and generally corporate approval and registration steps.

For a Turkish joint stock company, shares are generally more easily transferable, but the exact process depends on whether the shares are registered or bearer shares, whether certificates have been issued, whether the articles contain restrictions and whether MKK notification requirements apply.

Major acquisitions also require careful regulatory analysis.

As of 2026, Turkey has materially revised its merger-control turnover thresholds, making it essential for larger transactions to assess whether Competition Board clearance is required before closing.

Regulated businesses may additionally require approval from authorities responsible for banking, insurance, financial services, energy, broadcasting or other regulated industries.

The foreign investor should also ensure that the Share Purchase Agreement properly allocates historical risks.

A well-drafted SPA may include:

• detailed representations and warranties;
• specific indemnities;
• escrow;
• purchase price adjustments;
• liability caps;
• claim periods;
• disclosure schedules;
• non-compete provisions;
• conditions precedent; and
• effective dispute resolution mechanisms.

Where the purchaser is acquiring less than 100%, a carefully drafted shareholders’ agreement is equally important.

A foreign investor should never assume that a 49% shareholder necessarily has meaningful protection merely because the economic stake is substantial. Control over budgets, management appointments, capital increases, dividends and future exits must be negotiated contractually.

Foreign investors considering buying shares in a Turkish company should therefore conduct legal due diligence before becoming contractually committed to the acquisition.

The commercial objective should not simply be to purchase shares.

The objective should be to acquire a legally verified business at an appropriately adjusted price with clearly allocated historical liabilities and enforceable post-closing rights.

When structured correctly, acquiring an existing Turkish company can provide a foreign investor with rapid access to the Turkish market and an established commercial platform.

When conducted without proper due diligence, the same transaction can result in the investor paying a substantial acquisition price only to inherit years of undisclosed legal, tax and commercial problems.

For cross-border investors, careful legal structuring before signing and closing is therefore one of the most important protections available in a Turkish share acquisition.

This article reflects the Turkish legal and administrative framework and official guidance available as of August 2026. It is provided for general informational purposes only and does not constitute transaction-specific legal, tax, competition, regulatory or investment advice. Every acquisition should be evaluated according to the target company’s legal form, sector, shareholder structure, transaction value, regulatory status and the legislation applicable on the signing and closing dates.