SEO Title: Share Purchase Agreements in Türkiye: Key Risks for Foreign Buyers

Meta Description: Buying shares in a Turkish company? Learn the key legal risks foreign buyers should address in a Share Purchase Agreement, including price adjustments, warranties, indemnities, escrow, closing conditions and regulatory approvals.

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Acquiring shares in an existing Turkish company can provide a foreign investor with immediate access to an established business, customers, employees, contracts, licenses and market infrastructure.

However, once a buyer acquires the shares of a company, the buyer also indirectly acquires exposure to the company’s existing legal and commercial history.

Tax liabilities, employment disputes, litigation, defective intellectual property ownership, regulatory violations, undisclosed debt and problematic contracts do not normally disappear simply because the shareholders of the company have changed.

For this reason, one of the most important documents in a Turkish company acquisition is the Share Purchase Agreement, commonly referred to as an SPA.

A properly drafted SPA does much more than state the number of shares being transferred and the purchase price.

It determines:

• what exactly is being sold;
• when ownership will transfer;
• how the purchase price will be calculated;
• what must happen before closing;
• which statements the seller guarantees to be true;
• who bears historical liabilities;
• how undisclosed risks will be compensated;
• what happens if the transaction does not close;
• and how disputes between the buyer and seller will be resolved.

For foreign investors, these provisions require particular attention because the buyer may have limited knowledge of the Turkish target company’s historical operations and may be transferring substantial consideration from another jurisdiction.

What Is a Share Purchase Agreement?

A Share Purchase Agreement is a contract under which one or more sellers agree to transfer shares in a company to a buyer.

The SPA usually identifies:

• the buyer;
• the seller or sellers;
• the target company;
• the number and class of shares;
• the percentage of ownership being acquired;
• the purchase price;
• payment mechanics;
• conditions precedent;
• representations and warranties;
• indemnification obligations;
• closing procedures;
• post-closing obligations;
• confidentiality provisions;
• restrictive covenants;
• and dispute-resolution mechanisms.

In Türkiye, the contractual mechanics should be coordinated with the legal rules applicable to the relevant type of company.

The requirements for transferring shares in a Turkish joint stock company are not identical to those applicable to a Turkish limited liability company.

Official investment guidance notes that share transfers in joint stock companies may operate through the applicable share-transfer mechanics and that parties commonly use Share Purchase Agreements to regulate their commercial relationship. It also notes that additional restrictions can arise from the company’s articles of association and regulated-sector rules.

Therefore, an SPA should never be drafted independently from the target company’s corporate structure.

1. The First Risk: Is the Seller Actually Able to Transfer the Shares?

The most basic question in any acquisition is often overlooked:

Does the seller legally own the shares that the buyer intends to purchase?

An investor should verify this before signing or, at the latest, make satisfactory verification a condition to closing.

Problems may arise where:

• previous share transfers were improperly completed;
• the share ledger does not match the seller’s representations;
• shares have been pledged;
• another shareholder has a pre-emption right;
• a third party has a purchase option;
• the articles of association restrict transfers;
• the shares are subject to usufruct;
• or the seller has already contractually promised the shares to another person.

The SPA should contain a clear warranty that the seller is the legal and beneficial owner of the shares and has full authority to transfer them.

It should also address whether the shares are transferred free from:

• pledges;
• attachments;
• liens;
• options;
• third-party rights;
• security interests;
• and other encumbrances.

A buyer who pays the purchase price without establishing clear title to the shares can face a fundamental ownership dispute after closing.

2. Share Transfer Rules Depend on the Type of Turkish Company

Before drafting the SPA, the buyer should determine whether the target is a:

• joint stock company, or anonim şirket (A.Ş.);
• limited liability company, or limited şirket (Ltd. Şti.).

The share transfer rules differ.

Joint stock company shares generally provide greater flexibility in share transfers, although the company’s articles, the nature of the shares, sector-specific legislation and existing shareholder arrangements may create restrictions.

Limited liability company share transfers involve a different statutory procedure and should be reviewed carefully before closing.

Foreign investors should therefore avoid using a standard international SPA without adapting it to Turkish corporate law and the target company’s articles of association.

3. Do Not Fix the Purchase Price Without Understanding the Pricing Mechanism

One of the most heavily negotiated provisions of an SPA is the purchase price.

The parties may agree on a headline price of, for example:

EUR 10 million.

However, this does not necessarily mean that EUR 10 million will actually be paid at closing.

The final amount may depend on:

• cash;
• financial debt;
• working capital;
• transaction expenses;
• shareholder loans;
• unpaid bonuses;
• taxes;
• or other adjustments.

Two common approaches in M&A transactions are:

Completion Accounts

Under a completion-accounts mechanism, the final price is adjusted by reference to financial figures calculated around the closing date.

For example:

Enterprise Value: EUR 10 million
Less financial debt: EUR 1.5 million
Plus cash: EUR 500,000

Final equity value: EUR 9 million.

The SPA must precisely define concepts such as:

• cash;
• debt;
• permitted leakage;
• working capital;
• transaction expenses;
• and accounting principles.

Poor definitions can turn the purchase-price calculation into a post-closing dispute.

Locked Box

Under a locked-box structure, the purchase price is determined by reference to historical accounts at an agreed date.

The buyer then relies on contractual protections preventing value from being extracted from the target between the locked-box date and closing.

These protections commonly address leakage.

Examples of leakage may include:

• dividends;
• shareholder payments;
• related-party fees;
• bonuses paid to sellers;
• repayment of shareholder loans;
• or transfer of assets to related parties.

Foreign buyers should understand which pricing model is being used and ensure the SPA defines it with sufficient precision.

4. Avoid Paying the Full Purchase Price Before Closing

One of the most significant practical risks for foreign buyers is transferring the purchase price too early.

A buyer should ordinarily coordinate payment with effective completion of the share transfer and delivery of the agreed closing documents.

Depending on the transaction, parties may use:

• simultaneous closing mechanics;
• bank-to-bank transfers;
• escrow;
• holdback;
• deferred consideration;
• or conditional payment mechanisms.

An SPA should clearly state:

• which documents must be delivered;
• when funds must be released;
• who verifies that closing has occurred;
• and what happens if one party performs but the other does not.

For a foreign investor transferring millions of euros or dollars into Türkiye, vague closing mechanics can create unnecessary risk.

5. Conditions Precedent Are Often More Important Than Warranties

A warranty gives the buyer a claim if something is wrong.

A condition precedent prevents the buyer from being required to close until something is corrected.

That distinction is important.

Suppose the target company’s main trademark belongs to the founder personally.

The seller could provide a warranty stating:

“The company owns all intellectual property necessary for its business.”

But if this statement is already known to be false, the better solution may be to require the founder to transfer the trademark to the company before closing.

Typical conditions precedent may include:

• obtaining Competition Authority clearance;
• obtaining sector-specific regulatory approval;
• receiving third-party consents;
• release of share pledges;
• repayment of specified debts;
• transfer of intellectual property;
• settlement of shareholder loans;
• correction of corporate records;
• termination of related-party contracts;
• or completion of a restructuring.

A foreign buyer should identify which risks must be fixed before closing rather than merely compensated afterwards.

6. Regulatory Approval May Be Required Before the Acquisition

Some transactions cannot simply be signed and closed between private parties without regulatory analysis.

Competition law is particularly important.

Türkiye updated its merger-control framework in February 2026. The Competition Authority announced that the relevant turnover thresholds were significantly increased, including increases from TRY 250 million to TRY 1 billion for the individual threshold, TRY 750 million to TRY 3 billion for the relevant aggregate Türkiye threshold, and TRY 3 billion to TRY 9 billion for the relevant worldwide threshold.

The Authority subsequently updated its merger and acquisition guidelines in May 2026 to reflect the revised framework.

Whether a transaction requires notification depends on factors including:

• acquisition of control;
• turnover figures;
• group structures;
• transaction structure;
• and special rules potentially applicable to technology undertakings.

Competition clearance should therefore be assessed early.

Recent Competition Board decisions continue to demonstrate that substantial acquisitions can be made subject to clearance and, in some cases, commitments. For example, in July 2026 the Board conditionally cleared A101’s acquisition of sole control over CarrefourSA after evaluating competition concerns and commitments proposed by the buyer.

If regulatory approval is required, the SPA should usually make satisfactory clearance a condition to closing.

7. Representations and Warranties Are the Core Risk Allocation Mechanism

One of the most important sections of a Share Purchase Agreement is the seller’s representations and warranties.

These provisions require the seller to confirm that specified facts are true.

Typical warranties may relate to:

Corporate Matters

The seller may warrant that:

• the company was properly incorporated;
• corporate records are accurate;
• shares were validly issued;
• the seller owns the shares;
• no undisclosed share rights exist.

Financial Statements

The seller may warrant that:

• financial statements were properly prepared;
• they fairly reflect the financial position of the company;
• there are no undisclosed liabilities.

Tax

The seller may warrant that:

• tax returns were filed;
• taxes were paid;
• no undisclosed tax investigations exist;
• withholding obligations were satisfied.

Employees

The seller may warrant that:

• employee information is accurate;
• salaries and benefits have been paid;
• no material employee claims have been concealed;
• required social security contributions have been made.

Litigation

The seller may warrant that:

• all material litigation has been disclosed;
• no material claim has been threatened;
• no undisclosed enforcement proceedings exist.

Intellectual Property

The seller may warrant that:

• the target owns or validly licenses the intellectual property used in its business;
• no known infringement dispute exists;
• employees and contractors have transferred relevant rights.

Contracts

The seller may warrant that:

• all material contracts have been disclosed;
• the target is not in material breach;
• counterparties have not served termination notices.

Regulatory Compliance

The seller may warrant that:

• necessary licenses exist;
• the company has complied with applicable regulations;
• no undisclosed investigation is pending.

These warranties should be tailored to the actual company.

A generic template copied from another transaction may fail to address the most important risk.

8. Disclosure Is Just as Important as the Warranty

A seller rarely gives warranties without qualification.

Instead, the seller usually provides disclosures.

For example, the SPA may state:

“There is no litigation against the company, except as fairly disclosed in the Disclosure Letter.”

The Disclosure Letter may then identify an existing lawsuit.

That disclosure can prevent the buyer from later claiming that the warranty was breached in relation to the disclosed matter.

For this reason, buyers should carefully review:

• the Disclosure Letter;
• disclosure schedules;
• the data room;
• and the relationship between disclosed information and contractual warranties.

A badly drafted disclosure standard can allow the seller to argue that enormous quantities of uploaded documents constitute disclosure of every possible problem.

The buyer should therefore negotiate what qualifies as a valid and sufficiently specific disclosure.

9. General Warranties May Not Be Enough for Known Risks

If due diligence identifies a specific problem, relying solely on a general warranty may be inadequate.

Consider a target that is currently undergoing a major tax inspection.

The buyer already knows about the investigation.

Instead of relying only on a broad tax warranty, the SPA can include a specific indemnity covering liabilities arising from that investigation.

Specific indemnities are commonly considered for:

• identified tax risks;
• pending litigation;
• employment disputes;
• IP ownership problems;
• environmental matters;
• regulatory investigations;
• or historical contractual liabilities.

This allows the parties to allocate an identified risk directly.

10. Indemnification Clauses Must Be Carefully Drafted

An indemnification provision establishes when the seller must compensate the buyer for certain losses.

The contract should define:

• what constitutes a loss;
• which breaches trigger indemnification;
• whether indirect losses are covered;
• whether legal expenses are covered;
• whether tax gross-up applies;
• how third-party claims are handled;
• when the seller must be notified;
• and when payment must be made.

Foreign investors should be particularly cautious with vague contractual language translated from another legal system.

Terms familiar in English or U.S. M&A agreements may not automatically produce the same practical result under Turkish law.

The agreement should be structured with the applicable governing law and enforcement mechanism in mind.

11. Negotiate Liability Caps

Sellers typically do not want unlimited liability after closing.

The SPA may therefore contain a financial cap.

For example:

Purchase Price: EUR 10 million
General Warranty Cap: EUR 2 million.

Different caps may apply to different claims.

Fundamental matters such as:

• ownership of shares;
• seller authority;
• fraud;
• or certain tax claims

may be subject to higher caps or different treatment.

The buyer should not agree automatically to a single low cap covering every possible breach.

The cap structure should reflect the seriousness of each category of risk.

12. Pay Attention to De Minimis and Basket Provisions

An SPA may contain mechanisms designed to prevent trivial claims.

A de minimis threshold excludes claims below a specified amount.

For example:

Claims below EUR 5,000 cannot be brought.

A basket may require claims to exceed an aggregate threshold.

For example:

The buyer may only recover once valid claims exceed EUR 100,000.

These provisions can significantly reduce the buyer’s practical recovery rights.

The interaction between:

• de minimis;
• basket;
• deductible;
• tipping basket;
• and liability cap

should therefore be examined mathematically, not merely legally.

13. Time Limits Can Eliminate Otherwise Valid Claims

An SPA may provide that warranty claims must be brought within a specified period.

For example:

General warranties: 18 months
Tax warranties: 5 years
Fundamental warranties: longer period.

Foreign investors should ensure the claim period is realistic.

Some risks may not become visible until long after closing.

Tax or employment matters, in particular, may surface through later audits, lawsuits or inspections.

A very short contractual claim period can leave the buyer exposed to historical liabilities without effective recourse against the seller.

14. Escrow Can Be More Valuable Than a Strong Indemnity

A contractual right to recover EUR 2 million from the seller has little practical value if the seller has transferred all assets abroad and is unable or unwilling to pay.

For this reason, buyers frequently consider security mechanisms.

An escrow account may hold part of the purchase price for a defined period.

If a valid claim arises, the agreed amount may be paid from the escrow in accordance with the contractual mechanism.

Alternatives include:

• holdback;
• deferred payment;
• bank guarantee;
• parent-company guarantee;
• or other forms of security.

The appropriate structure depends on:

• seller creditworthiness;
• transaction size;
• identified risks;
• and the jurisdictions involved.

15. Earn-Out Provisions Can Create Major Post-Closing Disputes

Part of the purchase price may depend on future performance.

For example:

EUR 8 million paid at closing.

Additional EUR 3 million if EBITDA reaches an agreed level over the next two years.

This is known as an earn-out.

Earn-outs can help bridge disagreements about valuation.

However, they can also create disputes about how the business is operated after closing.

The seller may argue that the buyer deliberately reduced revenue or increased expenses to avoid paying the earn-out.

The buyer may argue that poor performance resulted from the business itself.

An earn-out clause should therefore define:

• the performance metric;
• accounting methodology;
• calculation period;
• permitted business changes;
• extraordinary items;
• access to information;
• calculation process;
• dispute-resolution procedure;
• and payment timing.

A one-paragraph earn-out provision can create years of litigation.

16. Seller Non-Compete Clauses Require Careful Drafting

A buyer may pay a significant premium for:

• customer relationships;
• goodwill;
• know-how;
• and market position.

The commercial value of the acquisition can be seriously affected if the seller immediately establishes a competing company.

The SPA may therefore contain:

• non-compete;
• non-solicitation;
• confidentiality;
• and employee non-poaching provisions.

However, restrictions should not be drafted without limits.

Their duration, geographic scope, activity scope and commercial justification should be assessed under applicable Turkish law and competition-law principles.

A clause saying that the seller can “never engage in any similar business anywhere in the world” may create enforceability concerns.

17. Make Sure Key Employees Remain After Closing

The company may be worth much less without its founders, CEO, software developers or sales team.

Foreign buyers should identify key personnel during due diligence.

Where appropriate, closing can be linked to:

• new employment contracts;
• retention arrangements;
• management agreements;
• confidentiality agreements;
• intellectual property assignments;
• incentive plans;
• or founder transition commitments.

The SPA should also address whether transaction bonuses or retention payments are treated as company expenses or seller expenses.

18. Do Not Ignore Change-of-Control Clauses

Important customer, supplier, lender and licensing agreements may contain change-of-control provisions.

These clauses may:

• require consent;
• permit termination;
• accelerate debt;
• or trigger renegotiation

when ownership of the target changes.

Suppose the buyer acquires 100% of a software company, but its largest customer has a contractual right to terminate following a change of control.

The buyer may technically acquire the company while simultaneously destroying a large part of its commercial value.

Material third-party consents should therefore be identified during due diligence and, where necessary, incorporated into the conditions precedent.

19. Governing Law Should Not Be Chosen Automatically

Foreign buyers may initially prefer English law, Swiss law or another familiar legal system.

However, the transaction involves shares in a Turkish company and mandatory Turkish corporate-law rules may remain relevant regardless of contractual governing law.

The parties should distinguish between:

• the law governing contractual obligations under the SPA;
• mandatory Turkish corporate rules governing the target and share transfer;
• and the procedural rules governing dispute resolution.

The most familiar governing law is not automatically the most practical choice.

20. Turkish Courts or Arbitration?

Another central SPA provision is dispute resolution.

The parties may choose Turkish courts or, where legally permissible and properly structured, arbitration.

International investors may prefer arbitration because it can offer:

• a neutral forum;
• specialist arbitrators;
• confidentiality;
• procedural flexibility;
• and international enforceability under applicable conventions.

However, arbitration is not automatically superior for every transaction.

Factors to consider include:

• transaction value;
• likely disputes;
• location of seller assets;
• need for urgent interim relief;
• governing law;
• language;
• institutional costs;
• and enforcement strategy.

The dispute clause should be drafted with the same care as the commercial provisions.

Ambiguous arbitration clauses can themselves become the first dispute.

21. Currency and Payment Clauses Matter for Foreign Buyers

Cross-border acquisitions commonly involve EUR, USD or another foreign currency.

The SPA should clearly address:

• payment currency;
• bank account details;
• applicable transfer expenses;
• withholding implications;
• exchange-rate issues;
• payment date;
• late-payment interest;
• and what constitutes effective receipt.

Where price adjustments are calculated in Turkish lira but payment is made in euros, the relevant exchange-rate mechanism should be expressly defined.

22. Tax Allocation Should Be Express

The parties should determine responsibility for:

• taxes arising before closing;
• taxes resulting directly from the transaction;
• stamp tax where applicable;
• withholding obligations;
• registration expenses;
• and professional costs.

A buyer should avoid discovering after signing that transaction-related taxes materially increase the acquisition cost.

Tax advisers should therefore review the SPA before execution.

23. Foreign Corporate Documents Should Be Prepared Early

Where the buyer is a foreign legal entity, transaction and corporate procedures may require documents issued outside Türkiye.

Depending on the relevant document and jurisdiction, requirements may include:

• apostille;
• legalization;
• notarization;
• sworn translation;
• corporate resolutions;
• certificates of incumbency;
• or powers of attorney.

Delays in preparing these documents can postpone an otherwise ready transaction.

Corporate-document requirements should therefore be identified early in the SPA process.

24. Signing and Closing Should Be Treated as Separate Events Where Necessary

Many international acquisitions distinguish between:

Signing – execution of the SPA.

and

Closing – completion of the share transfer and payment.

There may be days or months between them.

During that period, the seller may be required to operate the target in the ordinary course of business.

Interim covenants may prohibit the seller from taking actions such as:

• paying extraordinary dividends;
• issuing new shares;
• borrowing significant amounts;
• selling major assets;
• terminating key employees;
• entering unusual contracts;
• or changing management

without buyer consent.

These provisions protect the buyer against deterioration of the company between signing and closing.

25. Define Exactly What Must Be Delivered at Closing

The SPA should contain a detailed closing checklist.

Depending on the transaction, required items may include:

• share certificates;
• share transfer instruments;
• board resolutions;
• general assembly resolutions;
• updated share ledger;
• resignations of directors;
• appointment of new directors;
• powers of attorney;
• regulatory approvals;
• third-party consents;
• IP assignments;
• release of security interests;
• bank documentation;
• and corporate books.

The parties should understand whether closing obligations are simultaneous.

The buyer should not pay first and discover afterwards that essential transfer documents are missing.

Common Mistakes Foreign Buyers Make in Turkish SPAs

Foreign buyers frequently make mistakes such as:

1. Using an international SPA template without adapting it to Turkish corporate law.
2. Agreeing the purchase price before completing adequate due diligence.
3. Paying the full purchase price before effective closing.
4. Failing to verify ownership of the shares.
5. Accepting weak seller warranties.
6. Ignoring disclosure schedules.
7. Failing to obtain a specific indemnity for known liabilities.
8. Accepting an excessively low liability cap.
9. Accepting very short warranty-claim periods.
10. Failing to secure seller obligations through escrow or holdback.
11. Ignoring change-of-control provisions in major contracts.
12. Failing to examine Competition Authority or sector-specific approval requirements.
13. Drafting an unclear earn-out mechanism.
14. Ignoring intellectual property ownership.
15. Using an ambiguous arbitration clause.
16. Treating signing and closing as the same event when regulatory approvals remain outstanding.

Frequently Asked Questions

Is a Share Purchase Agreement Mandatory in Türkiye?

The precise corporate law requirements for transferring shares depend on the type of company and relevant circumstances. However, particularly in substantial acquisitions, parties commonly enter into an SPA to regulate the commercial and legal terms of the transaction. Official Turkish investment guidance also recognizes the widespread use of share purchase agreements in acquisitions.

Can a Foreign Buyer Purchase 100% of a Turkish Company?

As a general rule, foreign ownership is permitted in ordinary Turkish companies, subject to sector-specific restrictions and regulatory requirements.

Can the SPA Be Written in English?

International transactions are frequently negotiated in English. However, Turkish-language documentation may still be necessary for particular corporate, registry, regulatory or enforcement procedures. The applicable language requirements should be considered for the specific transaction.

Should the Purchase Price Be Paid Before the Shares Are Transferred?

The payment and share-transfer mechanics should normally be coordinated carefully. Depending on the transaction, simultaneous closing, escrow or other mechanisms can reduce execution risk.

Can the Seller Remain Liable After the Shares Are Sold?

Yes. The SPA may impose continuing contractual obligations on the seller through warranties, indemnities, tax covenants, confidentiality obligations, restrictive covenants and other post-closing provisions.

Is Competition Authority Approval Always Required?

No. Whether approval is required depends on the transaction and applicable turnover and control criteria. Türkiye’s merger-control thresholds were updated in 2026, so current thresholds and transaction-specific circumstances should be reviewed before closing.

Conclusion

A Share Purchase Agreement should not be treated as a document that merely records an agreed purchase price.

For a foreign buyer acquiring a Turkish company, the SPA is the principal contractual instrument used to convert due-diligence findings into legal protection.

The buyer should focus particularly on:

• ownership of the shares;
• purchase-price mechanics;
• conditions precedent;
• representations and warranties;
• disclosures;
• specific indemnities;
• liability caps;
• claim periods;
• escrow and holdback mechanisms;
• earn-out provisions;
• change-of-control issues;
• regulatory approvals;
• closing mechanics;
• governing law;
• and dispute resolution.

The most important principle is that a legal risk discovered during due diligence should not simply be mentioned in a report and forgotten.

It should either:

be eliminated before closing, reduce the purchase price, be expressly assumed by the seller, or be secured through an appropriate contractual mechanism.

An SPA that fails to allocate identified risks effectively may leave a foreign buyer owning 100% of the company but also bearing 100% of problems created before the acquisition.

For this reason, foreign investors purchasing shares in Turkish companies should ensure that the due diligence process and SPA negotiations are handled together rather than as separate exercises.

This article provides general information regarding Turkish law and does not constitute legal advice. Share acquisitions should be evaluated according to the specific company, transaction structure, applicable sector, parties and regulatory framework.