Introduction: Why Is a Shareholders’ Agreement So Important for Foreign Investors in Turkey?

A foreign investor entering a Turkish company may spend weeks negotiating the investment amount and shareholding percentage while spending surprisingly little time determining what those shares actually allow the investor to control.

This can be a serious mistake.

Owning 40%, 49% or even 51% of a Turkish company does not, by itself, answer questions such as:

• Who appoints the board?
• Who controls company bank accounts?
• Can the majority shareholder borrow money without the minority investor’s approval?
• Can new shares be issued and dilute the foreign investor?
• Can one shareholder enter contracts with companies it separately owns?
• Who owns the intellectual property used by the Turkish company?
• Can one shareholder sell its shares to a competitor?
• What happens if the shareholders cannot agree?
• How can the foreign investor exit the company?
• Which court or arbitration tribunal will hear a dispute?

A properly drafted Shareholders’ Agreement (“SHA”) is intended to answer these questions before they become disputes.

Turkey’s foreign direct investment system is based on the principle of equal treatment. International investors may generally establish the company forms available under the Turkish Commercial Code and hold shares on the same basic footing as local investors. Turkish official investment guidance also expressly recognises shareholders’ agreements as a common tool for governing relationships between joint venture partners.

This is particularly important because foreign investors are not generally required to have a Turkish shareholder simply because they are investing in Turkey. Special rules may apply in regulated industries, but ordinary commercial companies can generally be foreign-owned.

Therefore, if a foreign investor chooses to enter into partnership with a Turkish individual or company, that relationship should be structured intentionally.

The SHA should be treated as the constitutional commercial agreement between the shareholders, complementing the articles of association and Turkish corporate-law requirements.

For sophisticated joint ventures, an A.Ş. is often preferred because of its flexibility concerning share groups and shareholder structuring. Official Turkish investment guidance also identifies the A.Ş. as the commonly preferred form for many JV arrangements.

Regardless of whether the company is an A.Ş. or Ltd. Şti., however, the shareholder relationship should be addressed in detail.

The following are 15 clauses that foreign investors should seriously consider when negotiating a shareholders’ agreement for a Turkish company in 2026.

1. Share Ownership, Initial Contributions and Purpose of the Investment

Every SHA should begin by stating clearly:

• who the shareholders are;
• how many shares each holds;
• what percentage of the company each shareholder owns;
• how much each shareholder contributes;
• and what each shareholder is expected to contribute beyond cash.

This may appear obvious, but many shareholder disputes begin because the parties had different expectations about what the other shareholder was supposed to provide.

Example

A foreign investor contributes:

EUR 5 million + technology + international brand.

The Turkish partner contributes:

TRY-equivalent capital + local customer network + management expertise.

If the agreement records only the share percentages, the parties may later disagree about whether the Turkish shareholder actually delivered the promised customer network.

The SHA should therefore define non-cash commercial commitments carefully.

If the Turkish shareholder promises:

• distribution capability;
• introductions to strategic customers;
• property;
• licences;
• machinery;
• employees;
• or know-how,

the obligations should be measurable where possible.

Likewise, where intellectual property is contributed, the agreement should state whether the contribution involves:

ownership transfer

or merely:

a licence to the company.

Foreign investors should avoid giving permanent equity in exchange for vaguely defined promises.

2. Board Composition and Management Appointment Rights

A shareholder’s ownership percentage is only one part of corporate control.

Board or manager appointment rights may be equally important.

The SHA should specify:

• number of directors;
• which shareholder nominates which directors;
• appointment and removal rights;
• chairman;
• quorum;
• voting requirements;
• replacement rights;
• and whether specific directors must approve certain decisions.

Example

Shareholding:

Foreign Investor: 40%
Turkish Partner: 60%

Board:

5 members

Foreign Investor nominates 2.

Turkish Partner nominates 3.

If ordinary board decisions are made by simple majority, the Turkish shareholder controls the board.

However, the parties could provide that certain strategic matters require approval from at least one foreign-investor nominee.

This gives the foreign investor meaningful protection without interfering with daily operations.

The agreement should also prevent one shareholder from creating a deadlock simply by refusing to appoint a director or attend meetings.

3. Reserved Matters and Veto Rights

For many foreign investors, this is the most important part of the SHA.

Reserved matters are important decisions that cannot be taken without an enhanced level of approval.

Typical reserved matters may include:

• amendments to the articles;
• capital increases;
• issuance of new shares;
• major borrowing;
• giving guarantees;
• sale of significant assets;
• acquisition of another business;
• change in business activity;
• approval of material related-party transactions;
• appointment or dismissal of key executives;
• sale or licensing of core intellectual property;
• creation of subsidiaries;
• liquidation;
• and material litigation settlements.

A minority shareholder may therefore negotiate effective protection even without owning 50%.

Example

Foreign Investor owns only 35%.

Turkish Partner owns 65%.

The Turkish partner has ordinary operational control.

However, issuing new shares, selling IP, borrowing more than EUR 1 million or changing the company’s primary business requires approval from the foreign investor.

The 35% interest may therefore be far more protected than a simple percentage analysis suggests.

Do Not Overuse Veto Rights

Reserved matters should remain strategic.

If every supplier contract requires both shareholders’ approval, the company may become impossible to operate.

A good SHA separates:

ordinary management

from

fundamental investor decisions.

For large joint ventures, strategic veto rights can also be relevant when analysing whether shareholders exercise joint control for Turkish competition-law purposes. Turkey materially updated its merger-control rules and turnover thresholds in February 2026.

4. Representation, Signature Authority and Bank Account Controls

This clause is often underestimated.

A shareholder may have strong voting rights but still lose control of the business if another shareholder has unrestricted authority to legally bind the company.

The SHA should address:

• authorised signatories;
• individual versus joint signature;
• payment thresholds;
• bank transfer authority;
• ability to borrow;
• ability to grant guarantees;
• and power to dispose of assets.

Example

Payments under TRY 500,000:

one authorised executive.

Payments between TRY 500,000 and TRY 5 million:

two authorised executives jointly.

Loans, guarantees or asset disposals over TRY 5 million:

board approval + joint signature.

The foreign shareholder should also have reliable access to banking information.

A company should never depend on a structure where:

“Only the Turkish partner has access to internet banking.”

For a multimillion-euro investment, this is not a minor administrative matter. It is a fundamental internal-control issue.

5. Future Funding, Capital Increases and Anti-Dilution Protection

Companies frequently need more money after incorporation.

The shareholders’ agreement should therefore answer:

Who must fund the company later?

Possible funding routes include:

• capital increases;
• shareholder loans;
• third-party bank finance;
• external equity investment;
• or retained earnings.

The parties should determine whether future contributions are:

mandatory

or

optional.

Dilution Risk

Assume:

Foreign investor owns 40%.

Turkish shareholder owns 60%.

The company later needs EUR 10 million.

The foreign investor temporarily cannot contribute.

If the majority shareholder funds the entire capital increase, the foreign investor’s percentage could potentially fall substantially.

Capital increases should not be used artificially to eliminate or pressure a minority investor.

The SHA should therefore regulate:

• participation rights;
• pre-emption;
• funding notices;
• valuation;
• consequences of non-participation;
• shareholder loans as alternatives;
• and dilution.

Anti-dilution protection does not necessarily mean the investor can permanently block legitimate financing.

Instead, it should ensure that dilution occurs transparently and under previously agreed rules.

6. Information, Reporting and Audit Rights

A shareholder cannot protect an investment without information.

This is especially true for a foreign investor whose management team may be located in:

London, Dubai, Frankfurt, New York or Singapore.

The SHA can require management to provide periodic information such as:

• monthly management accounts;
• quarterly financial statements;
• cash flow;
• bank balances;
• accounts receivable;
• accounts payable;
• budget versus actual results;
• tax liabilities;
• borrowing;
• litigation;
• material contracts;
• and compliance issues.

Foreign shareholders may also negotiate reasonable inspection and audit rights.

Why This Matters

Imagine a foreign investor learns eighteen months after the fact that:

• the company borrowed TRY 80 million;
• several major customers stopped paying;
• and tax authorities started an audit.

The problem is not merely the financial situation.

It is that the governance system allowed the situation to develop without the investor knowing.

Information rights are therefore not administrative conveniences.

They are investor-protection mechanisms.

7. Related-Party Transactions and Conflict-of-Interest Controls

This clause is particularly important where the Turkish partner owns other local businesses.

Suppose the Turkish shareholder owns:

• the JV company;
• a logistics company;
• a property company;
• and a consulting business.

Without appropriate controls, the shareholder might cause the jointly owned company to pay:

• inflated rent;
• excessive consultancy fees;
• overpriced logistics charges;
• or unusual management fees

to companies that the Turkish shareholder owns independently.

The result is economically similar to distributing company value only to one shareholder.

The SHA should therefore regulate transactions between the company and:

• shareholders;
• directors;
• affiliated entities;
• family members;
• and businesses controlled by shareholders.

Possible protections include:

• disclosure requirements;
• arm’s-length pricing;
• board approval;
• reserved-matter treatment above thresholds;
• independent benchmarking;
• and abstention by conflicted decision-makers where appropriate.

For cross-border group transactions, Turkish transfer-pricing rules may also become relevant.

8. Dividend and Profit Distribution Policy

A profitable company can still create shareholder disputes if the shareholders have different financial objectives.

One investor may want:

growth and reinvestment.

The other may want:

annual dividends.

A majority shareholder can potentially exert pressure on a minority by controlling whether profits are distributed, subject to corporate-law limitations and fiduciary considerations.

The SHA can therefore establish a dividend policy.

For example:

After maintaining agreed reserves and satisfying financing obligations, at least a specified portion of distributable profit may be considered for distribution unless the board approves a defined investment need.

The clause should not remove necessary corporate flexibility.

However, the parties should know whether the investment is intended primarily to produce:

cash distributions

or

long-term capital appreciation.

Failure to discuss this issue early is a frequent source of shareholder conflict.

9. Intellectual Property, Confidentiality and Technology Rights

For technology, manufacturing and branded businesses, IP provisions may be among the most commercially valuable parts of the entire shareholders’ agreement.

Foreign investors may bring:

• software;
• trademarks;
• patents;
• designs;
• databases;
• proprietary processes;
• technical know-how;
• or trade secrets

into the Turkish business.

The agreement should distinguish:

Background IP

Technology and intellectual property that one shareholder owned before establishing the company.

Foreground IP

Technology developed by the Turkish company or through the joint venture after establishment.

The foreign investor should not automatically transfer all background IP permanently to the Turkish company.

A licence may be more appropriate.

The agreement should therefore address:

• ownership;
• licence scope;
• territory;
• exclusivity;
• sublicensing;
• modification rights;
• termination;
• confidentiality;
• ownership of improvements;
• and what happens after shareholder exit.

Example

US software company owns the platform.

Turkish JV receives an exclusive Turkish licence.

The US parent retains ownership.

New localisation code created by the JV is dealt with under separately agreed rules.

If the partnership later ends, ownership remains clear.

This is substantially safer than discovering during a shareholder dispute that nobody knows who legally owns the platform.

10. Non-Compete, Non-Solicitation and Corporate Opportunity Clauses

A shareholder should not normally be able to use the jointly owned company merely as a source of:

• confidential information;
• customers;
• employees;
• suppliers;
• and market intelligence

and then divert that value into a competing business.

For this reason, a SHA may contain proportionate provisions dealing with:

• competition;
• solicitation of employees;
• solicitation of customers;
• misuse of confidential information;
• and diversion of business opportunities.

Corporate Opportunity Example

The company distributes medical devices in Turkey.

The Turkish shareholder receives an approach from a major hospital chain.

Instead of referring the opportunity to the jointly owned company, the shareholder directs it to another company that it owns 100%.

The SHA should define when a commercial opportunity belongs to the joint company and when shareholders remain free to pursue it independently.

Restrictions should be drafted carefully and proportionately, particularly because competition-law considerations may arise if restrictions are excessively broad.

11. Restrictions on Share Transfers, Pre-emption and Right of First Refusal

A shareholder relationship is personal in an economic sense.

The foreign investor may choose to work with Turkish Partner A.

That does not necessarily mean the investor wants to become partners with:

Turkish Partner A’s competitor, relative, creditor or an unknown investment fund.

The SHA should therefore regulate future transfers.

Possible mechanisms include:

• lock-up periods;
• permitted affiliate transfers;
• pre-emption rights;
• right of first refusal;
• right of first offer;
• prohibited transferees;
• and competitor restrictions.

Pre-emption

If one shareholder wishes to sell, the existing shareholder may have the right to acquire the shares before they are sold to an outsider.

Right of First Refusal

A shareholder receives a bona fide third-party offer and must first give the other shareholder the opportunity to match it.

These mechanisms provide some control over who enters the shareholder structure.

They should be carefully coordinated with the transfer rules applicable to the relevant Turkish company type.

E-TUYS reporting must also be considered where ownership changes involve foreign investment; Turkey’s official system includes an FDI Share Transfer Data Form for this purpose.

12. Tag-Along Rights

A tag-along right protects minority shareholders when the controlling shareholder sells.

Example:

Turkish Partner: 70%.

Foreign Investor: 30%.

A strategic purchaser offers to buy the Turkish partner’s 70%.

Without tag-along protection, the foreign investor could remain as a 30% minority shareholder beside a new controlling shareholder it never selected.

A tag clause can permit the minority investor to require that the buyer also purchase all or a proportionate amount of the minority investor’s shares on equivalent terms.

This protection becomes especially important where the value of a minority stake depends significantly on who controls the company.

Matters to Define

A tag clause should address:

• triggering percentage;
• whether the right covers all shares;
• price equality;
• payment terms;
• non-cash consideration;
• seller warranties;
• transaction costs;
• and procedural notices.

Poorly drafted tag rights can become ineffective at precisely the moment they are needed.

13. Drag-Along Rights

A drag-along right deals with the opposite problem.

Assume:

Foreign investor owns 75%.

Turkish shareholder owns 25%.

A multinational strategic purchaser offers EUR 100 million for the entire company—but only if it can acquire 100%.

The minority shareholder refuses to sell.

Without an effective drag mechanism, the transaction may collapse.

A properly structured drag clause can allow a qualifying majority to require the minority to participate in the sale.

The minority should normally receive corresponding economic terms.

Key Issues

The SHA should specify:

• minimum ownership needed to trigger drag;
• whether a minimum valuation applies;
• whether the transaction must be arm’s length;
• identical price requirements;
• treatment of warranties;
• liability caps;
• and completion procedure.

Tag and drag rights should generally be negotiated together because they regulate opposite sides of the same exit issue.

14. Deadlock, Default and Forced Exit Mechanisms

Disagreement is inevitable in a long-term shareholder relationship.

Permanent paralysis is not.

This clause is especially important in:

50/50 companies

and JVs where each shareholder has important veto rights.

What Is a Deadlock?

The SHA should first define what qualifies.

It may include failure to agree repeatedly on:

• annual budget;
• business plan;
• major funding;
• CEO appointment;
• fundamental investment;
• or another reserved matter essential to operations.

Not every minor disagreement should trigger a corporate divorce.

Escalation

A sensible structure may provide:

Stage 1: board negotiation.

Stage 2: senior shareholder representatives.

Stage 3: mediation or expert determination for specified issues.

Stage 4: buy-sell or exit mechanism.

The official Turkish investment framework recognises SHA use in JV structures, and Turkish investment guidance has also acknowledged the commercial role of put and call concepts in resolving JV deadlock arrangements. The precise mechanism nevertheless needs to be adapted to Turkish law and the particular company.

Default Events

Separate provisions should address serious shareholder misconduct, including:

• fraud;
• material breach;
• insolvency;
• failure to provide committed capital;
• prohibited competition;
• confidentiality breach;
• corruption;
• sanctions issues;
• or misuse of company assets.

Possible consequences can include damages, call rights or other agreed remedies, subject to enforceability.

15. Governing Law, Dispute Resolution and Exit Mechanics

The SHA should end by answering a question nobody likes asking during a successful investment:

What happens if this relationship completely breaks down?

A foreign investor should not transfer millions of euros under an agreement saying only:

“The parties will resolve disputes amicably.”

The agreement should determine:

• governing law;
• competent courts or arbitration;
• arbitral institution if applicable;
• seat of arbitration;
• language;
• number of arbitrators;
• interim relief;
• notices;
• confidentiality;
• enforcement;
• and survival of key contractual provisions.

Turkish Company Law Remains Relevant

Even where shareholders select arbitration or a foreign governing law for certain contractual issues, a company established in Turkey remains subject to mandatory Turkish corporate-law rules concerning its corporate existence and legally mandatory governance procedures.

Therefore, a foreign-law boilerplate clause should not simply be copied into a Turkish SHA without analysing its interaction with the Turkish company.

Exit Should Also Be Addressed

The final clause package should determine potential exit scenarios such as:

• voluntary sale;
• shareholder default;
• deadlock;
• strategic sale;
• put option;
• call option;
• IPO;
• liquidation;
• or sale after a defined investment period.

A sophisticated investor should know the exit path on the day it invests—not only on the day it wants to leave.

Shareholders’ Agreement vs Articles of Association: Why Both Matter

A frequent mistake is believing that an SHA alone completely determines how the Turkish company operates.

The shareholders’ agreement is primarily contractual.

The Turkish company, however, also operates under:

• the Turkish Commercial Code;
• its registered articles of association;
• formal corporate decisions;
• Trade Registry procedures;
• and mandatory law.

Accordingly, key shareholder protections should be coordinated with the articles of association to the extent permitted by Turkish law.

Official Turkish investment guidance confirms that shareholders’ agreements are a common mechanism for governing JV relationships, while the company itself remains governed by the legal rules applicable to the chosen company form.

The practical principle is:

Do not draft the SHA and articles as two unrelated documents.

The commercial deal should be agreed first.

It should then be implemented using both contractual and corporate-law mechanisms.

Why A.Ş. Structures Are Often Preferred by Foreign Investors

Turkey’s official foreign investment guidance specifically notes that joint stock companies are commonly preferred for JV investments because of the possibility of creating share groups and their shareholder-liability characteristics compared with limited companies.

As of 2026, the statutory minimum capital amounts are:

• A.Ş.: TRY 250,000
• Non-public A.Ş. using registered capital: TRY 500,000
• Ltd. Şti.: TRY 50,000

Companies already existing below the revised statutory minimums must increase their capital by 31 December 2026 under the current transitional provision.

For foreign investors expecting:

• future equity rounds;
• complex governance;
• institutional investors;
• or a future strategic sale,

the A.Ş. may therefore often provide greater structural flexibility.

The decision should nevertheless be made transaction by transaction.

Additional 2026 Compliance Issues for Foreign-Invested Companies

A shareholders’ agreement cannot substitute for statutory compliance.

Foreign-invested companies should also be aware of several current reporting and governance requirements.

E-TUYS

Foreign investment information concerning activity, capital and share transfers is collected electronically through E-TUYS.

Therefore, if an SHA results in:

• new foreign capital;
• a foreign shareholder joining;
• an investor exiting;
• or ownership percentages changing,

the E-TUYS implications should be considered.

ETDS

The Ministry of Trade confirms that companies registered from 1 January 2026 are required to maintain their:

• share ledger; and
• general assembly meeting and negotiation book

electronically through ETDS.

This means shareholder rights negotiated in the SHA must also be supported by proper corporate records and legally valid decisions.

Work Permits

A foreign shareholder does not automatically obtain the right to work in Turkey merely through share ownership.

If a foreign investor will actively work as a shareholder-manager, work permit criteria must be separately reviewed.

Current rules generally include TRY 500,000 financial thresholds, a 20% ownership criterion for the ordinary foreign-partner category and a five-Turkish-employee requirement from the applicable stage. A foreign partner with at least USD 100,000 capital participation benefits from an exception from those specific company-partner criteria. Current rules also contain a new exception effective from 3 August 2026 for certain applicants with qualifying prior lawful residence in Turkey.

This should be considered when negotiating ownership percentages.

Practical Example: Foreign Investor Owns 40%, Turkish Partner Owns 60%

Assume a foreign technology company invests EUR 4 million into a Turkish A.Ş.

The ownership is:

Foreign Investor: 40%

Turkish Partner: 60%.

The foreign investor contributes:

technology, international brand and capital.

The Turkish partner contributes:

local management and customer relationships.

A well-structured SHA could provide the following:

The foreign investor appoints two of five directors.

Certain reserved matters require approval of at least one foreign-investor director.

Borrowing above a defined threshold requires joint approval.

Large bank transfers require two signatures.

The company cannot issue new shares without following agreed participation procedures.

Monthly financial reporting must be sent to both shareholders.

Related-party transactions with the Turkish shareholder’s companies require enhanced approval.

The foreign investor retains ownership of its background technology and grants the Turkish company a licence.

Both shareholders are subject to agreed confidentiality and proportionate competition restrictions.

Share transfers are subject to pre-emption procedures.

If the Turkish 60% shareholder sells control, the foreign investor receives tag-along rights.

If a qualifying third party offers to acquire 100%, agreed drag-along provisions may apply.

Deadlock triggers escalation before any exit mechanism is activated.

Disputes are resolved under the agreed legal and arbitration/court framework.

This is far more protective than an agreement simply saying:

“Investor owns 40%, Turkish partner owns 60%.”

Practical Example: 50/50 Joint Venture

Assume:

German Manufacturer: 50%.

Turkish Manufacturer: 50%.

Each side appoints two directors.

Important decisions require approval of both parties.

Without a deadlock clause, the company can become paralysed immediately after the shareholders disagree about the annual budget.

A stronger SHA might provide:

1. operational management can make decisions within an approved budget;
2. strategic matters require both shareholder groups;
3. unresolved strategic matters go to CEOs of both parent companies;
4. technical valuation disagreements go to an independent expert;
5. genuine deadlock continuing beyond a defined period triggers a negotiated buy-sell mechanism.

The parties have not eliminated disagreement.

They have eliminated indefinite corporate paralysis.

Practical Example: Foreign Minority Investor

Assume a private equity investor buys 25% of a Turkish business.

The founder retains 75%.

The investor does not need to manage the company every day.

Instead, it might negotiate protections including:

• one board seat;
• veto over major debt;
• veto over new share issues;
• veto over sale of the business;
• information and audit rights;
• related-party transaction controls;
• anti-dilution rights;
• tag-along;
• agreed exit period;
• and drag rights structured around a future strategic sale.

This illustrates an important principle:

A minority shareholder does not necessarily need operating control. It needs protection against fundamental value destruction.

Frequently Asked Questions About Shareholders’ Agreements in Turkey

Is a shareholders’ agreement mandatory in Turkey?

Not in every company. However, it is widely used for joint ventures and sophisticated investment arrangements. Official Turkish investment guidance specifically recognises it as common practice.

Can foreign investors sign a shareholders’ agreement with Turkish shareholders?

Yes.

Does a foreign investor need a Turkish shareholder?

Generally no for ordinary businesses. International investors have the same broad establishment rights as domestic investors, subject to special sector restrictions.

What are the most important SHA clauses for a minority foreign investor?

Reserved matters, board representation, information rights, anti-dilution protection, bank/signature controls, related-party transaction protection, tag-along rights and exit provisions are particularly important.

Is 51% ownership enough to protect an investor?

Not necessarily. Corporate governance, voting thresholds, articles, board rights and signature authority are equally important.

What is a reserved matter?

A reserved matter is a strategically important decision that requires enhanced shareholder or board approval.

Can a 30% shareholder have veto rights?

Potentially yes, subject to Turkish corporate law and the way those rights are structured.

What is anti-dilution protection?

It is protection designed to prevent or regulate reductions in the investor’s ownership percentage when new shares are issued or capital is increased.

What is a tag-along right?

A tag-along allows a minority shareholder to participate when the controlling shareholder sells its shares, subject to the contractual conditions.

What is a drag-along right?

A drag-along may allow a qualifying majority shareholder to require minority shareholders to participate in a full-company sale on agreed terms.

What should happen in a 50/50 deadlock?

The SHA should normally contain a staged mechanism involving negotiation, escalation and, if necessary, an agreed final exit or buy-sell mechanism.

Should the foreign investor transfer its technology to the Turkish company?

Not automatically. Retaining ownership and granting an appropriately structured licence may sometimes provide stronger protection.

Should bank authority be included in the SHA?

Yes, especially where the foreign investor is not involved in daily Turkish management.

Can the Turkish partner do business with another company it owns?

Potentially, but related-party transactions should be appropriately disclosed, priced and approved.

Are shareholders’ agreements enough without proper corporate records?

No. Formal corporate procedures, articles, share records and legally required company books must also be maintained.

What changed regarding corporate books in 2026?

Companies newly registered from 1 January 2026 must keep the share ledger and general assembly meeting and negotiation book through ETDS.

Conclusion: What Should a Foreign Investor Demand in a Turkish Shareholders’ Agreement?

A shareholders’ agreement should be drafted to answer a simple but important question:

What happens to the foreign investor’s money if the shareholders stop agreeing?

When the business is successful and the shareholders have an excellent relationship, many provisions of an SHA may appear unnecessary.

The importance of the agreement becomes obvious only when circumstances change.

A shareholder may need additional funding.

The majority may want to issue new shares.

One shareholder may want to sell.

A major buyer may offer to acquire the entire company.

The Turkish partner may establish another business.

The foreign investor may discover an undisclosed related-party transaction.

The board may become deadlocked.

At that stage, saying:

“We trusted each other when we started”

does not solve the legal problem.

The strongest SHA for a foreign investor should therefore address 15 core areas:

1. Share ownership and contributions
2. Board composition and management rights
3. Reserved matters and veto rights
4. Signature and banking controls
5. Future funding and anti-dilution
6. Information and audit rights
7. Related-party transactions
8. Dividend policy
9. Intellectual property and confidentiality
10. Non-compete and corporate opportunities
11. Share transfer restrictions and pre-emption
12. Tag-along rights
13. Drag-along rights
14. Deadlock and shareholder default
15. Exit, governing law and dispute resolution

These provisions should not be copied mechanically from a UK, US, UAE or Delaware template.

A Turkish company remains subject to Turkish corporate law and mandatory corporate procedures.

Accordingly, the commercial rights agreed in the SHA should be coordinated with the company’s articles of association and corporate governance framework.

Foreign investors should also remember that regulatory compliance continues beyond the SHA.

Foreign-invested companies may have E-TUYS reporting obligations concerning capital and share transfers.

Companies newly incorporated from January 1, 2026 must operate under the current ETDS regime for the share ledger and general assembly book.

Where foreign shareholder-managers will actually work in Turkey, the company’s ownership and capital structure may also affect work-permit planning under the current 2026 criteria.

For larger joint ventures or acquisitions, strategic veto rights and ownership arrangements can also have Turkish merger-control consequences. Turkey materially increased its merger-control thresholds in February 2026 and updated its relevant control guidance later that year.

The correct process for a foreign investor should therefore be:

commercial deal → ownership structure → governance analysis → shareholders’ agreement → articles of association → regulatory review → incorporation/investment → corporate records → ongoing compliance.

Most importantly, a shareholders’ agreement should be negotiated before the investor loses bargaining power.

The best time to negotiate:

• veto rights;
• information rights;
• anti-dilution protection;
• tag rights;
• bank controls;
• and exit rights

is before the capital has been transferred.

After the foreign investor has already paid the purchase price or invested several million euros, the other shareholder may have very little incentive to grant additional rights.

This is why the most important question before investing in a Turkish partnership is not simply:

“What percentage of shares will I own?”

It is:

“What decisions can be taken without me, what can happen to my ownership percentage, how can company value leave the business, and how can I exit if the relationship fails?”

A carefully drafted shareholders’ agreement should provide clear answers to all four questions.

For foreign investors, those answers can be considerably more valuable than the nominal percentage printed next to their name in the share ledger.

This article reflects Turkish corporate, foreign-investment, competition and work-permit rules and publicly available official guidance as of August 2026. It is intended for general informational purposes only and does not constitute transaction-specific legal, tax, corporate or investment advice. Every shareholders’ agreement should be tailored to the company’s legal form, shareholding structure, sector, investment amount, governance model, intellectual property and intended exit strategy.