Purchasing Company Shares in Turkey

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açık Kasım 28, 2025

1. Why buy company shares in Turkey?

Acquiring shares in an existing Turkish company (rather than establishing a new entity) is often chosen because:

The target already has licenses, permits, and registrations in place.
The target has a ready customer base, employees, contracts, and know-how.
The buyer can secure market access quickly, especially in regulated sectors such as health, energy, or finance (subject to regulatory approvals).
A share deal can be structured so that the business continues without interruption—employees, contracts and operations remain under the same legal entity.

On the other hand, the buyer also takes over the history and hidden risks of the company: tax exposures, social security debts, litigation, regulatory non-compliance, and even criminal risks in some cases. That is why due diligence and proper transaction documentation are essential.

2. Core legal framework for buying shares in Turkey

The main pieces of legislation governing share acquisitions in Turkey are:

Turkish Commercial Code No. 6102 (TCC) – regulates company types, corporate governance, share classes and share transfers.
Foreign Direct Investment Law No. 4875 – sets out the principle of equal treatment between foreign and domestic investors, and establishes a notification-based system instead of prior screening for most investments.
Capital Markets Law – applicable if the target is a publicly held joint stock company (e.g. listed on Borsa İstanbul).
Sector-specific legislation – for banking, insurance, energy, aviation, media, etc., where share acquisitions may require regulatory approval.
Competition Law – share acquisitions exceeding certain turnover thresholds may require merger control notification to the Turkish Competition Authority.

In most sectors, foreign individuals and companies can acquire shares in Turkish entities under the same rules as Turkish investors, with only a few strategic sectors subject to restrictions or licensing conditions.

3. Company types and what “shares” mean under Turkish law

3.1 Joint stock companies (Anonim Şirket – A.Ş.)

A joint stock company (JSC) is the preferred form for larger businesses, listed companies, and entities that may attract institutional investors. Under current rules:

JSCs allow full foreign ownership, subject to sector-specific rules.
Shareholders’ liability is limited to their capital commitment.
Shares can be registered (nama yazılı) or bearer (hamiline yazılı).
JSC shares can be represented by share certificates, which makes transfer procedures clearer and sometimes more practical.

For private, non-listed JSCs, share transfers are mostly a matter of contract and corporate records. For public JSCs, transfers are effected via the central securities depository and capital markets infrastructure.

3.2 Limited liability companies (Limited Şirket – Ltd. Şti.)

A limited liability company (LLC) is extremely common for small and medium-sized businesses. Under Turkish law:

LLC equity is divided into “quotas” rather than classical share certificates.
LLCs also allow full foreign ownership in most sectors.
The transfer of quotas is more formal and restrictive than JSC shares:
- It requires a written agreement notarized by a Turkish notary,
- Usually needs general assembly approval, and
- Must be registered with the Trade Registry and recorded in the share (quota) ledger.

The Articles of Association (AoA) of an LLC can restrict or even prohibit share transfers, or grant other shareholders a right of first refusal. This makes LLC acquisitions heavily dependent on careful review of the AoA and the consent of existing shareholders.

3.3 Why the company type matters to a buyer

If you are acquiring a JSC, the transaction can be more flexible and easier to structure as an M&A deal, especially where there are many shareholders or future capital markets plans.
If you are acquiring an LLC, you must be prepared for more formalities and potential restrictions, but LLCs are often simpler to manage post-acquisition and are widely used in practice.

4. Share deal vs. asset deal in Turkey

Before buying shares, it is important to understand the distinction between a share deal and an asset deal:

In a share deal, the buyer acquires the shares (or quotas) of the company. The legal entity remains the same, with all its assets, contracts, employees,

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Purchasing Company Shares in Turkey: A Comprehensive Legal Guide for Investors

1. Introduction

Purchasing company shares in Turkey is one of the most effective ways to enter the Turkish market, scale an existing business, or acquire a strategic asset without going through the entire process of setting up a new entity. Instead of forming a company, obtaining licences and building everything from zero, the investor steps into an already functioning vehicle.

However, buying shares in a Turkish company is not just a business decision about price and commercial terms. It is also a legal transaction governed by detailed rules on company law, foreign investment, competition, tax, and sometimes sector-specific regulation. If those rules are overlooked, the investor may end up buying a company with hidden tax debts, labour disputes, or regulatory risks.

This article provides a long-form, practice-oriented overview of purchasing company shares in Turkey. It focuses on private companies (non-listed), and explains key issues that matter in real transactions: company types, formalities, due diligence, share purchase agreements, foreign investor requirements, and typical pitfalls. It does not give case-specific advice, but it is designed to help investors and advisors understand the landscape and ask the right questions.

2. Corporate Forms in Turkey and Why They Matter

When you plan to buy shares in a Turkish company, the first question is: what type of company is the target? Turkish law allows several corporate forms, but in practice almost all M&A transactions involve one of two:

Joint Stock Company (Anonim Şirket – A.Ş.)
Limited Liability Company (Limited Şirket – Ltd. Şti.)

Understanding the differences is crucial, because they directly affect how shares are transferred, what formalities must be followed, and what risks the buyer assumes.

2.1 Joint Stock Company (A.Ş.)

A joint stock company is the preferred form for:

medium and large businesses,
companies that may become public in the future,
entities operating in regulated sectors, and
structures that want more flexible share transfers and potentially many shareholders.

Key features relevant to a share purchaser:

The capital is divided into shares, and these shares can be represented by share certificates.
Shares may be registered or bearer.
Shareholders’ liability is generally limited to the amount of capital they have undertaken to pay.
Shares are, as a rule, more freely transferable compared to an LLC, subject to transfer restrictions in the articles of association or shareholders’ agreements.

Because of this flexibility, many foreign investors prefer to structure acquisitions or new investments through A.Ş. companies.

2.2 Limited Liability Company (Ltd. Şti.)

A limited liability company is widely used for small and medium-sized businesses and closely held companies. In an LLC:

Capital is divided into quotas (sometimes called “shares” in everyday language, but technically different from JSC shares).
Quotas are recorded in a quota (share) ledger rather than represented by negotiable share certificates.
The transfer of quotas is more formal and more restricted than the transfer of shares in an A.Ş.
Shareholders may, in certain circumstances, have secondary liability for public debts (such as some tax and social security obligations) relating to the period during which they were shareholders.

As a result, acquiring an LLC requires more careful attention to formalities and to the company’s tax and social security history.

3. Legal Landscape for Share Acquisitions

Even before examining the target company, an investor should know the basic legal pillars that govern a share purchase in Turkey. The most important ones are:

Company law rules: These determine how shares can be issued and transferred, how general assemblies and boards operate, and what kind of approvals are legally required.
Foreign investment rules: These set the general framework for whether foreign individuals or companies can own shares and under what conditions.
Competition law: In larger transactions, merger control may require prior clearance by the competition authority.
Sector-specific rules: In regulated sectors (such as banking, insurance, energy, telecoms, aviation, media, etc.), the acquisition of a certain percentage of shares or voting rights may require approval from the relevant regulator.
Tax rules: These determine how the seller’s gain is taxed, whether stamp tax applies to the share purchase agreement, and whether any other transaction taxes arise.

In most non-regulated sectors, foreign investors enjoy national treatment, meaning they can buy company shares under substantially the same conditions as domestic investors. There is generally no pre-approval mechanism for foreign buyers; instead, certain information must be reported after the investment, especially where foreign ownership ratios change.

4. Share Deal vs Asset Deal

Before buying shares, investors often compare a share deal with an asset deal.

In a share deal, the buyer acquires the shares in the company. The legal entity remains the same. The company continues with its existing contracts, licences, employees, debts and receivables. From an operational perspective, the business continues with less disruption.
In an asset deal, the buyer acquires specific assets (for example machinery, stock, intellectual property, or a certain branch of activity). The company that sells the assets remains the same legal entity, but its business may be reduced.

Advantages of a share deal:

Simpler continuity: contracts, employees and licences usually stay with the same company.
Fewer separate transfers: you do not need to individually assign each asset or contract (subject to some exceptions and consents).
It is often more attractive to sellers, who realise gains at shareholder level rather than at company level.

Disadvantages:

By buying the shares, you take over all historical liabilities of the company, whether discovered or not. Tax debts, labour claims, environmental liabilities and administrative fines all remain with the company, and therefore affect the buyer indirectly through ownership.
Legal and financial due diligence must therefore be more intensive, and the share purchase agreement must contain adequate protections.

In practice, many foreign investors choose share deals for fully functioning businesses, especially when they want to acquire market position, licences, or a recognised brand.

5. Stages of a Typical Share Acquisition in Turkey

Although every transaction is unique, most share deals in Turkey follow a similar structure. The process can roughly be divided into the following stages:

Preliminary assessment and strategy
Confidentiality and initial information exchange
Term sheet / Letter of intent
Due diligence
Negotiation and signing of the Share Purchase Agreement (SPA)
Regulatory and third-party approvals (if needed)
Closing and transfer of shares
Post-closing notifications and integration

5.1 Preliminary Assessment

At the very beginning, the investor and their advisors:

determine whether a share deal is appropriate or whether an asset deal or joint venture would be better;
confirm the company type (LLC or A.Ş.) and any known restrictions on share transfers;
review, at high level, whether sector-specific approvals, competition clearance or foreign investment reporting obligations might apply;
outline a tentative timetable and transaction structure.

This early stage saves time later, because it avoids negotiating an SPA that may not be compatible with regulatory realities.

5.2 Confidentiality Agreement (NDA)

Before detailed information is shared, the parties usually sign a Non-Disclosure Agreement. This protects trade secrets, commercial information and personal data. For cross-border deals, the NDA may also address:

data protection aspects,
restrictions on contacting employees or customers,
exclusivity (for example, the seller agrees not to negotiate with other potential buyers for a certain period).

5.3 Term Sheet / Letter of Intent

The next step is often to sign a term sheet or letter of intent (LOI), which summarises the main commercial elements:

purchase price or price formula,
percentage of shares to be acquired,
payment terms (cash at closing, instalments, earn-out, etc.),
conditions precedent (for example, regulatory approvals, bank consents),
whether the deal is exclusive, and for how long.

Term sheets are often stated to be non-binding, except for certain clauses such as confidentiality and exclusivity.

6. Due Diligence: Looking Inside the Target

Due diligence is the foundation of a safe share purchase. When you buy shares, you acquire a company with its entire history; therefore, you need to understand what you are buying.

6.1 Legal Due Diligence

Legal due diligence in Turkey typically covers:

Corporate structure: articles of association, amendments, trade registry records, share ledger, board and general assembly minutes.
Share ownership: who is recorded as shareholder, whether there are liens, pledges or options on shares, whether there are any disputes about ownership.
Contracts: material supply contracts, client contracts, distribution and agency agreements, financing agreements, leasing, guarantees given or received.
Real estate: title documents, mortgages, rights of way, zoning status, leasing arrangements.
Licences and permits: operation licences, sector-specific approvals, compliance with conditions attached to those permits.
Employment: employment contracts, collective bargaining agreements, internal regulations, ongoing labour disputes, severance obligations and social security practices.
Intellectual property: trademarks, patents, domain names, software licences, ownership of key IP.
Disputes: court cases, enforcement proceedings, arbitration, administrative fines and investigations.
Compliance: data protection, anti-corruption policies, sanctions, export controls where relevant.

The outcome is usually summarised in a report highlighting key risks, red flags, and matters that should be addressed in the SPA through conditions, price adjustments, or indemnities.

6.2 Financial and Tax Due Diligence

Parallel to legal review, specialised teams examine:

financial statements and accounting practices,
indebtedness, guarantees and contingent liabilities,
tax filings, tax debts and payment history,
evidence of any tax audits, reconciliations or settlements,
social security declarations and payments.

For an investor, tax and social security risks are particularly important in Turkey, as they can later convert into enforcement proceedings against the company and, in some structures, secondary liability risk for shareholders and directors.

7. Special Issues in Buying Shares of a Limited Liability Company

Acquiring quotas in a Turkish LLC involves strict formalities. If they are not followed, the transfer may be invalid or may not be recognised by the company, creditors or authorities.

7.1 Formalities of Transfer

In a typical LLC share transfer:

Written share transfer agreement:
The transfer must be documented in writing. In practice, a detailed Share Transfer Agreement is drafted covering price, payment, representations and warranties and other terms.
Notarisation:
The signatures on the agreement must be executed before a Turkish notary public. This is a validity requirement, not a mere evidentiary step. Using a foreign notary without proper authentication and translation is generally not sufficient.
Approval of the General Assembly (unless waived):
In many LLCs, the Articles of Association require the general assembly of shareholders to approve the transfer. Sometimes the articles grant existing shareholders pre-emption rights or allow them to refuse transfer without providing a reason. The resolution and quorum requirements must be checked carefully.
Registration with the Trade Registry:
Once approved, the transfer is submitted to the competent Trade Registry Directorate. Relevant forms, resolutions and notarised documents are filed through the electronic system and the change is published in the Trade Registry Gazette.
Update of the quota ledger:
The company updates its internal share (quota) ledger to record the new shareholder and the number and nominal value of quotas acquired.

Only after that sequence is correctly completed can the buyer safely rely on its new status as shareholder.

7.2 Restrictions in the Articles of Association

The Articles of Association can:

restrict transfers to certain categories of persons,
require consent of other shareholders or the company,
grant right of first refusal or pre-emptive rights in favour of existing shareholders,
regulate minimum shareholding thresholds or approval quorums.

Therefore, no LLC share purchase should be agreed before the buyer’s counsel has reviewed the Articles of Association and checked whether the contemplated transfer is compatible with the existing regime.

7.3 Liability for Public Debts

One of the special features of the Turkish LLC is that shareholders may, under certain conditions, be held secondarily liable for some public debts (especially certain tax and social security debts) that arise while they are shareholders.

As a result:

A buyer must pay close attention to the timing of tax and social security liabilities.
The SPA should clearly allocate responsibility for debts attributable to periods before and after closing.
Indemnity clauses and escrow mechanisms are often used to manage this risk.

8. Buying Shares in a Joint Stock Company

For joint stock companies, the transfer regime is more flexible, but still requires careful analysis.

8.1 Registered Shares

If the company has registered shares:

Shares are either represented by registered share certificates or at least recorded in a share ledger.
The usual method of transfer is endorsement and delivery of the share certificates to the buyer, followed by entry of the buyer in the share ledger.
The Articles of Association may restrict transfer by:
- requiring board of directors’ approval,
- granting pre-emption rights to existing shareholders, or
- limiting transfer to certain categories of investors.

From the buyer’s perspective, it is essential to verify that:

the shares sold actually exist and are fully paid,
no pledge, lien or attachment is recorded on them,
there are no conflicting agreements (for example, options or rights of first refusal) affecting the same shares.

8.2 Bearer Shares

For bearer shares, the traditional rule was that transfer is achieved by delivery of the bearer share certificate. In recent years, regulations have become stricter and now require that information about bearer shareholders is maintained in a central system.

This means that, in practice:

The company must keep its bearer shares properly registered in the relevant central registry mechanism.
For a buyer to fully exercise shareholder rights, it is not enough to hold the paper certificate; the necessary notifications and registrations must also be made.

When buying bearer shares, the SPA should clearly set out:

who is responsible for completing the registry notifications,
at what point the buyer is deemed to have acquired voting and dividend rights,
what happens if the procedure is delayed or incomplete.

8.3 Public vs Private Joint Stock Companies

If the company is publicly held or listed on the stock exchange, share transfers are mainly carried out through capital markets infrastructure rather than private notarised contracts. Additional rules may apply on:

mandatory takeover bids,
disclosure of significant shareholdings,
insider trading and market abuse.

This article focuses on private joint stock companies, where share transfers are usually governed by privately negotiated SPAs.

9. Regulatory Approvals and Merger Control

Depending on the size and sector of the transaction, the acquisition may require regulatory approvals.

9.1 Competition (Merger Control)

If the transaction leads to a change of control in a company and certain turnover thresholds are exceeded, the parties may need to notify the deal to the competition authority and obtain clearance before closing.

Key points:

Thresholds are based on the turnover of the parties in Turkey and worldwide.
Control can be acquired by owning shares, voting rights, or by obtaining the power to determine strategic commercial decisions.
Closing the transaction before clearance in notifiable cases can lead to administrative fines and, in extreme cases, orders to unwind or modify the transaction.

For this reason, it is standard practice to conduct a merger control assessment early in the process, and where necessary to include competition approval as a condition precedent in the SPA.

9.2 Sector-Specific Approvals

In some sectors, changes in shareholding structure above certain thresholds require approval or notification to the relevant regulator. Examples include:

banking and other financial institutions,
insurance and private pension companies,
energy generation and distribution,
telecoms and media,
aviation and defence-related businesses.

In these cases, the SPA typically includes:

a list of required approvals,
detailed provisions on which party will apply,
long-stop dates and consequences if approvals are not obtained.

10. Special Considerations for Foreign Investors

Foreign investors are, in principle, free to acquire shares in Turkish companies under similar conditions as Turkish investors. Still, there are practical points that must be taken into account.

10.1 Foreign Direct Investment Regime

The current foreign investment framework is based on:

Freedom to invest: no general requirement for prior authorisation solely because the buyer is foreign.
Equal treatment: foreign investors should not be discriminated against compared to domestic investors, except where specific laws or international agreements provide otherwise.
Notification duties: certain information about foreign shareholders and their investments must be reported periodically to the relevant ministry through online systems.

For most ordinary commercial and industrial companies, there is no cap on foreign shareholding. Restrictions may exist in areas such as certain media activities, activities linked to national security, or where international agreements provide special rules.

10.2 Formalities Faced by Foreign Buyers

In practice, a foreign individual or company will usually need to:

obtain a Turkish tax identification number,
issue a power of attorney (if they will be represented by local counsel or another representative),
have corporate documents (for corporate buyers) such as certificate of incorporation, articles, and board resolutions notarised and apostilled or consularised in the home country,
have these documents translated into Turkish by a sworn translator and notarised in Turkey,
satisfy banks’ KYC / AML processes before opening accounts or making large transfers.

These steps should be planned early, as document legalisation and translation can take time.

10.3 Currency and Fund Transfers

The share purchase price can often be agreed in foreign currency, especially where the buyer is foreign. However:

Payments will usually be routed through Turkish banks, which may request supporting documents such as the SPA, invoices, and proof of source of funds.
Some sectors or contracts are subject to specific foreign currency restrictions; therefore, the structure should always be checked in light of current foreign exchange and contract rules.

11. The Share Purchase Agreement (SPA)

The Share Purchase Agreement is the core contract that sets out how the shares will be sold and what rights and obligations the parties have. While certain corporate law rules are mandatory (for example, form requirements for LLC share transfers), the SPA allows the parties substantial freedom to allocate risks and define mechanics.

Common clauses include:

11.1 Basic Elements

Identification of the parties.
Description of the company and the shares being sold (number, class, nominal value).
Purchase price and payment terms.
Conditions precedent (regulatory approvals, third-party consents, bank releases).
Closing mechanics (where, when, which documents, which steps).

11.2 Representations and Warranties

Sellers normally give representations and warranties about:

their authority and capacity to sell the shares,
full ownership of the shares and absence of encumbrances,
proper incorporation and good standing of the company,
accuracy of financial statements,
absence of undisclosed liabilities,
proper payment of taxes and social security contributions,
validity and continuity of licences and permits,
employment relationships and compliance with labour law,
absence of undisclosed litigation or administrative investigations,
compliance with anti-bribery, sanctions, data protection and other compliance rules.

If due diligence revealed specific issues, these may be carved out from warranties or addressed through special indemnity clauses.

11.3 Indemnities and Limitations of Liability

Indemnity clauses allow the buyer to seek compensation if certain risks materialise after closing. The SPA usually sets:

caps: maximum aggregate amount the seller may have to pay,
baskets or de minimis thresholds: small claims may be excluded to avoid disputes over trivial amounts,
time limits: for example, tax claims can be brought until expiry of statutory limitation periods, while other claims may be limited to two or three years,
procedures: how and when the buyer must notify a claim, and how the seller can participate in defending third-party claims.

11.4 Covenants

Between signing and closing, the seller often undertakes:

to conduct the business in the ordinary course,
not to dispose of important assets or undertake unusual commitments without the buyer’s consent,
to preserve key employees and relationships,
to obtain certain consents or perform specific actions as conditions precedent.

The buyer may undertake to seek regulatory approvals, to maintain confidentiality, or to provide information to authorities as needed.

11.5 Price Adjustment Mechanisms

In more sophisticated deals, the price may be adjusted after closing based on:

closing accounts: net debt and working capital at closing are measured and the price is adjusted upward or downward;
locked-box mechanisms: the price is fixed based on historical financials and the seller undertakes not to “leak value” between the locked-box date and closing;
earn-outs: part of the price is contingent on the company achieving certain financial or operational targets after closing.

The chosen mechanism should fit the size and nature of the deal and the quality of financial information available.

11.6 Governing Law and Dispute Resolution

The SPA will specify:

which law governs the contract (often Turkish law for domestic deals; international deals may choose another law for the SPA while corporate aspects remain governed by Turkish law),
whether disputes will be resolved in Turkish courts or through arbitration (for example institutional arbitration seated in Istanbul or another neutral venue).

Arbitration is frequently preferred in large cross-border deals for reasons of confidentiality and international enforceability of awards.

12. Tax and Transaction Costs

Tax analysis should accompany legal structuring from the very beginning.

12.1 Stamp Tax

Share purchase agreements are generally subject to stamp tax, calculated on the monetary value set out in the agreement, at a rate in the low single-digit range. The parties may agree how to split this cost, but in practice it reduces the net proceeds or increases the total cost of the deal.

12.2 Capital Gains Tax

The seller may be subject to capital gains tax on the profit derived from selling the shares. The applicable regime depends on:

whether the seller is an individual or a company,
the type of company (LLC or JSC),
how long the shares have been held,
whether certain exemption conditions are met.

Because tax legislation is technical and subject to change, both buyer and seller should obtain specific tax advice and reflect any tax allocation or gross-up mechanisms in the SPA.

12.3 VAT and Other Taxes

As a general rule, the transfer of shares is not subject to Value Added Tax (VAT) in Turkey. However:

other taxes may be triggered by related steps,
if the transaction is structured as an asset deal rather than a pure share deal, VAT and other transfer taxes may become relevant,
restructuring steps before or after the acquisition (for example, mergers, demergers, or transfers of business lines) must be checked for tax effects.

13. Post-Closing Steps and Corporate Housekeeping

After the closing of a share acquisition, parties should not forget the practical follow-up actions:

update the company’s share ledger and, if applicable, issue or update share certificates;
file any required Trade Registry applications relating to changes in directors, authorised signatories, or articles of association;
update signature circulars and notify banks, counterparties, and key stakeholders;
comply with foreign investment reporting obligations where foreign shareholding has changed;
implement agreed integration steps, such as reorganising group structures, replacing management, or aligning policies and compliance programs.

Neglecting post-closing housekeeping can produce practical problems later, for example when trying to open a bank account, sign a contract, or prove shareholding in a court or administrative process.

14. Common Pitfalls and Practical Tips

Investors and their advisors frequently encounter similar issues in share acquisitions in Turkey. Some practical lessons include:

Never sign an SPA before reviewing the Articles of Association
Hidden transfer restrictions, consent requirements or pre-emption rights can block or delay the transaction.
Pay close attention to LLC formalities
In LLCs, notarisation and trade registry registration are not bureaucratic details; they are essential for the validity and effectiveness of the share transfer.
Check public debts and social security history carefully
Tax and social security liabilities can affect both the value of the company and, in some structures, the risk exposure of shareholders and directors.
Do not underestimate local practice
Even where the law seems clear, local practice of trade registries and notaries may vary. A step that seems simple in theory may require several iterations in practice if documentation is not aligned with expectations.
Clarify responsibility for approvals and notifications
Competition filings, sector approvals, bank consents and foreign investment notifications should all be allocated clearly in the SPA, with realistic timelines.
Combine legal and tax structuring
For example, an acquisition that looks simple from a company law perspective may generate unnecessary tax cost if timing or documentation is not chosen carefully.
For foreign buyers: prepare documents early
Apostilles, consular certifications and translations can easily delay a closing if they are left to the last minute.

15. Conclusion

Purchasing company shares in Turkey is a powerful tool for investors who want to enter or expand in the Turkish market. It offers speed, continuity and access to existing business structures. At the same time, it requires disciplined preparation and understanding of local rules.

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