Foreign direct investment remains a major part of the Turkish transaction market, and that makes the legal framework for cross-border acquisitions especially important. Türkiye’s official investment materials state that the number of companies with international capital reached 86,926 as of mid-2025. In parallel, the Turkish Competition Authority reported that in 2025 foreign investors planned to invest in Türkiye-based companies in 55 merger and acquisition transactions, with a notified investment value of about TRY 277.5 billion (USD 7.03 billion), and Germany ranked first by number of such transactions. These figures show that foreign capital is not peripheral to Turkish M&A practice; it is one of its main drivers.
From a legal standpoint, the starting point is reassuring. Türkiye’s official investment guidance states that the Foreign Direct Investment Law No. 4875 is based on the principle of equal treatment, allowing international investors to have the same rights and liabilities as local investors. The same official source explains that the FDI Law was designed to encourage foreign direct investment, protect investor rights, align investment definitions with international standards, and create a notification-based rather than approval-based system. The Investment Office also states that Türkiye has 86 bilateral investment treaties in force, and that the FDI framework recognizes key principles such as freedom to invest, national treatment, expropriation protection, freedom of transfer, and access to national or international arbitration and alternative dispute resolution.
That said, the phrase “notification-based” should not be misunderstood as meaning “unregulated.” In Turkish M&A, foreign investors usually do not face a single universal pre-approval gate merely because they are foreign. Instead, the legal analysis is layered. A foreign investor acquiring a Turkish company must check at least five levels of regulation: company-law transfer mechanics, FDI reporting obligations, sector-specific licensing or approval rules, merger-control requirements, and asset-specific issues such as real estate or regulated employees. In practice, this means that a foreign buyer may be free to invest in principle, but still unable to close unless the target’s particular legal environment is mapped correctly.
The baseline rule: foreign investors are generally treated like domestic investors
Türkiye’s official guidance is unusually explicit on this point. The Investment Office states that the conditions for setting up a business and for transferring shares are the same as those applied to local investors. It also notes that international investors may establish any company form set out in the Turkish Commercial Code, with joint stock companies and limited liability companies being the most common forms in practice. For foreign investors looking at Turkish M&A, this means the law does not begin from the assumption that foreign ownership is exceptional. The normal assumption is that foreign capital is permitted unless a specific rule says otherwise.
This equal-treatment principle matters directly in acquisitions. A foreign buyer can acquire shares in a Turkish company under the same core corporate framework that applies to a domestic buyer. A foreign private equity fund, an industrial group, a family office, or an international strategic investor is therefore not forced into a special foreign-ownership company form merely because of its nationality. As a matter of structure, the buyer may acquire an existing Turkish company, establish a new subsidiary, form a joint venture, or open a branch, depending on the commercial objective and the target sector.
How foreign investors usually enter Turkish M&A transactions
In real transactions, foreign investment in Turkish M&A usually takes one of three forms. The first is a direct share acquisition of a Turkish target. The second is the creation of a joint venture with a Turkish or foreign partner. The third is a broader group reorganization in which a foreign-controlled chain acquires or consolidates Turkish assets. Official Turkish guidance notes that joint ventures are commonly organized through a commercial company and that the preferred vehicle is often a joint stock company, partly because of share-structuring flexibility and limited liability. It also states that shareholders’ agreements are commonly used to govern the relationship between joint venture parties.
This same official guidance also says that, as a general matter, there are no restrictions on the nationality of shareholders or persons holding management rights, except in certain specific sectors such as TV broadcasting, maritime, and civil aviation. That sentence captures the core logic of Turkish FDI law in M&A transactions: openness is the rule, but regulated sectors remain the exception. For deal counsel, that means the right question is not “Can foreigners invest in Türkiye?” but rather “Does this target operate in a sector where foreign investment, control, licensing, or governance is specially regulated?”
E-TUYS reporting is one of the most important post-closing obligations
One of the most practical FDI issues in Turkish M&A is not approval but reporting. Official Investment Office guidance states that the Activity Information Form for FDI, the FDI Capital Data Form, and the FDI Share Transfer Data Form are now received electronically through the E-TUYS system, which is managed by the General Directorate of Incentive Implementation and Foreign Investment. The same source also makes clear that these forms are no longer received in printed form. In other words, once a foreign investor acquires shares in a Turkish company, the transaction may trigger an electronic FDI reporting workflow even if no separate foreign-investment approval was required beforehand.
This is why a Turkish M&A closing checklist for a foreign investor should never stop at the share transfer instrument itself. Counsel should confirm who will make the relevant E-TUYS submissions, what internal documents will be needed, and whether the target has already been maintaining its FDI records correctly. In practice, an investor that focuses only on the SPA or share certificates may close the deal yet still remain exposed to avoidable compliance problems if the post-closing reporting layer is neglected.
Cross-border closing documents must be execution-ready in Türkiye
A frequent source of delay in foreign-led Turkish M&A deals is not the transaction concept, but the usability of foreign corporate documents in Türkiye. Official Turkish investment guidance states that documents issued and executed outside Türkiye must generally be notarized and apostilled, or alternatively ratified by the Turkish consulate, and then officially translated and notarized by a Turkish notary. This rule matters for board resolutions, powers of attorney, certificates of incumbency, signature authorities, and parent-company approvals.
In practical terms, this means foreign investors should prepare execution mechanics early. If the deal requires a foreign parent resolution, a notarized power of attorney for Turkish counsel, or registry-ready evidence of authority, those documents should be designed for Turkish use from the start rather than retrofitted later. In transactions with tight regulatory or financing timetables, poor document planning is often just as disruptive as a legal defect in the deal structure.
Merger control is not an FDI rule, but it is one of the main closing rules for foreign buyers
Although Turkish merger control is formally part of competition law rather than foreign-investment law, it is often the single most important approval issue in foreign-led acquisitions. The Competition Authority’s official 2025 overview report states that, for a merger or acquisition transaction to be subject to authorization, it must first lead to a permanent change in control. The same report explains that a merger or acquisition can occur through shares, assets, or other means, and that even the establishment of a full-function joint venture can qualify.
The same official report states that Competition Board authorization is required where the total Turkish turnovers of the transaction parties exceed TRY 750 million and the Turkish turnovers of at least two parties each exceed TRY 250 million, or where the target company, asset, or business has Turkish turnover exceeding TRY 250 million and another transaction party has global turnover exceeding TRY 3 billion. It also states that transactions implemented abroad must still be notified in Türkiye if the thresholds are exceeded. For foreign investors, that point is critical: an offshore acquisition can still require Turkish clearance if the Turkish nexus is large enough.
Technology transactions deserve even more caution. The Competition Authority’s 2025 overview report states that the usual TRY 250 million local threshold is disregarded in certain transactions involving technology companies operating or conducting R&D in the Turkish geographic market, or providing services to users in Türkiye. This means foreign investors acquiring software, platform, gaming, fintech, biotech, or similar businesses with a Turkish nexus should check Turkish merger-control exposure very early, even where current Turkish turnover looks modest.
The practical upside is that the Turkish merger process can move relatively quickly when filings are complete. The Competition Authority reported that in 2025 notified merger and acquisition transactions received final decisions after an average of 10 days following the final date of notification. That is not a substitute for analysis, but it does mean that well-planned foreign acquisitions can often incorporate Turkish competition clearance without destroying deal timing.
Sector-specific approvals can override the general openness of the FDI regime
The most important qualification to Türkiye’s equal-treatment principle is the existence of regulated sectors. Official investment guidance expressly says that there are no restrictions on shareholder nationality or management nationality except for specific sectors such as TV broadcasting, maritime and civil aviation. Other official sector sources confirm that in fields such as banking and insurance, share transfers and corporate reorganizations are handled within a regulator-driven licensing framework. That means a foreign investor may be free to acquire a Turkish business in general, yet still need sector-specific approval because of what that business actually does.
The lesson for Turkish M&A is straightforward. Foreign investment analysis should never be done in the abstract. It must be matched to the target’s regulatory perimeter. A manufacturing company, a software company, a broadcaster, an insurer, and a bank do not present the same foreign-investment workflow even if they are all Turkish joint stock companies on paper. The more regulated the sector, the less useful it is to rely only on the general FDI Law.
A concrete example: broadcasting is subject to foreign-shareholding limits
Official RTÜK materials make the broadcasting example especially clear. Türkiye’s Audio-visual Media Law states that the total direct foreign capital share in a media service provider may not exceed 50% of paid-in capital. It also states that a foreign natural or legal person may directly become a partner of a maximum of two media service providers. Where foreign persons become indirect partners through holding structures, the law requires that the chair, deputy chair, board majority, and general manager of the broadcaster be Turkish citizens, and that the majority of votes at the general assembly belong to Turkish real or legal persons.
For foreign investors, this is a classic example of why FDI due diligence in Turkish M&A must go beyond the headline principle of equal treatment. If the target holds broadcasting licenses or sits inside a media group, the investor must test not only whether the share purchase is valid under company law, but also whether the post-closing ownership and governance structure will remain compliant with sector rules. Otherwise, the buyer may acquire a corporate shell but inherit a regulatory problem.
Banking and insurance are approval-intensive sectors
The banking sector provides another clear illustration. The official English text of the Banking Law No. 5411 states that any acquisition of shares that results in one person directly or indirectly holding 10%, 20%, 33%, or 50% of a bank’s capital, or falling below those levels, requires the permission of the Board. Official BRSA regulations further state that applications must be made for share acquisitions subject to the law and that share transfers recorded in the share ledger must be notified to the Agency within one month even if they are not subject to permission.
Insurance is similar in principle. The official annual report of the Insurance and Private Pension Regulation and Supervision Authority states that operations concerning licensing, merger, share transfer, portfolio transfer, and title change of insurance, reinsurance, and pension companies are evaluated under the Insurance Law and related legislation. The same report records that share transfer requests were in fact approved by the Authority in practice. For a foreign investor, that means acquiring an insurer in Türkiye is not just an FDI and company-law matter; it is also a regulatory approval project.
Real estate can become an FDI issue after a control change
Foreign-led M&A in Türkiye often involves real estate indirectly because the target company owns factories, offices, land, logistics sites, hotels, retail outlets, or development property. Official Investment Office guidance explains that a company established in Türkiye is treated as a foreign-owned company for real-estate purposes if foreign investors hold 50% or more of the shares or have the right to appoint and dismiss the majority of the board. Such companies may acquire property and limited rights in rem in order to conduct the activities set out in their articles of association.
That same official guidance states that these companies generally must apply first to the governor’s office where the property is located, although certain transactions do not require such permission, including the creation of a mortgage, acquisitions in organized industrial zones and certain other zones, and transfers arising out of company mergers and demergers. It also notes that if the property is in prohibited military or military security zones, additional permission rules apply. This is a major practical point in Turkish M&A: after a foreign investor acquires control of a Turkish company, the target’s real-estate position may require a fresh compliance analysis.
Foreign personnel and key personnel rules can matter after acquisition
Foreign buyers do not acquire only assets and contracts; they also acquire management needs. Türkiye’s Ministry of Labour states that, under the Regulation on Employment of Foreign Nationals in Foreign Direct Investments, work permits for qualifying foreign direct investments are subject to special provisions intended to facilitate issuance. The Ministry’s official guidance also defines “specific foreign direct investment” by reference to 2026 thresholds such as foreign capital contribution, turnover, export volume, employment, planned fixed investment, or the parent group’s international investment profile.
The same official source recognizes the concept of key personnel, including top managers, board-level executives, and persons with knowledge essential to the company’s services, research equipment, techniques, or management. In practical M&A terms, this means a foreign acquirer that wants to install expatriate management or transfer specialized personnel into the Turkish target should examine post-closing work-permit strategy as part of the acquisition plan rather than as a separate HR issue after completion.
Liaison offices are useful for market entry, but not for running an acquired business
Some foreign groups explore a liaison office before making an acquisition. Official Turkish guidance states that a company incorporated under foreign law may establish a liaison office in Türkiye with a license from the Ministry of Industry and Technology, but only on the condition that it does not engage in commercial activities in Türkiye. The same guidance adds that liaison-office applications in financial activities subject to special legislation, such as money and capital markets or insurance, are evaluated with the involvement of the relevant competent authorities.
This matters because a liaison office is not a substitute for acquiring or operating a Turkish business. It can be useful for market research, presence, and preparatory work, but once the foreign investor wants to run commercial operations in Türkiye, acquire shares in an operating company, or hold licensed assets, the analysis moves back into ordinary company law, sector law, FDI reporting, and merger-control territory.
What foreign buyers should verify before signing
In Turkish M&A practice, the most effective FDI due diligence asks a series of practical questions. Will the transaction require an E-TUYS share transfer filing? Does the target operate in a sector that requires prior regulatory approval? Will the buyer obtain control over a company that owns real estate and therefore enters the foreign-capital company regime for land purposes? Does the target need Competition Board authorization because of turnover thresholds or technology-transaction rules? Will the post-closing management model require work permits for key personnel? And are all foreign execution documents ready for Turkish apostille, consular, and notarial use? These questions are what convert the general openness of the Turkish FDI regime into a deal that can actually close cleanly.
Conclusion
The core rule of Turkish foreign direct investment law is investor-friendly: foreign investors are generally treated the same as local investors, and the regime is based on notification rather than a blanket approval system. But in Turkish M&A transactions, that principle is only the beginning. A foreign buyer must still consider FDI reporting through E-TUYS, competition clearance, sector-specific approvals, real-estate implications of foreign control, foreign personnel planning, and Turkish execution formalities for overseas documents.
That is why the right way to understand foreign direct investment rules in Turkish M&A transactions is not as a single statute, but as an integrated compliance map. The FDI Law opens the door. Company law determines how the shares move. Sector regulators may control whether they can move at all. Competition law may determine whether the closing must wait. And asset-specific rules, especially around real estate and key personnel, can reshape the buyer’s post-closing obligations. In short, foreign investment in Turkish M&A is broadly permitted, but successful execution depends on identifying the legal overlays early and building them into the deal from the start.
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