Introduction

Establishing a company in Turkey with foreign shareholders can provide international investors with direct access to one of the region’s largest consumer and industrial markets. Turkey generally follows an open foreign-investment policy based on equal treatment between domestic and international investors. Foreign individuals and foreign legal entities may generally establish and own Turkish companies under the same company-law framework applicable to Turkish investors.

Turkey’s official investment guidance confirms that international investors have the same general rights and obligations as domestic investors and may establish the company forms recognised under the Turkish Commercial Code. The two most commonly used structures are the Limited Liability Company (Limited Şirket – Ltd. Şti.) and the Joint Stock Company (Anonim Şirket – A.Ş.).

However, establishing a company with foreign shareholders requires substantially more planning than simply deciding who will own what percentage.

A successful foreign-partnered company structure should address questions such as:

• Who will control the company?
• Will the foreign investor hold a minority or majority stake?
• Who will appoint managers or directors?
• Which decisions require unanimous or qualified-majority approval?
• What happens if one shareholder refuses to provide additional financing?
• Can a shareholder sell shares to a third party?
• What happens if the Turkish and foreign shareholders disagree?
• Who owns the intellectual property?
• Can the foreign shareholder work in Turkey?
• How will dividends be distributed?
• How will the foreign investor eventually exit the company?
• What happens if one shareholder dies, becomes insolvent or breaches the agreement?

These matters are particularly important in cross-border joint ventures.

A company may be incorporated quickly at the Trade Registry, but an improperly structured shareholder relationship can create years of disputes.

For this reason, foreign investors should approach company formation not merely as an administrative registration process but as the creation of a long-term legal relationship between the investors.

This guide explains the principal issues that should be considered when establishing a foreign-partnered company in Turkey in 2026, including company type, shareholding structure, shareholders’ agreements, management and representation, minimum capital, foreign documents, work permits, tax obligations, beneficial ownership reporting, E-TUYS notifications, regulated sectors and exit mechanisms.

1. Can Foreigners Be Shareholders of Turkish Companies?

Yes.

Foreign individuals and foreign companies may generally become shareholders of Turkish companies.

Turkey’s foreign direct investment regime is based on equal treatment. International investors may establish companies and acquire shares under substantially the same company-law rules applicable to domestic investors.

In ordinary commercial sectors, there is generally no requirement to have a Turkish shareholder merely because one or more shareholders are foreign.

Accordingly, a Turkish company may potentially be:

• 100% foreign-owned;
• 90% foreign and 10% Turkish-owned;
• 50/50 foreign-Turkish owned;
• majority Turkish-owned with a foreign minority investor; or
• owned by several foreign and Turkish investors.

The appropriate percentage should be determined according to governance and investment strategy rather than nationality alone.

2. Should the Company Be an Ltd. Şti. or an A.Ş.?

This is usually the first structural decision.

As of 2026, the statutory minimum capital is:

• TRY 50,000 for an Ltd. Şti.;
• TRY 250,000 for an ordinary A.Ş.;
• TRY 500,000 starting capital for a non-public A.Ş. using the registered capital system.

A limited company may have between one and fifty shareholders and cannot offer its shares to the public.

An A.Ş. is generally more suitable where the investors expect:

• venture capital;
• private equity investment;
• multiple investment rounds;
• complex shareholder rights;
• different share groups;
• easier future share transfers;
• institutional investors;
• a strategic sale;
• or eventual capital markets activity.

An Ltd. Şti. may be sufficient for:

• small trading companies;
• consulting businesses;
• closely held family companies;
• simple service businesses;
• or companies with a small number of long-term shareholders.

Foreign investors should therefore avoid choosing an Ltd. Şti. simply because its minimum capital is lower.

The expected future ownership structure matters much more.

3. Do Not Treat the Shareholding Percentage as a Simple Mathematical Question

A foreign investor may believe:

“If I own 51%, I control the company.”

That may be true for some decisions, but it is not universally correct.

Corporate control depends on:

• company type;
• articles of association;
• statutory voting thresholds;
• board structure;
• manager appointment rights;
• veto rights;
• shareholder agreement;
• privileged shares;
• reserved matters;
• and quorum requirements.

Similarly, a 49% investor may possess substantial practical control if strategic decisions require 75% approval.

This is why the shareholding percentage should be designed together with the governance system.

4. Be Particularly Careful With 50/50 Joint Ventures

Foreign-Turkish joint ventures are frequently structured as:

50% – 50%.

The arrangement appears fair.

However, without a deadlock mechanism it can be one of the most dangerous ownership structures.

Suppose the company has two shareholders.

Each owns 50%.

They later disagree about:

• annual budget;
• additional capital;
• appointment of management;
• bank financing;
• dividend distribution;
• major investments;
• or sale of the company.

Neither shareholder can obtain the necessary majority.

The business can effectively become paralysed.

A 50/50 joint venture should therefore include a carefully designed deadlock mechanism.

Possible mechanisms include:

• escalation to senior executives;
• mediation;
• buy-sell procedures;
• Russian roulette clauses;
• Texas shoot-out mechanisms;
• put or call options;
• or eventual company sale mechanisms.

The most appropriate structure depends on the bargaining power and commercial relationship of the parties.

5. Prepare a Shareholders’ Agreement Before the Company Is Established

One of the most common mistakes in foreign-partnered companies is to postpone the shareholders’ agreement.

The parties say:

“First, let us establish the company. We will negotiate the shareholder agreement later.”

This can be risky.

Once the company has been incorporated and the capital transferred, bargaining positions may change dramatically.

The principal commercial terms should therefore ideally be negotiated before incorporation.

A detailed Shareholders’ Agreement (SHA) may regulate:

• shareholding percentages;
• capital contributions;
• future funding;
• governance;
• board appointments;
• reserved matters;
• information rights;
• dividends;
• related-party transactions;
• intellectual property;
• non-compete obligations;
• confidentiality;
• share transfer restrictions;
• pre-emption rights;
• tag-along rights;
• drag-along rights;
• deadlock;
• default;
• exit;
• governing law;
• and dispute resolution.

The shareholders’ agreement is often as important as the company’s articles of association.

6. The Shareholders’ Agreement and Articles of Association Must Be Coordinated

Foreign investors sometimes assume that every clause written in the shareholders’ agreement automatically controls the company’s internal corporate procedures.

This is not necessarily the case.

The shareholders’ agreement is primarily a contractual arrangement between its parties.

The company’s articles of association, by contrast, are the registered constitutional document of the company.

Certain corporate rights and restrictions should therefore be reflected in the articles where legally permissible if the parties want them to operate effectively at the corporate level.

For example, the parties may wish to coordinate provisions relating to:

• board nomination;
• privileged voting rights;
• share transfer restrictions;
• quorum;
• or specific shareholder privileges.

The documents should not contradict one another.

A sophisticated company formation should therefore involve preparation of both documents as part of one governance structure.

7. Clearly Define Management Rights

Ownership and management are not the same thing.

The company should clearly determine who has authority to manage its business.

In an Ltd. Şti., management is exercised by one or more managers. In an A.Ş., the board of directors is responsible for management and representation.

Foreign investors should consider:

• number of managers/directors;
• who appoints them;
• length of appointment;
• removal rights;
• chairman powers;
• voting rules;
• delegation of authority;
• signing authority;
• and reporting obligations.

A foreign investor holding 40% may negotiate the right to appoint one of three directors.

A 50/50 joint venture might give each shareholder equal board representation.

A strategic investor might require appointment rights for the CFO or another senior executive.

These rights should be negotiated before incorporation.

8. Signing Authority Can Be More Important Than Share Ownership

Investors should pay close attention to representation and signature authority.

Who can bind the company?

Can one manager sign alone?

Must two directors sign jointly?

Can the general manager borrow money from a bank without board approval?

Can the Turkish partner sign a TRY 100 million guarantee?

Can management sell company assets?

Poorly drafted representation authority can undermine carefully negotiated shareholder rights.

For example, a minority foreign investor may have veto rights over borrowing in the shareholders’ agreement, but if the Turkish manager has broad individual signature authority, the investor may still face serious practical risk.

Internal governance and external signature authority should therefore be designed together.

9. Define Reserved Matters

A shareholders’ agreement should normally identify major decisions that cannot be taken without the foreign investor’s approval.

These are often called reserved matters.

Examples include:

• capital increases;
• capital reductions;
• new share issuances;
• acquisition of another business;
• disposal of major assets;
• borrowing above a threshold;
• guarantees;
• mortgages;
• annual budget;
• business plan;
• related-party transactions;
• appointment of senior management;
• change of business activity;
• dividend distribution;
• intellectual property transfers;
• litigation settlements above a threshold;
• entry into major contracts;
• and company liquidation.

This is especially important where the foreign investor is a minority shareholder.

A 30% shareholder with carefully drafted veto rights may be better protected than a 49% shareholder with no contractual governance protection.

10. Plan Future Capital Increases From Day One

The company may need additional financing.

A foreign investor should ask:

• Who is required to provide additional capital?
• What happens if one shareholder cannot contribute?
• Will the shareholder be diluted?
• Can the company obtain external investment?
• Can shareholders provide loans instead of equity?
• Who determines valuation for new shares?

Without advance rules, a later financing requirement can trigger a serious dispute.

Example

Two shareholders each hold 50%.

The company needs an additional USD 2 million.

The foreign investor agrees to invest USD 1 million.

The Turkish partner cannot provide its share.

What happens?

Possible solutions include:

• dilution;
• shareholder loan;
• preferred financing;
• conversion rights;
• or third-party investment.

The agreement should answer this before the situation arises.

11. Understand the 2026 Minimum Capital Rules

Minimum capital should be distinguished from commercially adequate capital.

As of 2026, the statutory minimum amounts are TRY 50,000 for an Ltd. Şti. and TRY 250,000 for an ordinary A.Ş.

For an A.Ş., at least one-quarter of subscribed cash capital must generally be paid before registration, with the balance payable within 24 months.

The same 25% pre-registration requirement does not apply to an Ltd. Şti.; its subscribed cash capital may generally be paid within 24 months following registration.

However, a foreign investor should not automatically choose minimum capital.

Capital may affect:

• credibility with banks;
• work permit eligibility;
• regulatory licences;
• investment incentives;
• customer confidence;
• and future financing.

In some cases, choosing a higher paid-up capital at incorporation can be strategically important.

12. Foreign Shareholder Work Permit Rules Must Be Considered During Capital Planning

Company ownership does not automatically give a foreign shareholder the right to work in Turkey.

The Ministry of Labour confirms that foreign company partners who actively work in Turkish companies may need a work permit, while non-resident A.Ş. board members and non-managing partners of other companies may fall within work permit exemption rules.

Current work permit criteria are particularly important when designing the shareholding structure.

For a foreign company partner applying under the ordinary company-partner criteria, the current rules generally require:

• the company’s paid-up capital to be at least TRY 500,000;
• the foreign shareholder’s own capital amount to be at least TRY 500,000;
• the foreign shareholder to hold at least 20% of the company; and
• at least five Turkish citizens to be employed beginning from the seventh month of the first permit.

However, where the foreign shareholder’s capital share is USD 100,000 or more, those specific capital/shareholding and five-Turkish-employee criteria do not apply under the current Section C criteria.

Accordingly, company formation and immigration planning should be coordinated.

A shareholder structure that is perfectly valid under the Turkish Commercial Code may still create difficulty for the investor’s work permit strategy.

13. Foreign Individual Shareholders Need Proper Documentation

Where the foreign shareholder is a natural person, the Trade Registry file generally requires identity documentation.

Current official investment guidance identifies documents such as:

• notarised Turkish passport translation;
• Turkish potential tax identification number;
• and, where applicable, residence permit documentation.

The foreign investor’s name should be recorded consistently across all documents.

Differences in:

• middle names;
• surname order;
• transliteration;
• birth date;
• or passport spelling

can create avoidable registration and banking problems.

14. Foreign Corporate Shareholders Require More Extensive Documentation

When the shareholder is a foreign company, the documentation is more complex.

Official investment guidance identifies documents including:

• a certificate of activity or equivalent corporate status document;
• evidence of current authorised signatories;
• a competent corporate organ resolution approving establishment of the Turkish company;
• details of any special establishment conditions;
• board-member appointment documentation where a foreign legal entity will become an A.Ş. director;
• and a power of attorney where the process will be conducted through representatives.

The parent company’s board resolution should clearly state the intended Turkish investment.

Ambiguity may create Trade Registry delays.

15. Apostille and Turkish Translation Requirements Should Be Planned Early

Foreign documents used in Turkish company formation generally require proper authentication.

Official Turkish investment guidance states that relevant documents issued outside Turkey must generally be notarised and apostilled or, alternatively, authenticated by the competent Turkish consulate, followed by official Turkish translation and notarisation in Turkey.

International investors should therefore not wait until the intended incorporation date to obtain documents.

Depending on the jurisdiction, obtaining:

• certificate of good standing;
• apostille;
• corporate resolution;
• notarisation;
• and translation

can take significantly longer than the Turkish Trade Registry process itself.

16. Company Formation Is Conducted Through MERSIS

Company incorporation documents are prepared through MERSIS – the Central Registry Record System.

MERSIS is Turkey’s central electronic commercial registration system. The articles of association are prepared electronically and the incorporation then proceeds before the competent Trade Registry Directorate.

The company name, business purpose, capital, shareholders and governance details should therefore be carefully finalised before the MERSIS submission.

Repeated changes at the registration stage can delay closing.

17. Do Not Draft the Company’s Business Purpose Too Narrowly

The company’s articles must specify its commercial activities.

A business purpose that is drafted too narrowly may cause problems when the company later expands.

For example, a foreign-owned company may initially plan to:

• develop software.

Two years later it may also want to:

• license software;
• provide consulting;
• import hardware;
• conduct e-commerce;
• provide technical support.

The articles should provide sufficient commercial flexibility while remaining compliant with Turkish law and regulated-sector requirements.

The NACE activity classification should also reflect the company’s real principal activity.

18. Check Whether the Intended Sector Requires Prior Approval

Most ordinary companies can be established without sector-specific pre-approval.

However, certain companies require Ministry or other regulatory approval.

The Ministry of Trade’s current 2026 guidance lists categories such as:

• banks;
• financial leasing companies;
• factoring companies;
• consumer finance and card services companies;
• asset management companies;
• insurance companies;
• certain holding companies;
• foreign exchange businesses;
• licensed warehousing businesses;
• independent audit companies;
• certain capital markets companies;
• technology development zone management companies;
• and free-zone founders/operators

among structures subject to specific approval requirements.

Therefore, foreign investors should never assume that general company registration automatically authorises a regulated activity.

19. Bank Account Opening Is a Separate Compliance Process

A company can be successfully registered but still experience difficulties opening or operating a bank account.

Banks conduct their own:

• KYC;
• anti-money laundering;
• sanctions;
• beneficial ownership;
• source-of-funds;
• and business-model reviews.

Foreign corporate shareholders may be required to provide:

• group structure;
• ultimate beneficial owners;
• parent-company documents;
• source of investment funds;
• expected countries of payment;
• expected transaction volumes;
• contracts;
• and business explanations.

Investors should therefore avoid promising commercial partners that the company will have fully operational banking immediately after incorporation.

Bank onboarding should be treated as a separate project.

20. Determine the Ultimate Beneficial Owners

Foreign-partnered companies must also consider Turkey’s beneficial ownership reporting regime.

The Revenue Administration explains that corporate taxpayers must identify and report the natural person or persons who ultimately control or exercise ultimate influence over the legal entity.

Where a new tax registration is established or beneficial ownership information changes, the relevant change generally must be reported within one month, subject to the applicable filing mechanism.

For complex international holding structures, determining the ultimate beneficial owner may require looking through several corporate layers.

For example:

Turkish Company → Dutch Holding → Luxembourg Company → Family Trust / Individual Owners

The Turkish compliance analysis cannot necessarily stop at the Dutch company.

21. Foreign Investment Reporting Through E-TUYS Must Not Be Forgotten

A foreign-owned Turkish company has foreign investment reporting obligations beyond Trade Registry registration.

The Ministry of Industry and Technology confirms that foreign-invested companies and branches make relevant foreign-capital notifications through E-TUYS – the Electronic Incentive Implementation and Foreign Capital Information System.

The system is used for information concerning foreign-invested companies and relevant foreign capital transactions.

Foreign shareholders should therefore ensure that someone within the company or its professional advisers is specifically responsible for:

• E-TUYS authorisation;
• required information submissions;
• capital-related reporting;
• and later share transfer reporting.

Company incorporation should not be viewed as the end of foreign investment compliance.

22. Newly Established Companies in 2026 Must Consider ETDS

A new compliance issue has become particularly relevant in 2026.

The Ministry of Trade announced that companies registered from 1 January 2026 onward fall within the mandatory Electronic Commercial Book System framework for the relevant non-accounting corporate books.

The system covers corporate books such as the share ledger and general assembly meeting and negotiation book within the applicable scope.

For foreign shareholders, this makes proper corporate administration even more important.

Share ownership, corporate decisions and general assembly records should be maintained consistently from the date of incorporation.

23. Agree in Advance on Dividend Policy

A recurring dispute in foreign-partnered companies concerns profits.

The foreign investor may expect annual dividend distributions.

The local operating partner may want all profits reinvested.

Unless the issue is addressed contractually, the disagreement can become significant.

The shareholders’ agreement may define principles such as:

• minimum dividend policy;
• permitted reserves;
• investment requirements;
• debt limitations;
• and conditions for distribution.

Dividend policy should always remain subject to Turkish law, distributable profit and mandatory reserves.

But shareholders can still agree on the commercial principles they intend to follow.

24. Understand the Turkish Corporate Tax Environment

For 2026, the general corporate income tax rate for ordinary Turkish corporate taxpayers is currently 25%.

Special rates apply to certain financial institutions and regulated businesses, while qualifying exporters, manufacturers and newly listed companies may benefit from reduced rates on qualifying income under the applicable rules.

Foreign investors should not analyse corporate tax in isolation.

They should also review:

• VAT;
• dividend withholding;
• transfer pricing;
• shareholder loans;
• thin capitalisation;
• withholding taxes;
• royalties;
• management fees;
• and the applicable double taxation treaty.

The ownership jurisdiction of the foreign shareholder can materially affect the total tax outcome.

25. Related-Party Transactions Must Be Structured Properly

Foreign-partnered companies often transact with their overseas shareholders.

Examples include:

• management services;
• software licences;
• trademark royalties;
• shareholder loans;
• procurement;
• technical support;
• group services;
• and intercompany sales.

These transactions should not be treated casually merely because the parties belong to the same corporate group.

Turkish transfer pricing and tax rules may require transactions to reflect arm’s-length principles.

Written intercompany agreements and commercially defensible pricing are therefore important.

26. Decide Who Owns the Intellectual Property

For startups and technology joint ventures, IP ownership may be the most valuable issue in the entire transaction.

Before incorporation, the parties should decide who owns:

• software;
• trademarks;
• patents;
• designs;
• domain names;
• databases;
• algorithms;
• trade secrets;
• and know-how.

Suppose a Turkish founder develops the software personally while the foreign investor provides capital.

Does the software belong to:

• the founder;
• the Turkish company;
• or a foreign parent company?

This should be resolved in written agreements.

A company with USD 10 million valuation but no legal ownership of its core software can create enormous due diligence problems during a future investment round.

27. Use Non-Compete and Confidentiality Clauses Carefully

In joint ventures, shareholders often have access to:

• customers;
• pricing;
• suppliers;
• source code;
• strategic plans;
• and confidential commercial information.

The shareholders’ agreement should therefore address:

• confidentiality;
• non-solicitation;
• intellectual property;
• and legally enforceable non-compete restrictions where appropriate.

The scope, duration and geography should be proportionate and drafted with Turkish competition and contract-law principles in mind.

An unlimited global non-compete may not necessarily provide the strongest enforceable protection.

28. Plan Share Transfer Restrictions Before a Dispute Occurs

Shareholders should decide when shares may be sold.

Important mechanisms include:

Pre-emption Right

Existing shareholders receive the opportunity to purchase shares before they are transferred to a third party.

Right of First Refusal

A shareholder obtains the right to match a third-party offer.

Lock-Up

Shareholders agree not to sell during an initial period.

Permitted Transfers

Transfers to affiliates or group companies may be allowed under defined conditions.

Consent Rights

Certain transfers may require approval.

These mechanisms prevent an investor from unexpectedly finding itself in business with an unknown third party.

29. Use Tag-Along Rights to Protect Minority Investors

A tag-along clause is particularly important for foreign minority investors.

Suppose a Turkish founder owns 70% and the foreign investor owns 30%.

A third-party buyer offers to purchase the founder’s 70%.

Without a tag-along right, the foreign investor may remain trapped in the company with a new controlling shareholder.

A tag-along right can allow the minority investor to participate in the sale on the same or comparable terms.

For cross-border investment, this can be one of the most valuable minority protections.

30. Use Drag-Along Rights to Facilitate a Future Company Sale

A drag-along right addresses the opposite problem.

Suppose an international buyer wants to acquire 100% of the company.

The investors holding 90% agree.

A 10% shareholder refuses.

Without an appropriate mechanism, the minority shareholder may obstruct the transaction.

A carefully structured drag-along provision can allow the qualifying majority to require minority shareholders to participate in the sale under the agreed conditions.

This is particularly important for:

• venture capital;
• private equity;
• and startup exits.

31. Consider What Happens if a Shareholder Dies or Becomes Insolvent

Shareholder agreements frequently focus only on successful scenarios.

They should also regulate adverse events.

For example:

• death;
• incapacity;
• bankruptcy;
• sanctions;
• criminal proceedings;
• material contractual breach;
• or loss of a required licence.

The agreement may include:

• call options;
• mandatory transfer provisions;
• valuation mechanisms;
• or succession rules.

These issues are especially important where an individual founder is critical to the business.

32. Agree on a Valuation Mechanism

Many shareholder disputes ultimately become valuation disputes.

If one shareholder has the right or obligation to sell shares, how will the price be calculated?

Possible approaches include:

• independent valuation;
• EBITDA multiple;
• revenue multiple;
• fair market value;
• formula valuation;
• or predetermined price mechanisms.

The method should be appropriate to the company’s sector.

A technology startup and a manufacturing company should not necessarily use the same formula.

33. Decide the Dispute Resolution Mechanism

A foreign shareholder should not wait until a dispute arises to decide where the dispute will be resolved.

The shareholders’ agreement should address:

• governing law;
• jurisdiction;
• arbitration;
• language;
• seat of arbitration;
• number of arbitrators;
• and interim relief.

International shareholders frequently prefer arbitration for major cross-border joint ventures because of:

• confidentiality;
• neutrality;
• procedural flexibility;
• and international enforceability.

However, not every company dispute is arbitrable, and certain corporate matters may remain subject to mandatory Turkish law or Turkish courts.

The dispute resolution clause should therefore be drafted together with the corporate governance structure.

34. Consider Competition Law for Large Joint Ventures

Most newly established small companies will not require merger-control clearance simply because they have foreign shareholders.

However, the creation of certain full-function joint ventures or transactions producing a lasting change of control may fall within Turkish merger-control rules if the applicable turnover thresholds are satisfied.

Turkey substantially increased its merger-control thresholds in February 2026, including increases to TRY 1 billion, TRY 3 billion and TRY 9 billion in the relevant turnover tests.

Large multinational joint ventures should therefore conduct competition-law analysis before closing the investment.

35. Practical Example: Turkish Founder and Foreign Investor Establishing an A.Ş.

Assume a Turkish founder and a UK technology investor intend to establish a Turkish software company.

The proposed ownership is:

Turkish Founder: 60%
UK Investor: 40%

A properly structured formation process could include the following.

Stage 1 – Company Type

The parties choose an A.Ş. because institutional investment is expected later.

Stage 2 – Foreign Investor Documentation

The UK investor provides the required corporate status documents, board resolution and authority documents.

The foreign documents are properly authenticated and translated for Turkish use.

Stage 3 – Articles of Association

The MERSIS articles specify:

• capital;
• shareholding;
• board structure;
• and permitted corporate privileges.

Stage 4 – Shareholders’ Agreement

A detailed SHA regulates:

• board appointment;
• reserved matters;
• future investment;
• intellectual property;
• confidentiality;
• non-compete;
• dividends;
• tag-along;
• drag-along;
• deadlock;
• and exit.

Stage 5 – Board

The company has three directors:

• two appointed by the founder;
• one appointed by the foreign investor.

However, defined strategic matters require the foreign investor’s approval.

Stage 6 – Capital

The company is established with commercially adequate capital rather than merely the statutory minimum.

Stage 7 – IP Transfer

The founder formally assigns the existing software and related IP to the Turkish company.

Stage 8 – Banking and KYC

The company completes bank beneficial ownership and source-of-funds review.

Stage 9 – E-TUYS and Beneficial Ownership

Foreign investment and beneficial ownership reporting processes are organised.

Stage 10 – Work Permit

If a foreign executive will actively work in Turkey, the company reviews the work permit criteria before the executive begins employment.

This structure is far stronger than simply registering “60% / 40%” at the Trade Registry.

Frequently Asked Questions About Foreign-Partnered Companies in Turkey

Can a foreigner establish a company with a Turkish partner?

Yes. Foreign and Turkish shareholders may jointly establish an Ltd. Şti. or A.Ş.

Can the foreigner own the majority?

Generally yes, unless special sectoral restrictions apply.

Can the foreigner own 100%?

Generally yes. A Turkish shareholder is not ordinarily mandatory.

What is the minimum capital for an Ltd. Şti.?

TRY 50,000.

What is the minimum capital for an A.Ş.?

TRY 250,000 for an ordinary A.Ş.

Does an Ltd. Şti. have to pay 25% of its capital before registration?

No. The 25% pre-registration rule applicable to ordinary A.Ş. cash capital does not apply in the same way to an Ltd. Şti.; limited-company cash capital may generally be paid within 24 months following registration.

Is a shareholders’ agreement mandatory?

No, but it is strongly advisable in foreign-partnered and joint-venture structures.

Is the articles of association enough?

For a simple company, it may cover basic corporate matters. For a sophisticated joint venture, a separate shareholders’ agreement is usually advisable.

Can a foreign shareholder be a manager or director?

Yes, subject to company law and applicable immigration/work permit requirements.

Does being a shareholder automatically give a work permit?

No. Shareholding and the right to work are separate legal issues.

What are the work permit criteria for a foreign company partner?

Under the ordinary current criteria, the company generally needs TRY 500,000 paid-up capital, the foreigner’s capital share must generally be at least TRY 500,000 and 20%, and the five-Turkish-employee requirement begins from the seventh month. Foreign partners with a capital share of USD 100,000 or more are exempt from those specific Section C criteria.

Does a foreign corporate shareholder need an apostille?

Foreign corporate documents generally require proper apostille or Turkish consular authentication, together with Turkish translation and notarisation as applicable.

What is MERSIS?

MERSIS is Turkey’s central electronic commercial registry system used for company formation and corporate registry procedures.

What is E-TUYS?

E-TUYS is the Ministry of Industry and Technology’s electronic system used for foreign investment and incentive-related reporting.

Must the beneficial owner be reported?

Corporate taxpayers must identify and report the natural persons who ultimately control or exercise ultimate influence over the entity under Turkey’s beneficial ownership reporting framework.

What is Turkey’s corporate income tax rate in 2026?

The general rate for ordinary corporate taxpayers is currently 25%, subject to different rates and reductions for specified sectors and qualifying activities.

Are some sectors subject to special company formation permission?

Yes. Banking, insurance, capital markets and various other regulated industries may require Ministry or sector regulator approval.

Conclusion: How Should a Foreign-Partnered Company in Turkey Be Structured?

Establishing a foreign-partnered company in Turkey is relatively accessible from a registration perspective.

The more difficult task is building a legal structure that remains workable when the shareholders eventually disagree.

Foreign investors should therefore think beyond the Trade Registry.

The key issues are not simply:

company name + capital + address + shareholders.

A properly structured foreign-invested company should address:

company type → ownership percentages → capital contributions → management rights → signing authority → reserved matters → shareholders’ agreement → intellectual property → future financing → dividends → work permits → tax → beneficial ownership → E-TUYS → transfer restrictions → deadlock → exit.

The choice between an Ltd. Şti. and an A.Ş. should be made according to the future of the business.

An Ltd. Şti. may be appropriate for a small and closely held commercial operation.

An A.Ş. will often be preferable where the company expects:

• international investment;
• venture capital;
• institutional shareholders;
• repeated investment rounds;
• sophisticated corporate governance;
• or a future share sale.

Foreign shareholders should also coordinate corporate and immigration planning.

A company can be perfectly validly incorporated with a foreign shareholder while the shareholder still lacks the legal right to work in Turkey.

Current company-partner work permit criteria may require substantially higher paid-up capital than the minimum capital required merely to establish the company.

Similarly, the company formation process does not end when the Trade Registry issues the registration.

The investors must still consider:

• banking KYC;
• beneficial ownership reporting;
• foreign investment reporting through E-TUYS;
• tax registration;
• accounting;
• employment;
• licences;
• intellectual property;
• and ongoing corporate governance.

For companies incorporated in 2026, the new Electronic Commercial Book System requirements should also be integrated into corporate administration from the beginning.

The shareholders’ agreement is particularly important.

A foreign investor should never assume that owning 49%, 50% or even 51% automatically provides the intended level of protection.

The practical strength of the investment depends on:

• voting rights;
• board representation;
• veto rights;
• signature authority;
• capital increase provisions;
• transfer rights;
• information rights;
• and exit mechanisms.

A well-structured investment agreement can prevent disputes before they occur.

A poorly structured company, by contrast, may become commercially paralysed even though its registration documents are technically perfect.

For international investors considering establishing a company in Turkey with Turkish or other foreign partners, the safest approach is therefore to negotiate the shareholder relationship first and complete the formal company registration second.

The fundamental objective should not be merely to incorporate a company.

It should be to create a company whose legal architecture continues to work when:

• more money is required;
• a new investor enters;
• a founder wants to leave;
• shareholders disagree;
• the company becomes profitable;
• or a third party offers to buy the business.

If those scenarios are addressed at the incorporation stage, a foreign-partnered Turkish company can provide a robust platform for long-term investment and business growth.

If they are ignored, the company may eventually become the subject of a shareholder dispute that could have been prevented through careful legal planning.

This article reflects Turkish legislation and official administrative guidance available as of August 2026. It is provided for general informational purposes only and does not constitute transaction-specific legal, tax, corporate, immigration or investment advice. The appropriate corporate structure should be determined according to the investors, sector, ownership model, financing plan and long-term exit strategy applicable to the particular project.