Introduction: What Should Foreign Investors Check Before Investing in Turkey?

Turkey offers foreign investors access to a large domestic market, a developed corporate and banking system, manufacturing infrastructure, technology companies, real estate opportunities and a strategic location connecting Europe, the Middle East, Central Asia and surrounding markets.

From a legal perspective, Turkey generally welcomes foreign direct investment.

Law No. 4875 on Foreign Direct Investment is based on two important principles: freedom to invest and national treatment. Unless international agreements or special legislation provide otherwise, foreign investors may make direct investments in Turkey and are generally subject to equal treatment with domestic investors. The same legislation also provides a framework for transferring abroad items such as net profits, dividends and proceeds from the sale or liquidation of investments through banks or financial institutions.

However, “foreign investors are allowed to invest” does not mean that every investment structure is legally equivalent.

A foreign investor may enter Turkey by:

• establishing a new company;
• purchasing shares in an existing Turkish business;
• creating a joint venture with a Turkish partner;
• acquiring real estate;
• opening a branch;
• making a strategic industrial investment;
• financing a Turkish subsidiary;
• establishing a technology startup;
• or purchasing a regulated business.

Each route creates different legal risks.

For example, purchasing shares in an existing company may expose the investor economically to historical tax, employment, contract and regulatory liabilities of the target.

Buying land may involve zoning, title and foreign-ownership restrictions.

Establishing a technology business may require intellectual property and data protection analysis.

Acquiring a fintech business may require regulatory approval.

Hiring foreign executives may require work permits.

Transferring customer data to the investor’s foreign headquarters may create KVKK international data transfer obligations.

A large acquisition may require approval from the Turkish Competition Authority before closing.

Therefore, foreign investment should begin with legal due diligence before money is committed, not after the investment agreement has already been signed.

The following are the 10 most important legal issues foreign investors should check before investing in Turkey in 2026.

1. Check Whether Foreign Investment Is Permitted in the Sector and Whether Regulatory Approval Is Required

The first question should not be:

“How quickly can we establish the company?”

It should be:

“Are we legally permitted to conduct this particular activity, and do we need a licence, regulatory approval or sector-specific authorisation?”

Turkey’s Foreign Direct Investment Law generally provides equal treatment for foreign and domestic investors. However, that principle operates subject to special laws and sector-specific regulation.

An ordinary foreign-owned business involved in:

• software;
• consulting;
• manufacturing;
• import-export;
• e-commerce;
• ordinary wholesale;
• or general commercial services

may usually be structured without a Turkish shareholder merely because the owners are foreign.

But regulated sectors require a different analysis.

These can include areas such as:

• banking;
• payment services;
• electronic money;
• insurance;
• capital markets;
• crypto assets;
• telecommunications;
• energy;
• healthcare;
• pharmaceuticals;
• private education;
• aviation;
• media;
• defence-related industries;
• and certain licensed professional activities.

The investor should determine before incorporation or acquisition whether the planned activity requires:

1. a licence;
2. prior consent;
3. minimum capital;
4. fit-and-proper management requirements;
5. local infrastructure;
6. sector-specific foreign ownership restrictions;
7. regulatory notification;
8. or ongoing reporting.

Example

A foreign technology group intends to establish a Turkish company providing an online payment application.

The founders describe the business as:

“a software startup.”

However, if the company actually provides payment services falling within regulated payment legislation, merely incorporating a software company is not enough.

The product’s economic function determines the regulatory risk—not the words used in the company’s articles of association.

Practical Rule

Before committing capital, prepare a short regulatory classification memorandum answering:

• What exactly will the company do?
• Which Turkish authority regulates that activity?
• Is prior permission required?
• Is there minimum capital?
• Are foreign shareholders permitted?
• Are there restrictions on directors or managers?
• Can the business legally begin operations immediately after incorporation?

This check can prevent an investor from establishing a company that legally exists but cannot lawfully operate its intended business.

2. Choose the Correct Investment Vehicle and Shareholder Structure

The second issue is deciding how the investment should enter Turkey.

The most common Turkish corporate vehicles for foreign investors are:

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

Turkey’s official investment guidance confirms that international investors may establish company forms available under the Turkish Commercial Code and that the A.Ş. and Ltd. Şti. are the most commonly used capital companies.

As of 2026, the statutory minimum capital levels are:

Existing companies that remain below the applicable new statutory minimum must bring their capital up to the required level by 31 December 2026, otherwise the consequences under the Turkish Commercial Code’s transitional provision may arise.

But minimum capital should never be the only factor.

An investor should also ask:

• Will additional investors enter later?
• Will there be multiple financing rounds?
• Do investors need different share classes?
• Will the company issue employee equity?
• Will shares need to be transferred easily?
• Is an IPO or strategic exit possible?
• What management rights are required?
• Will a Turkish partner hold minority or majority ownership?

For venture capital, private equity and sophisticated joint ventures, an A.Ş. may frequently offer a more flexible structure.

For a relatively simple, closely held operating business, an Ltd. Şti. may be adequate.

Do Not Ignore Governance

Foreign investors should also design:

• board composition;
• manager appointment;
• signature authority;
• reserved matters;
• voting thresholds;
• capital increase rules;
• related-party approvals;
• and minority protections.

A company owned:

50% foreign investor / 50% Turkish partner

without a deadlock mechanism may become incapable of making important decisions.

Shareholders’ Agreement

A properly drafted shareholders’ agreement can regulate:

• board representation;
• veto rights;
• financing;
• pre-emption;
• transfer restrictions;
• tag-along;
• drag-along;
• deadlock;
• confidentiality;
• non-compete obligations;
• exit;
• and dispute resolution.

The articles of association and shareholders’ agreement should be designed together because not every purely contractual provision has identical corporate effect under Turkish law.

3. Conduct Legal, Tax and Financial Due Diligence Before Acquiring an Existing Turkish Company

If the investment involves purchasing shares in an existing Turkish company, due diligence is essential.

A share purchase does not create a new company.

The target continues as the same legal entity.

Therefore, liabilities existing before the acquisition may remain liabilities of the target after the foreign investor becomes its shareholder.

Potential issues include:

• unpaid tax;
• SGK liabilities;
• employee claims;
• severance exposure;
• pending litigation;
• enforcement proceedings;
• bank guarantees;
• customer disputes;
• supplier claims;
• product liability;
• environmental liabilities;
• regulatory investigations;
• unpaid licences;
• data protection violations;
• and intellectual property ownership problems.

The foreign investor should therefore conduct a structured investigation covering at least:

Corporate

• Trade Registry records;
• articles of association;
• share ownership;
• shareholder rights;
• capital;
• board/manager appointments;
• signature authority;
• corporate books;
• historic capital increases.

Tax

• corporate tax;
• VAT;
• withholding;
• payroll;
• tax audits;
• penalties;
• transfer pricing;
• incentives;
• related-party transactions.

Employment

• number of employees;
• salaries;
• overtime;
• severance;
• annual leave;
• foreign employees;
• collective arrangements;
• disputes.

Contracts

• customers;
• suppliers;
• distributors;
• leases;
• financing;
• change-of-control clauses;
• termination rights;
• guarantees.

Intellectual Property

• trademarks;
• patents;
• software;
• domain names;
• licences;
• employee-created IP;
• contractor assignments.

Litigation and Enforcement

• court proceedings;
• arbitration;
• enforcement files;
• administrative sanctions.

Regulatory

• licences;
• permits;
• sector approvals;
• environmental permissions.

Data Protection

• KVKK compliance;
• VERBİS analysis;
• international transfers;
• security incidents.

The investor should then use the due diligence findings to negotiate the transaction documents.

These findings may justify:

• price reduction;
• escrow;
• holdback;
• specific indemnity;
• seller warranty;
• condition precedent;
• debt repayment before closing;
• regulatory approval;
• or abandonment of the transaction.

A USD 10 million company should not be purchased merely on the basis of management presentations and financial statements supplied by the seller.

4. Analyse Turkish Tax Before Fixing the Investment Structure

Tax planning should happen before incorporation or acquisition.

For most ordinary Turkish corporate taxpayers, the corporate income tax rate applicable to the 2026 fiscal period is 25%. Certain financial, insurance and specified regulated entities are subject to a 30% rate. Turkey also applies reduced rates to qualifying categories such as certain export income.

But corporate income tax is only one component of the investment’s tax cost.

Foreign investors should analyse:

• corporate income tax;
• VAT;
• withholding tax;
• dividend taxation;
• payroll taxes;
• transfer pricing;
• shareholder loans;
• interest;
• royalties;
• management fees;
• stamp tax;
• customs;
• incentives;
• and double taxation treaties.

Turkey also operates a domestic minimum corporate tax mechanism under which calculated corporate tax can generally not fall below 10% of the specially calculated pre-exemption/pre-deduction base, subject to statutory exclusions. Importantly, genuinely newly established corporations are generally outside this minimum tax mechanism for their first three fiscal periods.

Example: Foreign Parent and Turkish Subsidiary

Assume a French group establishes a Turkish subsidiary.

The group plans to charge the Turkish company annually for:

• management;
• trademarks;
• IT;
• financing;
• and procurement.

Before signing these contracts, the investor should determine:

1. whether Turkish withholding applies;
2. whether the France-Turkey tax treaty affects the rate;
3. whether the expense is deductible;
4. whether the price is arm’s length;
5. whether the Turkish company receives a genuine commercial benefit;
6. whether VAT or reverse-charge VAT applies.

A foreign parent cannot simply remove Turkish profit through an arbitrary “management fee.”

Profit Repatriation

Turkey’s Foreign Direct Investment Law expressly recognises that foreign investors can transfer items such as net profits, dividends and sale/liquidation proceeds abroad through banks or financial institutions, subject of course to the applicable tax and financial rules.

Therefore, tax planning should examine both:

how profit is earned in Turkey

and

how profit will eventually be repatriated.

5. Review Investment Incentives Before Spending the Money

A major mistake is applying for incentives after machinery has been purchased, employees hired or the project location selected.

Turkey currently maintains a broad investment incentive system designed to reduce upfront investment costs and support investments in priority areas, manufacturing, services and R&D. The official Investment Office emphasises equal access for international investors and identifies tax relief and project-specific support within the current system.

Depending on the project, potential support can include mechanisms such as:

• VAT exemption;
• customs duty exemption;
• reduced corporate taxation;
• social security contribution support;
• interest or profit-share support;
• investment location support;
• and project-specific incentives.

Eligibility depends on factors such as:

• sector;
• region;
• investment amount;
• technology level;
• strategic importance;
• employment;
• and project characteristics.

Example

A foreign manufacturer plans to invest EUR 20 million in Turkey.

It has not yet decided between three locations.

Legal and incentive analysis should be completed before:

• buying the land;
• importing production lines;
• placing machinery orders;
• or finalising the employment plan.

Regional or sector-specific incentives may materially affect the economics of the project.

The correct sequence is:

investment model → incentive analysis → certificate/approval where needed → expenditure.

Not:

expenditure → ask whether an incentive was available.

6. Determine Whether Foreign Executives and Shareholders Need Work Permits

Foreign investors often assume:

“I own the Turkish company, so I can automatically work for it.”

That is incorrect.

Company ownership and work authorisation are separate legal concepts.

As of August 2026, the Ministry of Labour applies specific criteria to foreign company shareholders.

For businesses operating under the balance-sheet method, the ordinary criteria generally require:

• at least TRY 500,000 paid-up company capital;
• at least TRY 500,000 capital participation by the foreign partner;
• at least 20% ownership;
• and employment of at least five Turkish citizens, with the five-employee requirement generally applying from the seventh month of the first permit.

Where the foreign partner’s capital participation reaches at least USD 100,000, the Ministry states that these specific company-partner financial, shareholding and employment criteria do not apply.

The 2026 rules also contain various general and sector-specific exemptions, including updated criteria effective from August 3, 2026 for certain foreigners with prior lawful residence history.

Why This Matters Before Company Formation

Consider a foreign entrepreneur who plans to establish an Ltd. Şti. with:

TRY 50,000 capital

because that is the corporate-law minimum.

The founder also intends to work in Istanbul as the company’s managing director.

The company may be perfectly valid under corporate law.

But the work permit strategy may require a significantly different capital structure.

The investor should therefore determine before incorporation:

• who will work in Turkey;
• who is only a passive shareholder;
• which foreign directors need work permits;
• what salary requirements apply;
• and whether sector-specific exemptions are available.

7. Check Real Estate, Zoning and Foreign Ownership Restrictions Before Buying Land or Buildings

Real estate often forms a substantial part of a foreign investment.

A factory project may require industrial land.

A hotel investment may involve a tourism property.

A retail investment may include commercial premises.

A citizenship investor may purchase residential property.

Foreign investors should conduct title and planning due diligence before acquisition.

For foreign natural persons, current official guidance includes restrictions such as a general nationwide acquisition limit of 30 hectares, limits connected with foreign ownership within the relevant district, and restrictions concerning military and security areas. Foreign owners acquiring undeveloped property may also have project-development obligations under the applicable framework.

Real estate due diligence should examine:

• registered owner;
• mortgages;
• attachments;
• court injunctions;
• usufruct rights;
• easements;
• zoning;
• construction permit;
• occupancy permit;
• environmental restrictions;
• land use;
• expropriation plans;
• infrastructure;
• and development rights.

Foreign Company vs Turkish Subsidiary

Another distinction is important.

A foreign legal entity established abroad and a Turkish company owned by foreigners are not necessarily treated identically for real estate acquisition.

The ownership vehicle should therefore be determined before the property acquisition structure is finalised.

Red Flag

A seller says:

“Do not worry about zoning; the municipality will change it next year.”

That is not legal due diligence.

If the investment value depends on future zoning, the investor is assuming regulatory risk that should be clearly identified and priced.

8. Map Personal Data and Cross-Border Transfers Before Integrating Global IT Systems

Data protection has become one of the most important investment issues for international groups.

A foreign investor may acquire a Turkish company and immediately plan to integrate it into the group’s:

• global HR platform;
• CRM;
• cloud environment;
• cybersecurity system;
• ERP;
• AI systems;
• analytics;
• customer-support software;
• and international reporting infrastructure.

That integration may cause Turkish employee or customer personal data to be transferred abroad.

Turkey’s Personal Data Protection Law No. 6698 – KVKK – contains specific rules governing international personal data transfers.

Article 9 was substantially amended in 2024. The current system recognises mechanisms including standard contracts and binding corporate rules as appropriate safeguards in qualifying circumstances.

The Personal Data Protection Authority provides four types of standard contracts for different controller/processor relationships.

A particularly important procedural rule is that standard contracts used under the relevant mechanism must be notified to the Authority within five business days after signatures are completed. In its July 27, 2026 announcement, the Authority again emphasised this deadline as well as signature authority, Turkish-language documentation and formal compliance requirements.

Due Diligence Questions

Foreign investors should determine:

• What personal data does the Turkish company process?
• Is special-category data involved?
• Is the company a controller or processor?
• Where are servers located?
• Which foreign vendors receive data?
• Is employee data transferred to the parent?
• Are cloud backups abroad?
• Are AI APIs receiving personal data?
• Is an appropriate Article 9 transfer mechanism in place?
• Has the company experienced breaches?

A significant KVKK deficiency can become both:

regulatory risk

and

transaction risk.

For acquisitions, privacy and cybersecurity should therefore form part of the legal due diligence scope.

9. Determine Whether Competition Authority Approval Is Required Before Closing

A merger, acquisition or joint venture may require Turkish merger-control approval.

This should be examined before signing an unconditional closing structure.

In February 2026, the Turkish Competition Authority updated the merger-control regime and increased the relevant turnover thresholds. The update increased important figures within the notification tests, including the former TRY 250 million threshold to TRY 1 billion, the former TRY 750 million Turkish turnover threshold to TRY 3 billion, and the former TRY 3 billion worldwide turnover threshold to TRY 9 billion.

The actual notification analysis depends on:

• transaction structure;
• control;
• parties;
• target business;
• Turkish turnover;
• worldwide turnover;
• and the specific tests under the merger communiqué.

Therefore, the numbers should not be applied mechanically without analysing the transaction.

Why Merger Control Must Be Checked Early

Suppose a foreign corporation agrees to acquire 100% of a Turkish business.

The share purchase agreement states:

Signing Monday → Closing Friday.

Only after signing does the investor discover that Competition Authority approval is required.

The parties may then face:

• delayed closing;
• regulatory risk;
• contractual breach;
• financing complications;
• and potential sanctions if closing occurs without required approval.

A better agreement should contain regulatory approval as a condition precedent where necessary.

Joint Ventures

Foreign investors should also remember that certain joint ventures can fall within merger-control rules if the relevant legal conditions are satisfied.

The fact that no company is being “purchased” does not automatically mean competition analysis is unnecessary.

10. Plan the Exit, Dispute Resolution and Enforcement Before Investing

The final major issue is often neglected because everyone expects the investment to succeed.

Before entering Turkey, the investor should ask:

“What happens if the partnership fails?”

A foreign investment agreement should address issues such as:

• governing law;
• jurisdiction;
• arbitration;
• language;
• service;
• interim relief;
• deadlock;
• shareholder default;
• valuation;
• call/put options;
• tag-along;
• drag-along;
• guarantees;
• indemnities;
• and exit.

Turkey’s Foreign Direct Investment Law recognises, subject to the relevant conditions and agreements, the use of Turkish courts as well as national or international arbitration or other dispute-resolution mechanisms for specified investment disputes.

But arbitration should not simply be inserted into every contract automatically.

The investor should examine:

• Who are the parties?
• Where are their assets?
• What type of dispute is likely?
• Does mandatory Turkish law apply?
• Would a Turkish court order be needed quickly?
• Will the award need enforcement abroad?
• What language should proceedings use?
• What arbitration institution and seat are appropriate?

Joint Venture Example

A foreign investor and Turkish founder own:

Foreign Investor – 60%
Turkish Founder – 40%

The investor contributes EUR 15 million.

The Turkish founder contributes the operating business and local management.

The agreement should address what happens if:

• the founder leaves;
• financial statements are manipulated;
• the parties disagree on future investment;
• the founder competes against the company;
• a buyer offers EUR 100 million for 100% of the shares;
• or one party refuses to cooperate with the sale.

An exit mechanism created before the relationship breaks down is far more effective than negotiating one after litigation begins.

Additional Compliance Issue: E-TUYS and Corporate Records

Although the ten issues above represent the main pre-investment categories, foreign investors should also ensure that post-investment compliance is allocated clearly.

Companies and branches established in Turkey with foreign investment are subject to electronic foreign-investment reporting through E-TUYS, including activity, capital and share-transfer information. Turkey’s official company-establishment guidance confirms that these forms are received electronically through E-TUYS rather than on paper.

Another important 2026 development concerns corporate books.

Companies registered from January 1, 2026 must keep their share ledger and general assembly meeting and negotiation book electronically through the Electronic Commercial Book System – ETDS. Keeping the board of directors’ resolution book electronically remains optional under the current system.

This matters especially to foreign owners because the corporate records must accurately reflect:

• share ownership;
• transfers;
• general assembly decisions;
• and governance.

A foreign investor should therefore appoint responsibility for corporate compliance immediately after closing.

Greenfield Investment vs Buying an Existing Company: Which Is Legally Safer?

There is no universal answer.

A greenfield investment gives the investor greater control over:

• corporate structure;
• contracts;
• employees;
• tax systems;
• data compliance;
• and governance.

It has little or no historical corporate liability because the company is new.

However, it requires the investor to build:

• customers;
• suppliers;
• permits;
• employees;
• infrastructure;
• and operations.

An acquisition provides an existing business.

But it also comes with history.

A useful summary is:

The investor should therefore choose based on commercial objectives rather than assuming that acquiring an existing company is automatically faster or cheaper.

Foreign Investor Pre-Investment Legal Checklist

Before transferring substantial capital into Turkey, a foreign investor should ideally be able to answer all of the following:

1. Is foreign ownership permitted in the relevant sector?
2. Does the activity require a licence?
3. Should the investment be made through an A.Ş., Ltd. Şti., branch or another vehicle?
4. What capital level is commercially and legally appropriate?
5. Who controls the board or managers?
6. Which decisions require investor consent?
7. Is a shareholders’ agreement required?
8. Has the target company been legally and tax due-diligenced?
9. Are there tax or SGK liabilities?
10. Are there pending lawsuits or enforcement proceedings?
11. Does the target own its intellectual property?
12. Are key customer contracts transferable after change of control?
13. Does the acquisition require Competition Authority approval?
14. Are sector regulator approvals required?
15. How will the investor finance the Turkish operation?
16. Are shareholder loans tax-efficient and legally appropriate?
17. How will dividends be repatriated?
18. What Turkish corporate tax and withholding rules apply?
19. Does a tax treaty apply?
20. Are investment incentives available?
21. Should an incentive certificate be obtained before expenditure?
22. Do foreign managers need work permits?
23. Does the capital structure support those work permits?
24. Will the company acquire real estate?
25. Is the title and zoning clean?
26. Are foreign ownership restrictions relevant?
27. Will Turkish personal data be transferred abroad?
28. Is KVKK compliance adequate?
29. What E-TUYS reporting will be required?
30. How will corporate records be maintained under ETDS?
31. What happens if the investment fails?
32. How can the investor exit?
33. What court or arbitration forum will resolve disputes?
34. Where are the counterparty’s assets located?
35. Can a judgment or award realistically be enforced?

If several of these questions remain unanswered, the transaction may not yet be ready for closing.

Frequently Asked Questions About Investing in Turkey

Can foreigners invest freely in Turkey?

Generally yes. Turkey’s Foreign Direct Investment Law provides freedom to invest and equal treatment for foreign investors, subject to international agreements and special legislation.

Does a foreign investor need a Turkish shareholder?

Generally no for ordinary commercial activities. Special sectors may impose additional requirements.

Can a Turkish company be 100% foreign-owned?

Yes, in general. International investors can establish Turkish companies under the company forms available to domestic investors.

What is the minimum capital for an Ltd. Şti. in 2026?

The current minimum is TRY 50,000.

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

The ordinary minimum is TRY 250,000. A non-public company using the registered capital system has a TRY 500,000 minimum starting capital.

What is the corporate tax rate in Turkey in 2026?

The general rate for ordinary corporate taxpayers is 25%. Certain financial and specified regulated businesses are subject to 30%.

Does Turkey have a minimum corporate tax?

Yes. The domestic minimum corporate tax mechanism generally operates at 10% of the specially calculated base, subject to statutory adjustments and exceptions. Newly established companies are generally outside the regime for their first three fiscal periods.

Can foreign investors transfer dividends abroad?

The Foreign Direct Investment Law provides for transfer abroad of items including net profits, dividends and proceeds from sale or liquidation through banks or financial institutions, subject to applicable legal and tax rules.

Does a foreign shareholder automatically have the right to work in Turkey?

No.

What are the current foreign shareholder work permit criteria?

Under the ordinary company-partner framework, relevant criteria include TRY 500,000 company paid-up capital, TRY 500,000 capital participation by the foreigner, at least 20% ownership and employment of five Turkish citizens beginning from the seventh month. The specific criteria are not applied where the foreign shareholder’s capital share is at least USD 100,000.

Can foreigners buy real estate in Turkey?

Yes, subject to nationality, area, military/security zone and other statutory restrictions.

Does a company acquisition need Competition Authority approval?

Some acquisitions do. In 2026, the Turkish Competition Authority materially increased the turnover thresholds used in merger-control analysis. A transaction-specific turnover and control assessment should therefore be completed before closing.

Does KVKK apply to foreign investors?

Yes where their Turkish operation processes personal data falling within the scope of Turkish data protection law.

Can a Turkish company send personal data to its foreign parent?

Potentially, but the transfer must comply with KVKK Article 9. Standard contracts, binding corporate rules and other statutory mechanisms may be relevant.

How quickly must a KVKK standard contract be notified?

Where the standard contract mechanism is used, notification to the Authority is required within five business days after completion of signatures.

Are investment incentives available to foreign investors?

Yes. Turkey’s current incentive framework applies on an equal-treatment basis and includes various tax and investment support instruments depending on the project.

Conclusion: What Should a Foreign Investor Do Before Investing in Turkey?

Turkey can provide significant opportunities for international investors.

The country’s Foreign Direct Investment Law generally protects freedom to invest and equal treatment between domestic and foreign investors. It also recognises the ability of foreign investors to transfer profits, dividends and investment-sale proceeds abroad through the financial system, subject to applicable law.

But those protections do not eliminate the need for careful legal structuring.

The safest investment process begins before the investor signs a share purchase agreement, transfers capital or buys property.

The first legal check should be regulatory.

The investor should determine whether the activity is open to foreign investment and whether sector-specific licences or regulatory approvals apply.

The second check should be the corporate structure.

The investor should decide whether an A.Ş., Ltd. Şti., branch, joint venture or another structure best supports governance, financing and exit.

The third check should be due diligence.

When acquiring an existing company, the investor should investigate the target’s historical tax, employment, regulatory, litigation, contractual and intellectual property liabilities before becoming its owner.

The fourth check should be tax.

Turkey’s ordinary corporate tax rate is currently 25%, but the effective tax burden depends on the entire investment structure, including VAT, withholding, dividends, financing and transfer pricing.

The fifth check should be incentives.

Major manufacturing, technology, R&D and strategic projects should be screened for incentive eligibility before capital expenditure is committed. Turkey’s current investment programme contains multiple forms of support designed to reduce investment costs.

The sixth check should be immigration and employment.

A foreign shareholder does not automatically have the right to work in Turkey. Current company-partner work permit rules can materially influence the most appropriate company capital and shareholder structure.

The seventh check should be property.

Title, mortgages, zoning, planning, permits and foreign-ownership restrictions should be investigated before the investor purchases real estate for a factory, hotel, headquarters or investment project.

The eighth check should be data protection.

International groups should understand whether integration with their foreign IT systems will cause Turkish personal data to leave the country. Under the revised KVKK Article 9 framework, cross-border transfers require an appropriate legal mechanism, and standard-contract notifications involve a strict five-business-day deadline.

The ninth check should be competition law.

Significant acquisitions and joint ventures may require Turkish Competition Authority approval before implementation. The 2026 turnover thresholds have changed materially, making current transaction-specific analysis essential.

Finally, the tenth check should be the investor’s exit.

Every foreign investor should ask before investing:

How do we leave if the investment does not develop as expected?

The answer should be reflected in:

• shareholder agreements;
• share transfer rights;
• deadlock provisions;
• guarantees;
• indemnities;
• governing law;
• jurisdiction;
• arbitration;
• and enforcement strategy.

The most effective foreign investment roadmap can therefore be summarised as:

investment thesis → sector/regulatory analysis → corporate structure → legal and tax due diligence → shareholder governance → tax and incentive planning → work permit strategy → property review → KVKK and cybersecurity → merger-control approval → definitive agreements → closing → E-TUYS/ETDS compliance → ongoing monitoring → exit.

Foreign investors should avoid treating legal review as something that occurs only after a problem arises.

At the investment stage, legal advice has a different function.

It is not simply intended to resolve disputes.

It is intended to identify which risks can be:

eliminated, transferred to the seller, insured, reflected in the price, protected through escrow, made a closing condition or avoided altogether.

The most important question before investing in Turkey is therefore not simply:

“Is this a profitable opportunity?”

It is:

“Do we understand exactly which Turkish company, assets, licences, liabilities, tax exposures, employee obligations, data risks and exit rights we will own once the transaction closes?”

A foreign investor who can answer that question before transferring the purchase price is in a substantially stronger position than an investor who begins legal due diligence only after becoming the owner.

This article reflects Turkish foreign investment, corporate, tax, employment, competition, real estate and data protection legislation 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, accounting, regulatory or investment advice. Each foreign investment should be reviewed according to the investor’s nationality, sector, transaction structure, target company, financing method and long-term commercial objectives.