A Practical Legal Guide to Acquiring a Startup or Existing Company in Türkiye

For foreign investors entering the Turkish market, establishing a new company is not the only option. A foreign individual, foreign corporation, investment fund or other eligible foreign investor may generally acquire shares in an existing Turkish startup and become a shareholder without first incorporating a separate company in Türkiye.

In fact, the Turkish foreign investment regime expressly recognizes the acquisition of shares in a Turkish company as a form of foreign direct investment. Under Article 2 of the Foreign Direct Investment Law No. 4875, the acquisition by a foreign investor of any percentage of shares outside the stock exchange may qualify as foreign direct investment. For stock-exchange acquisitions, the Law refers to acquisitions of at least 10% of the shares or voting rights.

Therefore, a foreign investor considering the Turkish startup ecosystem may choose between establishing a new Turkish company, subscribing to newly issued shares of an existing startup, acquiring shares from the founders or existing investors, or acquiring the startup entirely.

The most important question is usually not whether the acquisition is legally possible. It is how the transaction should be structured so that the investor does not unknowingly acquire hidden liabilities together with the company.

1. Can a Foreign Investor Legally Buy a Turkish Startup?

Yes.

Türkiye generally follows a liberal foreign investment regime based on the principles of freedom of investment and national treatment.

Article 3 of the Foreign Direct Investment Law No. 4875 provides that, unless otherwise stipulated by international agreements or special laws, foreign investors are free to make foreign direct investments in Türkiye and are subject to equal treatment with domestic investors.

Official investment guidance similarly confirms that the rules concerning company establishment and share transfers generally apply to international investors in the same manner as they apply to domestic investors.

Consequently, a German technology company, a UK investment fund, a UAE family office, a US corporation or a foreign individual may generally purchase shares in an existing Turkish startup.

There is no general requirement to create a Turkish holding company first.

The foreign investor itself may become the direct shareholder of the Turkish startup.

2. Does the Foreign Investor Have to Establish a New Turkish Company?

Generally, no.

Suppose a Turkish software startup is incorporated as:

ABC Teknoloji Anonim Şirketi

and currently has three Turkish founders.

A foreign investor wishing to acquire 60% of the company does not ordinarily need to establish another Turkish company and make the acquisition through that company.

The foreign investor may acquire the shares directly.

After completion:

Foreign Investor → 60%

Existing Founders → 40%

The Turkish startup continues to exist as the same legal entity.

Its tax number, contracts, employees, permits, bank accounts, intellectual property rights and commercial relationships generally remain with the same company.

This continuity can be one of the principal advantages of buying an existing startup rather than establishing a completely new business.

3. There Are Three Main Ways to Invest in an Existing Turkish Startup

An investor should first determine exactly what type of investment is intended.

Acquisition of Existing Shares

The investor purchases shares directly from one or more existing shareholders.

For example, a founder owns 60% of the startup and sells 30% to a foreign investor.

The purchase price is normally paid to the selling founder.

The company itself does not necessarily receive new capital.

This is usually described as a secondary share sale.

Capital Increase and Subscription for New Shares

Instead of purchasing the founders’ existing shares, the investor may provide new money directly to the startup through a capital increase.

For example:

The founders initially own 100%.

The company increases its capital.

The foreign investor contributes EUR 2 million and receives newly issued shares representing 30% of the company.

In such a transaction, the investment proceeds generally go to the company rather than to the founders.

This structure is frequently used in venture capital investments.

Combination of Primary and Secondary Investment

Many startup transactions combine the two.

The investor may invest EUR 3 million into the company through a capital increase while simultaneously paying EUR 1 million to an existing founder for part of that founder’s shares.

The legal documents should clearly distinguish these two components.

4. What Happens to the Company’s Existing Liabilities?

This is one of the most important differences between buying an existing startup and establishing a new company.

In a share acquisition, the investor acquires shares in the existing legal entity.

The company itself continues to exist.

Therefore, its previous liabilities normally remain with it.

For example, the startup may already have:

unpaid tax liabilities, employee claims, unpaid social security premiums, pending litigation, intellectual property disputes, contractual penalties, data protection violations, shareholder disputes, regulatory investigations or outstanding debts.

The fact that the company obtains a new foreign shareholder does not normally eliminate these liabilities.

This is why purchasing an existing startup without conducting legal due diligence can expose the investor to substantial economic risk.

The investor may technically acquire the shares for EUR 2 million only to discover afterwards that the company has EUR 1 million in hidden liabilities.

For this reason, legal due diligence should ordinarily be completed before signing or closing the acquisition.

5. Legal Due Diligence Is Particularly Important in Startup Acquisitions

Startup acquisitions require a somewhat different due diligence approach from conventional company acquisitions.

An investor should examine at least the following areas:

• corporate records, shareholding structure, share ledger, articles of association and previous capital increases;
• founder rights, option rights, convertible instruments, SAFE-like arrangements and previous investment agreements;
• tax and social security liabilities;
• material customer and supplier agreements;
• employment and founder agreements;
• intellectual property ownership;
• software source code and third-party software licences;
• personal data and KVKK compliance;
• pending and threatened litigation;
• regulatory licences;
• bank financing, shareholder loans and security interests;
• public incentives, grants and Technology Development Zone arrangements;
• change-of-control clauses;
• non-compete, exclusivity and most-favoured-customer provisions;
• outstanding warrants, options or rights capable of diluting the investor.

For technology startups, intellectual property ownership is often more important than the registered capital of the company.

A startup may have an impressive product while legally owning very little of its underlying technology.

For example, software may have been created by a freelance developer without a properly drafted IP assignment agreement.

From an investor’s perspective, this is a significant acquisition risk.

6. Buying Shares in a Turkish Joint Stock Company

Many Turkish startups expecting institutional or venture capital investment prefer the joint stock company — anonim şirket (A.Ş.) structure.

This structure generally provides greater flexibility for investment rounds, different share groups, corporate governance rights and eventual exits.

The share-transfer procedure depends on matters including whether the shares are registered or bearer shares, whether share certificates have been issued, the articles of association and any contractual restrictions.

Registered shares are generally transferable subject to the Turkish Commercial Code and any legally permissible restrictions contained in the articles of association.

Bearer share transfers are subject to additional rules. Following amendments to Article 489 of the Turkish Commercial Code, transfer of bearer share certificates becomes effective against the company and third parties through transfer of possession together with notification by the acquirer to the Central Securities Depository — Merkezi Kayıt Kuruluşu (MKK). Until the necessary notification is made, rights attached to the bearer shares cannot be exercised as provided by law.

Accordingly, an investor should never assume that signing a Share Purchase Agreement alone completes the corporate transfer.

The legal status of the actual shares must also be verified.

7. Buying Shares in a Turkish Limited Liability Company

The procedure for acquiring a limited liability company — limited şirket (Ltd. Şti.) is more formal.

According to the Turkish Ministry of Trade’s guidance, a limited company share transfer involves execution of a written share transfer agreement with notarized signatures and, unless otherwise permitted under the company’s articles, approval by the general assembly. Registration and announcement procedures must also be completed.

Consequently, the investor should review the target company’s articles of association before signing the transaction.

The articles may contain restrictions concerning transfers or approval mechanisms.

For this reason, buying 100% of an A.Ş. and buying 100% of a Ltd. Şti. may involve different closing formalities even if the economic transaction is identical.

8. Can a Foreign Investor Buy 100% of the Startup?

As a general rule, yes.

There is ordinarily no requirement to retain a Turkish shareholder merely because the new shareholder is foreign.

Official investment guidance states that there are generally no nationality restrictions on shareholders or persons holding management rights, subject to specific sectoral exceptions such as television broadcasting, maritime activities and civil aviation.

Accordingly, a Turkish startup may normally become:

100% foreign-owned

after completion of the acquisition.

However, regulated sectors should always be reviewed separately.

9. Minority Investment Is Also Possible

A foreign investor does not have to acquire control.

It may acquire:

10%, 20%, 25%, 40% or another agreed percentage.

A minority investor should nevertheless pay particular attention to the Shareholders’ Agreement.

A 20% shareholder may have limited practical influence if its rights are not contractually protected.

The Shareholders’ Agreement may therefore regulate matters such as board representation, information rights, reserved matters, veto rights, future financing rounds, pre-emption rights, anti-dilution mechanisms, founder lock-up provisions, transfer restrictions, drag-along rights, tag-along rights, put and call options and exit mechanisms.

Official Turkish investment guidance also recognizes shareholders’ agreements as a common mechanism for governing relationships among investment partners.

For venture capital investments, the Shareholders’ Agreement is often nearly as important as the share acquisition itself.

10. Share Purchase Agreement: The Core Acquisition Document

A startup should not ordinarily be acquired merely by signing a simple share transfer form.

A properly structured acquisition normally involves a detailed Share Purchase Agreement (SPA).

The SPA determines exactly what the seller promises concerning the company.

Important provisions typically include the purchase price, payment mechanism, closing conditions, representations and warranties, indemnification, limitation of liability, tax liabilities, intellectual property warranties, employee matters, litigation, regulatory compliance, data protection, disclosure schedules and post-closing obligations.

A well-drafted warranty package is particularly important because the investor generally acquires the company together with its corporate history.

If the founders have represented that no tax investigation exists and an undisclosed tax liability later appears, the SPA may allow the investor to claim compensation against the seller.

Without contractual protection, recovering such losses may be considerably more difficult.

11. Should the Investor Use an Escrow or Holdback?

For significant acquisitions, part of the purchase price can sometimes be retained temporarily.

For example:

Purchase price: EUR 5 million.

EUR 4 million paid at closing.

EUR 1 million retained for 12–24 months to secure potential warranty or indemnity claims.

Depending on transaction structure, this can be implemented through escrow, deferred consideration or contractual holdback arrangements.

The appropriate structure will depend on banking, tax, foreign exchange and contractual considerations.

This can be particularly useful where due diligence identifies risks that cannot be fully resolved before closing.

12. Competition Authority Approval May Be Required

Not every startup acquisition can be closed immediately after the parties sign their contracts.

Some transactions constitute a change of control requiring notification to the Turkish Competition Authority.

This is particularly relevant where a major international company, private equity fund or corporate group acquires a Turkish startup.

Türkiye updated its merger-control thresholds in February 2026. The Competition Authority announced that the individual Turkish turnover threshold was increased from TRY 250 million to TRY 1 billion, the aggregate Turkish turnover threshold from TRY 750 million to TRY 3 billion, and the worldwide turnover threshold from TRY 3 billion to TRY 9 billion.

Broadly, the general thresholds now capture transactions where either the parties’ aggregate Turkish turnover exceeds TRY 3 billion and at least two parties separately exceed TRY 1 billion in Türkiye, or the relevant Turkish turnover threshold is exceeded by one side while another transaction party exceeds the TRY 9 billion worldwide turnover threshold. The precise turnover calculation and parties whose turnover must be included must be analyzed under Communiqué No. 2010/4.

Importantly for startup acquisitions, Türkiye maintains a special regime for technology undertakings.

Under the 2026 amendments, the special technology undertaking regime was narrowed to Türkiye-based technology undertakings, and for qualifying transactions the relevant TRY 1 billion individual threshold is applied as TRY 250 million for the relevant target/transaction party.

This means that an acquisition involving a Turkish fintech, software company, digital platform, biotechnology company or another business potentially falling within the technology undertaking definition requires competition-law analysis even where the startup itself appears relatively small.

Merger clearance should therefore be investigated before closing, not after ownership has already been transferred.

13. Sector-Specific Approval May Also Be Necessary

Foreign investment legislation should not be confused with sector regulation.

While Türkiye generally permits foreign ownership, some businesses operate under licences or regulatory regimes where a share transfer or change of control requires notification or approval.

Potentially regulated areas include banking, insurance, payment services, electronic money, capital markets, broadcasting, civil aviation, maritime activities, energy and certain other licensed industries.

Official Turkish investment guidance specifically confirms that nationality restrictions may continue to apply in certain sectors such as television broadcasting, maritime activities and civil aviation.

Fintech transactions deserve particular attention.

For example, the Central Bank of the Republic of Türkiye’s 2025 activity report records regulatory approvals for share transfers involving payment and electronic money institutions, illustrating that ownership changes in these regulated entities may require regulatory review.

Therefore, acquiring a normal SaaS startup and acquiring a licensed payment institution should not be approached as identical transactions.

14. What Happens to Employees After a Share Acquisition?

In a pure share acquisition, the employer company usually remains unchanged.

Only its shareholders change.

For example:

Before acquisition:

Employee → ABC Teknoloji A.Ş.

After acquisition:

Employee → ABC Teknoloji A.Ş.

The legal employer is still the same company.

Therefore, existing employment contracts generally remain in force.

However, the investor should examine employment-related liabilities during due diligence, particularly unpaid overtime, unused annual leave, severance exposure, social security liabilities and key employee arrangements.

In technology transactions, founder employment and retention arrangements can be particularly important.

An investor may acquire a startup primarily because of its founding team.

If the founders can leave immediately after closing, much of the commercial value of the acquisition may disappear.

Transactions therefore frequently include founder retention, vesting or carefully drafted non-compete and confidentiality arrangements, subject to the limitations of Turkish law.

15. Intellectual Property Can Be the Biggest Hidden Risk

For many startups, the most valuable assets are not machinery or real estate.

They are:

software, trademarks, algorithms, databases, source code, patents, domain names, product designs and know-how.

The investor should verify whether these assets actually belong to the startup.

A frequent practical problem occurs where a founder registered a trademark personally and never transferred it to the company.

Another example is source code developed before incorporation and never legally assigned to the startup.

A third common issue is software built using third-party or open-source components subject to licence obligations that have never been examined.

These issues can materially reduce the value of the acquisition.

For a technology startup, an IP ownership audit should therefore be treated as a central component of legal due diligence.

16. Data Protection Compliance Should Be Reviewed

Startups processing customer, employee or user data must comply with Turkish personal data protection legislation, particularly Law No. 6698 on the Protection of Personal Data (KVKK).

This becomes particularly important for SaaS, artificial intelligence, health-tech, fintech, e-commerce and marketplace businesses.

The investor should understand:

where personal data is stored, whether data is transferred outside Türkiye, which cloud providers are used, whether customer consents and privacy notices are compliant, whether special categories of personal data are processed and whether there have been previous data breaches.

The acquisition of the company does not erase previous KVKK violations.

Therefore, an investor buying the shares may indirectly inherit the economic consequences of past compliance failures.

17. E-TUYS Foreign Investment Notifications

A Turkish company becoming foreign-owned may also have foreign investment reporting obligations.

Türkiye operates the E-TUYS electronic system for foreign direct investment information.

Official investment guidance states that foreign investment activity, capital and share-transfer information that was previously reported in paper form is now submitted electronically through E-TUYS.

Accordingly, post-closing compliance should include analysis of the relevant E-TUYS notifications.

The acquisition should not be regarded as complete merely because the money has been transferred and the SPA has been signed.

Corporate, trade-registry and foreign investment reporting obligations must also be completed.

18. Share Deal or Asset Deal?

Buying the company is not always the only solution.

Sometimes the investor may prefer to acquire only selected assets.

For example, the investor may want the startup’s:

software, trademark, customer contracts, domain names and equipment,

but not its historical tax or employment exposure.

An asset acquisition may sometimes permit greater separation from historical corporate liabilities.

However, asset transfers have their own legal, contractual, tax and regulatory consequences.

Customer contracts may require consent to assignment.

Licences may not be transferable.

Employees may be affected by business-transfer rules.

IP rights must be individually transferred.

Tax treatment can differ materially from a share acquisition.

Therefore, the investor should compare a share deal and an asset deal before determining the acquisition structure.

19. What Should Happen Before Closing?

A well-managed acquisition typically progresses through several stages.

The parties may first sign an NDA.

They may then negotiate a term sheet or letter of intent.

The investor conducts financial, legal, tax and technical due diligence.

The parties negotiate the SPA, Shareholders’ Agreement and other transaction documents.

Required Competition Authority or sectoral approvals are obtained.

The agreed conditions precedent are satisfied.

The share transfer and purchase-price payment then occur at closing.

Finally, corporate registrations, shareholder records, board appointments and E-TUYS or other regulatory notifications are completed.

This sequencing is important.

If regulatory approval is required, the parties should generally structure the transaction so that control is not transferred before the necessary clearance has been obtained.

20. Buying an Existing Startup vs Establishing a New Company

Buying an existing startup can provide immediate access to an existing business model, customers, employees, licences, technology, market reputation and revenue.

It may therefore allow a foreign investor to enter the Turkish market much faster than developing a new business from zero.

However, the investor also acquires exposure to the company’s history.

Establishing a new Turkish company generally starts with a clean corporate vehicle.

Buying an existing company means inheriting a corporate structure that may contain valuable assets — but also hidden legal problems.

For this reason, the decision can be summarized as follows:

A new company gives the investor a cleaner starting point.

An acquisition gives the investor a faster starting point.

Whether speed is worth the additional historical risk depends heavily on due diligence and transaction documentation.

Frequently Asked Questions

Can a foreign individual buy a Turkish startup?

Yes. Foreign natural persons may generally make foreign direct investments in Türkiye and acquire shares in Turkish companies.

Can a foreign company acquire 100% of a Turkish company?

Generally yes, subject to sector-specific restrictions and regulatory requirements.

Is a Turkish partner mandatory?

Generally no.

Can the foreign investor acquire only 20%?

Yes. Minority investments are possible.

Can a foreign investor invest through a capital increase instead of buying founder shares?

Yes. This is one of the most common structures used in startup financing.

Is government permission always required?

No. Türkiye’s general foreign investment regime is notification-based rather than a general prior-approval system. However, Competition Authority clearance and sector-specific regulatory approval may be required depending on the transaction. The Foreign Direct Investment Law expressly reflects the notification-based approach.

Does purchasing the shares remove previous company debts?

No. The company remains the same legal entity and its liabilities generally remain with it.

Does the investor need a Turkish company to hold the investment?

Not necessarily. A foreign individual or foreign legal entity may generally hold the shares directly.

Can profits later be transferred abroad?

The Foreign Direct Investment Law protects the ability of foreign investors to transfer items including net profits, dividends and proceeds from the sale or liquidation of an investment abroad through banks or financial institutions, subject to applicable tax and regulatory rules.

Conclusion

A foreign investor does not have to establish a new company in Türkiye before entering the Turkish market.

It may instead acquire part or all of an existing Turkish startup.

Turkish foreign investment law expressly recognizes share acquisitions as foreign direct investments, and foreign investors generally receive the same treatment as domestic investors.

For many investors, acquiring an existing startup may be commercially more attractive because the investor immediately gains access to an existing company, team, technology, customers and revenue.

However, this advantage comes with a critical legal consequence:

the investor is acquiring a company with a history.

For that reason, the central legal question in a Turkish startup acquisition is usually not whether the foreign investor is permitted to buy the company.

The central questions are:

What exactly is being acquired? What liabilities already exist? Who owns the technology? Are the founders properly bound? Are there hidden shareholders or dilution rights? Is Competition Authority approval required? Are regulatory licences affected by the change of control? And does the SPA adequately protect the investor if something disclosed by the seller turns out to be incorrect?

A properly structured Turkish startup acquisition should therefore combine corporate due diligence, tax review, IP analysis, employment review, regulatory analysis, competition-law assessment and carefully drafted acquisition documents.