Introduction: Can a Foreign Investor Establish a Joint Venture in Turkey?

Yes. Foreign investors can establish joint ventures with Turkish companies, Turkish individuals or other foreign investors, and joint ventures are widely used in Turkey for manufacturing, infrastructure, construction, energy, technology, real estate, healthcare, distribution, defence-related projects and other strategic investments.

Turkey’s foreign direct investment regime is based on the principle of equal treatment. International investors are generally entitled to establish companies and acquire shares under the same fundamental rules applicable to domestic investors. Turkey’s official investment guidance also expressly confirms that there is no general nationality restriction on joint venture shareholders or persons holding management rights, except where special sector legislation applies, such as in certain broadcasting, maritime and civil aviation activities.

However, the term “joint venture” does not describe a single company form under Turkish law.

A joint venture can be structured as a contractual cooperation arrangement, often resembling an ordinary partnership – adi ortaklık, or the parties can establish a separate Turkish company that becomes the vehicle through which the joint business operates.

Official Turkish investment guidance confirms that a joint venture is generally regarded as an ordinary partnership without separate legal personality, but in practice parties frequently choose to establish a commercial company. The same official guidance notes that a joint stock company – Anonim Şirket (A.Ş.) is often preferred because it allows greater flexibility in creating share groups and provides a more suitable shareholder-liability structure for many investments.

There is also no single standalone “Joint Venture Law” governing every JV in Turkey. Instead, the applicable rules depend on the chosen legal structure. A contractual joint venture will primarily be governed by the relevant contractual and partnership rules, while a corporate joint venture will also be subject to the Turkish Commercial Code, its articles of association, corporate governance rules and other sector-specific legislation. It is common practice for JV partners to execute a detailed shareholders’ agreement regulating their commercial relationship.

For a foreign investor, therefore, the real question is not merely:

“Can we form a joint venture in Turkey?”

The more important question is:

“How should the joint venture be structured so that ownership, management, funding, intellectual property, decision-making, deadlock and exit are controlled before a dispute arises?”

That question should be answered before capital is transferred and preferably before the Turkish JV company is incorporated.

This guide explains how foreign investors can structure a joint venture in Turkey in 2026, including the differences between contractual and corporate JVs, A.Ş. and Ltd. Şti. structures, shareholders’ agreements, control rights, financing, work permits, competition law, taxation and exit mechanisms.

1. What Is a Joint Venture Under Turkish Law?

A joint venture can broadly be described as a business arrangement in which two or more independent parties combine certain resources, capital, know-how, assets or commercial capabilities to pursue a common economic objective.

For example, a foreign technology company may have proprietary software but no Turkish distribution network.

A Turkish company may have:

local customers, regulatory knowledge, sales teams and market access.

The parties may decide to cooperate by establishing:

Foreign Technology Company – 60%

and

Turkish Partner – 40%

in a new Turkish company.

That Turkish company becomes the operating joint venture.

Another joint venture may be project-based.

For example, two construction companies may cooperate only for a specific infrastructure tender without establishing a permanent standalone corporation.

The correct legal form therefore depends heavily on the commercial objective.

Turkey’s official investment guidance recognises this distinction by explaining that a JV may be organised as an ordinary partnership without legal personality, although commercial-company structures are widely preferred in practice.

2. Contractual Joint Venture or Corporate Joint Venture?

This is the first major structural decision.

A contractual joint venture is created primarily by agreement between the parties. It can be useful where the cooperation is limited to a specific project, tender, construction contract, research project or other defined activity.

A corporate joint venture, by contrast, involves establishing a separate Turkish legal entity.

The new company can itself:

enter contracts, employ personnel, maintain bank accounts, hold licences, own property, register intellectual property, borrow funds and conduct business in its own name.

For a long-term commercial operation, a corporate JV will therefore often provide clearer separation between the parents’ businesses and the joint operation.

A simplified comparison is:

Neither model is universally superior.

The key issue is whether the parties intend to create a lasting standalone business.

3. Why Is an A.Ş. Often Preferred for Turkish Joint Ventures?

Turkey’s official Investment Office identifies the A.Ş. as the frequently preferred corporate form for JVs because of its ability to establish different share groups and its more flexible shareholder-liability characteristics.

That flexibility can be important in a JV.

Suppose a foreign investor provides 70% of the capital but the Turkish strategic partner contributes essential local know-how.

The parties may not want ordinary ownership percentage alone to determine every corporate right.

They may instead want to create mechanisms covering:

board nomination rights, different share groups, voting arrangements, preferred economic rights or specified veto rights.

The A.Ş. is generally better adapted to sophisticated investment and future financing structures.

As of 2026, the minimum capital for an ordinary Turkish A.Ş. is TRY 250,000. For a non-public A.Ş. using the registered capital system, the minimum initial capital is TRY 500,000. At least one-quarter of cash capital subscribed in an A.Ş. must generally be paid before registration, with the balance payable within 24 months.

However, the statutory minimum should not be confused with an appropriate commercial capital level.

A manufacturing JV requiring EUR 10 million of machinery should not be capitalised at TRY 250,000 merely because that amount satisfies the corporate-law minimum.

4. Can a Joint Venture Be Established as an Ltd. Şti.?

Yes.

A limited liability company can also be used as a JV vehicle.

The current minimum capital for a Turkish Ltd. Şti. is TRY 50,000, and the capital may generally be paid within 24 months after registration.

An Ltd. Şti. can work well where the JV:

has a small number of partners, does not expect outside institutional investors, has a relatively simple governance structure and is intended to remain closely held.

However, foreign investors should not choose the Ltd. Şti. simply because its statutory minimum capital is lower.

For a sophisticated strategic JV, the parties may later discover that:

share transfers are more formal, governance flexibility is more limited, the structure is less convenient for future investment rounds or exit mechanics are more cumbersome.

The long-term business model should therefore determine the company type.

5. Can the Foreign Investor Own More Than 50% of the Joint Venture?

Generally yes.

There is no general rule requiring the Turkish partner to own a majority simply because the JV operates in Turkey.

A structure can therefore be:

Foreign Investor 80% – Turkish Partner 20%

or

Foreign Investor 51% – Turkish Partner 49%

or

50% – 50%.

Turkey’s foreign investment regime generally allows foreign investors the same rights and liabilities as domestic investors, and official guidance confirms that nationality restrictions on JV ownership and management are limited to specific regulated sectors.

The appropriate ownership percentages should nevertheless be designed together with the governance structure.

A 51% shareholder may not have effective unilateral control if the shareholders’ agreement grants the 49% shareholder veto rights over critical strategic decisions.

Similarly, a 50% shareholding does not necessarily mean the parties should have identical authority over every operational issue.

6. Be Careful With 50/50 Joint Ventures

A 50/50 JV is commercially attractive because it signals equality.

Legally, it can create serious deadlock.

Imagine that the partners must jointly approve:

the budget, annual business plan, borrowing, hiring of the CEO and capital increases.

Then they disagree.

Neither can form the required majority.

The company may become unable to operate effectively.

A 50/50 JV should therefore never be established without asking:

What happens when the partners cannot agree?

The answer should be written into the contractual structure before incorporation.

7. The Shareholders’ Agreement Is the Core Joint Venture Document

The articles of association are legally essential.

But for sophisticated joint ventures, they are rarely enough by themselves.

Turkey’s official investment guidance expressly notes that shareholders’ agreements are commonly entered into to regulate the relationship between JV parties and the maintenance of the joint venture.

A well-drafted JV shareholders’ agreement normally provides the commercial constitution of the relationship.

It should address not merely what happens while relations are good, but what happens when:

one shareholder refuses funding, the business loses money, one partner competes with the JV, the shareholders disagree about strategy or one party wants to exit.

The agreement should therefore be prepared as a dispute-prevention document, not merely a ceremonial incorporation document.

8. Shareholders’ Agreement and Articles of Association Must Be Coordinated

Foreign investors often import an English-law or US-style JV agreement and assume every provision automatically works at Turkish corporate-law level.

That can be dangerous.

The shareholders’ agreement is fundamentally contractual.

The articles of association are the registered constitutional document of the company and operate within the Turkish Commercial Code framework.

Certain governance arrangements should therefore be reflected in the articles where legally possible if the parties want them to have appropriate corporate effect.

The documents should not contradict each other.

For example, if the JV agreement says that one shareholder has the right to nominate two directors but the corporate documents do not properly implement the intended governance arrangement, disputes may arise concerning enforceability.

The correct process is:

negotiate commercial rights → test them under Turkish corporate law → reflect them in the SHA and articles to the legally appropriate extent.

9. Board Composition Should Be Agreed Before Incorporation

One of the first governance questions is:

Who controls the board?

For example:

Foreign Partner: 60%
Turkish Partner: 40%

The parties might agree that the board has five members:

three nominated by the foreign investor;

two nominated by the Turkish partner.

Alternatively, they may create a four-person board with two nominations each.

But a board structure should never be designed in isolation.

The agreement should also determine:

meeting quorum, decision quorum, casting vote, replacement rights, chairmanship and what happens if one party refuses to nominate or attend.

Otherwise, a shareholder can sometimes create a practical veto simply by preventing a quorum.

10. What Are Reserved Matters?

Reserved matters are strategically important decisions that cannot be taken without the consent of a specified shareholder or shareholder group.

They are one of the most important protection mechanisms for minority partners.

For example, a foreign investor holding 40% might insist that the 60% Turkish shareholder cannot unilaterally:

change the business model, issue new shares, incur major debt, sell critical assets, approve related-party transactions, dispose of intellectual property or amend fundamental company documents.

But reserved matters should not be drafted so broadly that every routine operational decision requires unanimous shareholder consent.

A company cannot function efficiently if buying office equipment requires approval from parent-company boards on two continents.

The better distinction is:

strategic matters require enhanced consent; ordinary operations remain with management.

11. Veto Rights Can Have Competition Law Consequences

Veto rights are not only a corporate governance issue.

They can also affect whether the JV is considered to be under joint control for Turkish merger-control purposes.

Turkish Competition Authority practice treats a lasting, full-function JV subject to joint control as a potentially relevant concentration under merger-control rules. Recent Competition Board decisions continue to examine transactions establishing full-function joint ventures and joint control.

Accordingly, veto rights concerning strategic matters such as the business plan, budget or senior management can be more than minority-investor protections: depending on their scope, they may contribute to a finding of joint control.

The competition-law structure should therefore be analysed before the SHA is finalised.

12. Turkish Competition Authority Approval May Be Required

The establishment of a full-function joint venture can fall within Turkish merger-control rules where the relevant conditions and turnover thresholds are met.

A full-function JV is generally expected to operate on a lasting basis as an independent economic entity rather than merely serving as a temporary contractual mechanism between its parents. Current Turkish Competition Authority practice continues to approve transactions involving the establishment of full-function JVs.

Turkey materially updated its merger-control thresholds in February 2026. The Competition Authority increased the previously applicable headline figures so that the former TRY 250 million threshold became TRY 1 billion, the TRY 750 million Turkish turnover threshold became TRY 3 billion, and the TRY 3 billion worldwide turnover threshold became TRY 9 billion.

The Authority then updated its merger and control guidelines in May 2026, including clarifications relevant to joint venture transactions.

Accordingly, before forming a JV between significant corporate groups, the parties should ask:

Does the structure create joint control?

Is the JV full-function?

Do the current turnover thresholds apply?

Must clearance be obtained before closing?

The JV should not begin operating before required merger-control approval is obtained.

13. Deadlock Clauses Are Essential

A deadlock occurs when the JV’s governing bodies cannot make a decision required for the business to continue.

Typical deadlock subjects include:

funding, annual budget, business plan, CEO appointment, acquisitions, major borrowing or strategic direction.

The JV agreement should define both:

what constitutes a deadlock

and

what happens next.

A well-designed mechanism may first require escalation from the JV’s operational representatives to senior executives of the parent companies.

If the dispute remains unresolved, the parties might use mediation, expert determination for technical matters or ultimately a buy-sell mechanism.

Different mechanisms are appropriate for different JVs.

The key point is that “the parties will negotiate in good faith” is rarely sufficient for a business worth millions of euros.

14. Russian Roulette and Buy-Sell Mechanisms

In some 50/50 joint ventures, the parties use buy-sell procedures.

One shareholder offers a price for the other’s shares.

The recipient must then either:

sell at that price

or

buy the offeror’s shares at an equivalent valuation basis.

These clauses can be commercially effective because a party proposing an artificially low price risks being forced to sell its own shares at that low valuation.

However, they are not appropriate in every JV.

If one shareholder is a multinational corporation with unlimited funding and the other is a smaller local company, the mechanism may heavily favour the stronger party.

JV exit rules should therefore reflect the actual financial power of the shareholders.

15. Capital Contributions Must Be Clearly Defined

The parties should determine exactly what each shareholder contributes.

One party may provide cash.

Another may provide:

technology, machinery, trademarks, land, distribution rights, regulatory expertise or customer relationships.

The legal treatment of non-cash contributions should be assessed carefully.

Turkey’s company establishment procedures permit contributions in kind under the applicable corporate rules and require specified valuation and registry documentation where relevant. Official establishment guidance refers to expert valuation reports and confirmation regarding restrictions on assets contributed in kind.

A party promising to contribute “know-how” should not leave the concept undefined.

The JV agreement should specify:

what intellectual property or knowledge is provided, whether ownership or only a licence is transferred, whether the licence is exclusive and what happens when the JV terminates.

16. Plan Future Funding Before the JV Needs Cash

Many joint ventures fail not because the underlying business is bad, but because shareholders disagree about additional financing.

Assume:

Initial capital: EUR 2 million.

Two years later, the JV needs EUR 5 million more.

Foreign Partner wants to fund.

Turkish Partner cannot.

What happens?

Possible outcomes include:

shareholder loans, third-party bank debt, capital increase or dilution of the non-funding shareholder.

The JV agreement should determine the funding hierarchy.

Otherwise, one party may claim that additional funding is essential while the other argues that the capital increase is designed merely to dilute its ownership.

Funding provisions are therefore central minority-protection provisions.

17. Shareholder Loans Need Tax and Corporate Analysis

A parent company may prefer to finance the JV partly through debt instead of equity.

For example:

Foreign shareholder capital contribution: EUR 3 million.

Foreign shareholder loan: EUR 5 million.

This can provide flexibility, but cross-border related-party loans should be reviewed under Turkish tax rules, including interest deductibility, transfer pricing and other financing restrictions.

The JV agreement should also address whether both shareholders must finance pro rata or one shareholder can provide additional debt.

A loan by the foreign shareholder should not silently create economic control that contradicts the negotiated equity relationship.

18. Tax Treatment Depends on the JV Structure

The tax analysis depends heavily on whether the arrangement is operated through a Turkish capital company or another JV form.

Where the JV is established as an ordinary Turkish A.Ş. or Ltd. Şti., the company generally falls within Turkey’s corporate tax framework.

Turkey’s current official tax guidance states that the general corporate income tax rate applicable to ordinary commercial corporate income is 25%, while certain financial institutions and specified regulated businesses are subject to a 30% rate.

A contractual ordinary partnership or a transaction structured as a tax-recognised “business partnership” can produce a different analysis.

Accordingly, tax advice should be obtained before deciding that the contractual JV is “simpler” than incorporating a company.

The relevant issues may include corporate income tax, VAT, withholding, dividend distributions, management fees, royalties, shareholder loans and double taxation treaties.

19. Related-Party Transactions Must Be Controlled

A JV often trades with its own shareholders.

For example, the foreign partner may license technology to the JV.

The Turkish partner may supply logistics.

One shareholder may provide management services.

These transactions can create conflicts of interest.

The JV agreement should therefore establish a related-party transaction policy addressing:

approval, pricing, disclosure and conflicts.

The commercial terms should also be reviewed from a transfer-pricing perspective where parties are related.

Otherwise, a controlling shareholder could indirectly extract value from the JV through excessive service fees while minority shareholders receive little dividend.

20. Intellectual Property Must Be Addressed Before the JV Starts

Intellectual property is often the most valuable JV asset.

The agreement should distinguish at least two categories:

Background IP — intellectual property owned by a shareholder before the JV.

Foreground IP — intellectual property developed through the JV.

Assume the foreign shareholder owns valuable AI software before establishing the JV.

The foreign investor may not want to transfer ownership permanently.

Instead, it could grant a limited licence to the Turkish JV.

The agreement should then regulate:

territory, term, exclusivity, sublicensing, modifications, confidentiality, termination and post-JV use.

The parties should also decide who owns improvements developed by JV personnel.

Leaving this question unresolved can make eventual separation extremely difficult.

21. Non-Compete and Exclusivity Clauses Should Be Carefully Drafted

A JV makes little commercial sense if one shareholder can immediately establish a competing business and divert customers away.

For this reason, JV agreements frequently contain:

non-compete, non-solicitation and exclusivity obligations.

However, these restrictions must be drafted proportionately and should be reviewed under Turkish competition law.

The restriction should relate logically to the JV’s activities, market and duration.

An unlimited prohibition preventing an international group from operating in an entire industry for decades would raise very different issues from a targeted restriction protecting the JV’s agreed Turkish business during the investment period.

22. Determine the JV’s Business Scope Clearly

The JV agreement and articles should describe what the company is intended to do.

An excessively narrow business scope can become problematic as the business expands.

An excessively broad scope may create disputes concerning which opportunities belong to the JV and which remain available to the shareholders independently.

For example:

Foreign Partner discovers a new Middle Eastern customer.

Does that opportunity belong to the Turkish JV?

Or can the foreign parent serve the customer directly?

Questions about:

territory, products, customers, channels and future technologies

should be considered at the beginning.

23. Foreign Corporate Shareholders Need Proper Turkish Formation Documents

Where a foreign company becomes a shareholder of the Turkish JV, the Turkish incorporation process requires corporate documents from that foreign shareholder.

Current official guidance identifies documents such as a certificate of activity/current corporate status, an authorised corporate resolution approving incorporation and documents establishing authorised signatories. If a foreign legal entity will itself be appointed as a board member of the new company, the individual who will act on behalf of that legal entity must also be designated.

Documents issued abroad generally need to be appropriately notarised and apostilled, or otherwise authenticated through the relevant Turkish consular procedure, and translated into Turkish with the required certification.

For a multinational group, these documents should be prepared well before the Turkish closing date.

24. Company Formation Is Conducted Through MERSIS and the Trade Registry

Turkish company establishment is carried out through the commercial registration system.

The official Investment Office confirms that Trade Registry procedures are processed through MERSIS, Turkey’s Central Registry Record System, while the relevant company is ultimately registered through the competent Trade Registry Directorate.

The corporate JV’s articles should therefore be prepared after commercial terms have been agreed.

It is a mistake to form a “temporary” company quickly and postpone all governance decisions.

Fixing the structure later can require:

articles amendments, new corporate approvals, share transfers and potentially tax or regulatory analysis.

25. E-TUYS Reporting Applies to Foreign-Invested JV Companies

A Turkish JV with foreign investment should also consider E-TUYS, the electronic foreign investment information system.

Official guidance identifies electronic forms covering:

FDI Activity Information, FDI Capital Data and FDI Share Transfer Data.

Therefore, foreign investment compliance continues after incorporation.

A JV that later receives additional foreign capital or undergoes shareholder changes should ensure that the relevant foreign-investment information is updated correctly.

E-TUYS responsibility should be assigned internally rather than assumed to be someone else’s task.

26. New JV Companies in 2026 Must Consider ETDS

A significant corporate-record development applies in 2026.

The Ministry of Trade states that companies registered on or after 1 January 2026 must maintain their:

share ledger

and

general assembly meeting and negotiation book

electronically through the Electronic Commercial Book System — ETDS.

The board resolution book may be maintained electronically on an optional basis under the current framework.

For a JV, accurate shareholder records are particularly important because corporate governance depends heavily on:

ownership percentages, share groups and voting rights.

The electronic corporate book framework should therefore be reflected in the JV’s company-secretarial compliance process.

27. Do Foreign JV Managers Need Turkish Work Permits?

Possibly.

A foreign company can hold shares without automatically giving each foreign executive the right to work in Turkey.

If foreign individuals will actively work as managers or executives of the JV, the Turkish work permit rules should be examined separately.

As of August 2026, the ordinary foreign company-partner work permit criteria generally require, for qualifying balance-sheet businesses, at least TRY 500,000 paid-up company capital, at least TRY 500,000 capital participation by the foreign partner and at least 20% ownership. The business must generally employ at least five Turkish citizens, with that requirement applying from the beginning of the seventh month of the foreign company partner’s first permit period.

An important current exception applies where the foreign partner’s capital share is at least USD 100,000: the specified company-partner capital, ownership and five-employee tests do not apply, although work permit approval is still subject to Ministry assessment.

JV ownership and work permit planning should therefore be coordinated.

28. A Corporate Investor and Its Foreign Executive Are Different Persons

Suppose:

German Holding GmbH owns 60% of Turkish JV A.Ş.

The German company itself is the shareholder.

The German company’s CEO relocates to Istanbul to manage the JV.

The CEO does not automatically receive work authorisation simply because the German parent owns 60%.

The shareholder and the natural person working in Turkey are legally different.

Foreign managers and employees should therefore be analysed under the work permit framework applicable to their actual roles.

29. Regulated Sectors Require Special Review

Although foreign investors generally enjoy equal treatment, the official investment guidance expressly identifies sector-specific exceptions to the ordinary nationality framework.

A JV involving a regulated business should therefore investigate the relevant regulator before incorporation.

Potential questions include:

Is a licence required?

Does the regulator restrict ownership percentages?

Does a foreign shareholder need prior approval?

Are directors subject to qualifications?

Does a subsequent change of control require regulatory consent?

This is particularly important because a JV can be validly incorporated under the Turkish Commercial Code while still lacking authority to conduct the regulated business for which it was created.

30. Control of Bank Accounts Should Be Agreed

Disputes frequently arise not from shareholder voting but from cash control.

A JV agreement should determine:

who can open bank accounts, who can instruct transfers, what payment thresholds require dual signature and whether related-party payments require enhanced approval.

A 50% shareholder may possess powerful formal rights but have little practical protection if the other shareholder controls all online banking credentials.

Financial controls should therefore form part of governance.

31. Management Information Rights Are Critical

Foreign investors should require reliable access to financial and operational information.

A JV shareholder should not discover six months after year-end that the company:

took unexpected debt, entered a related-party agreement or suffered significant losses.

The agreement can establish regular reporting obligations covering:

monthly management accounts, cash position, budget variance, sales, debt, litigation and tax compliance.

The stronger the information system, the less likely shareholder disagreements are to arise from mistrust.

32. Audit Rights Should Be Defined

The parties should determine:

who appoints the auditor, whether internal audit rights exist and whether a shareholder can inspect records in specified circumstances.

A foreign shareholder operating from abroad needs practical mechanisms for verifying performance.

“Trust the local management” is not a governance framework.

At the same time, inspection rights should not be drafted in a way that allows one partner to disrupt normal operations continuously.

33. Future Share Transfers Must Be Regulated

A JV exists because the parties intentionally selected each other.

The foreign shareholder may not want the Turkish partner to sell its shares tomorrow to a competitor.

Likewise, the local partner may not want the foreign investor to sell to an unknown fund without restriction.

The shareholders’ agreement should therefore regulate future transfers.

Typical mechanisms include:

lock-up periods, pre-emption rights, rights of first refusal, permitted affiliate transfers, tag-along rights and drag-along rights.

These rights should be designed together rather than copied mechanically from another transaction.

34. Tag-Along Rights Protect Minority Shareholders

Assume:

Foreign Investor holds 70%.

Turkish Partner holds 30%.

A third party offers to buy the foreign investor’s 70%.

Without protection, the minority shareholder may be left owning 30% alongside an unknown new controlling investor.

A tag-along right can allow the minority shareholder to participate in the sale on corresponding terms.

For minority JV partners, this can be a critical exit protection.

35. Drag-Along Rights Can Enable a Full Company Sale

Now assume a strategic buyer wants to acquire 100% of the JV.

The 70% shareholder wants to sell.

The 30% shareholder refuses.

Without a contractual solution, the strategic purchaser may abandon the deal because it does not want only 70%.

A properly drafted drag-along right may allow the majority shareholder to require the minority to participate in a qualifying full-company sale, subject to the negotiated safeguards.

A JV intended eventually to be sold should address this issue from the beginning.

36. What Happens if One Shareholder Breaches the JV Agreement?

The agreement should distinguish ordinary breach from serious default.

A material default might include:

failure to provide committed capital, unauthorised competition, misuse of confidential information, sanctions violations, fraud or insolvency.

Potential contractual consequences could include damages, suspension of certain rights, call options or forced transfer mechanisms, subject to Turkish-law enforceability.

The parties should avoid provisions that are commercially punitive but legally unrealistic.

37. What Happens if a Parent Company Changes Control?

The identity of a JV partner can be central to the deal.

Suppose the foreign shareholder is a global technology company.

The Turkish partner entered the JV specifically because of that technology.

The foreign company is then acquired by the Turkish partner’s largest competitor.

The JV agreement should determine whether a parent-level change of control:

is unrestricted, requires notification or gives the other partner an exit or purchase right.

This issue is particularly important for industry-specific strategic partnerships.

38. How Should JV Disputes Be Resolved?

Foreign investors frequently choose arbitration for cross-border JV disputes.

Possible disputes include:

shareholder agreement breach, funding disputes, IP rights, exit valuation and deadlock-related claims.

The dispute clause should identify clearly:

governing law, seat of arbitration, institution or rules, number of arbitrators and language.

But not every issue can necessarily be treated as a purely contractual dispute between shareholders.

Certain corporate matters may involve mandatory Turkish company law, Trade Registry actions or remedies before Turkish courts.

The dispute-resolution strategy should therefore distinguish corporate and contractual claims rather than inserting a generic foreign arbitration clause without Turkish-law review.

39. Turkish Law or Foreign Law for the Shareholders’ Agreement?

International partners sometimes request English, Swiss or another foreign law.

Whether this is commercially appropriate depends on the transaction.

Even where the SHA uses foreign governing law, the Turkish JV company itself remains incorporated under Turkish law.

Its:

corporate existence, corporate organs, share capital, mandatory corporate procedures and Trade Registry matters

remain subject to Turkish corporate rules.

For many Turkish corporate JVs, using Turkish law for the core shareholder structure can therefore reduce unnecessary conflict between contract and mandatory company law.

The choice should nevertheless be made transaction by transaction.

40. A Practical Example: 60/40 Technology Joint Venture

Assume:

US Software Group – 60%

Turkish Distribution Company – 40%.

The parties establish Turkish Technology JV A.Ş.

The US partner contributes:

software licence, EUR 3 million cash and international technical support.

The Turkish partner contributes:

EUR 2 million cash, local sales infrastructure and customer network.

A strong JV structure might provide that the US shareholder nominates three of five directors while the Turkish shareholder nominates two.

Routine operational decisions are made by management.

Major reserved matters require approval from at least one nominee of each shareholder.

The JV receives a defined licence to the US company’s pre-existing software.

New Turkey-specific IP developed by the JV is dealt with separately.

Neither shareholder may compete with the JV in the defined Turkish market during the agreed period, subject to applicable competition-law limitations.

Funding rules determine what happens if another EUR 5 million is needed.

A detailed deadlock clause provides escalation and eventual exit.

Tag, drag and change-of-control provisions determine how a future acquisition works.

Competition-law analysis is completed before implementation if the JV constitutes a full-function jointly controlled undertaking meeting the relevant thresholds.

This is substantially stronger than simply incorporating an A.Ş. with 60/40 shares and hoping the partners remain aligned.

Frequently Asked Questions About Joint Ventures in Turkey

Can a foreign company establish a JV with a Turkish company?

Yes. Foreign and Turkish investors may generally form joint ventures, subject to specific sector restrictions. Turkey’s investment regime is based on equal treatment between foreign and domestic investors.

Is there a specific Turkish Joint Venture Law?

No single standalone statute governs every JV. The applicable legal framework depends on whether the JV is contractual or established through a particular Turkish company form.

Does a JV need a separate company?

Not necessarily. A JV may be contractual, including an ordinary-partnership structure, but long-term operating JVs frequently use a separate company.

Which company type is normally preferred?

Official investment guidance identifies the A.Ş. as a commonly preferred JV structure due to its share-group flexibility and shareholder-liability characteristics.

What is the minimum A.Ş. capital in 2026?

TRY 250,000 for an ordinary joint stock company. A non-public A.Ş. using the registered capital system has a TRY 500,000 minimum initial capital.

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

TRY 50,000.

Does the Turkish partner need to own 51%?

Generally no. There is no general local-majority requirement merely because the JV operates in Turkey, although special sectors can be subject to different rules.

Is a shareholders’ agreement necessary?

It is not the document that creates every corporate JV, but it is widely used and highly advisable for sophisticated JVs. Official Turkish investment guidance expressly recognises the common practice of using a shareholders’ agreement to govern relations between JV partners.

Can a 40% shareholder have veto rights?

Yes, contractual and corporate governance rights can be structured to protect minority shareholders within applicable Turkish law. Veto rights should also be reviewed for competition-law implications because strategic veto rights can be relevant to joint-control analysis.

Can a JV require Competition Authority approval?

Yes. The formation of a lasting full-function JV under joint control may fall within merger-control rules if the applicable turnover conditions are met. Turkey increased the relevant merger-control thresholds in February 2026.

What are the current headline merger-control thresholds?

The Competition Authority increased 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 threshold to TRY 9 billion in February 2026. The complete notification test should be applied transaction by transaction.

Does a foreign JV shareholder need a work permit?

Share ownership itself and work authorisation are separate. Foreign individuals actively working or managing the Turkish JV may need work permits depending on their role and applicable exemptions.

What are the current foreign company-partner work permit criteria?

Under the ordinary current framework, a foreign company partner generally needs at least TRY 500,000 capital participation, the company needs at least TRY 500,000 paid-up capital and the foreigner generally needs at least 20% ownership, together with the applicable five-Turkish-employee rule from the seventh month. These specific tests do not apply where the foreign partner’s capital share is at least USD 100,000.

Is E-TUYS relevant to a foreign-invested JV?

Yes. Foreign investment activity, capital and share transfer information is collected through E-TUYS.

Conclusion: What Is the Best Way to Structure a Joint Venture in Turkey?

A joint venture can be one of the most effective ways for an international investor to enter the Turkish market.

A foreign investor can combine:

international capital, technology and know-how

with a Turkish partner’s:

local market knowledge, customers, licences, distribution network and operational capacity.

Turkish law generally permits this structure without requiring the local partner to hold a majority merely because one shareholder is foreign. The country’s foreign investment regime is based on equal treatment, while official investment guidance specifically recognises corporate and contractual JV structures.

However, forming the company is the easy part.

The real work is designing the relationship.

The first question is whether the cooperation should be contractual or conducted through a separate Turkish company.

A limited project may justify an ordinary contractual joint venture.

A permanent operating business will frequently benefit from a separate corporate vehicle.

Where a company is used, the parties must then choose between an A.Ş. and Ltd. Şti.

Official Turkish investment guidance identifies the A.Ş. as a commonly preferred JV structure, particularly because of its flexibility concerning share groups and shareholder liability.

For sophisticated strategic or investment JVs, that flexibility can be particularly valuable.

But company type is only the beginning.

The strongest Turkish JV structure should answer in advance:

Who owns the company?

Who controls the board?

Which decisions require joint approval?

Who funds future losses or expansion?

What happens if one shareholder refuses new funding?

Who owns existing technology?

Who owns technology developed by the JV?

Can either shareholder compete?

Can shares be sold to third parties?

What happens when the partners disagree?

How can one partner exit?

What happens if a strategic buyer wants 100%?

Those questions belong in a carefully coordinated shareholders’ agreement and corporate governance structure.

The articles of association and SHA should not be drafted independently.

The commercial deal must first be understood and then implemented within Turkish corporate law.

For a 50/50 JV, the deadlock mechanism is particularly important.

Equality of ownership without a method for resolving disagreement can result in paralysis.

For an unequal JV, minority protection is equally important.

A 30% or 40% shareholder may require reserved matters and veto rights to prevent the majority from fundamentally changing the business.

But those rights must also be reviewed under competition law.

If two parent companies jointly control a full-function JV, the formation of the JV may constitute a merger-control transaction.

Turkey materially updated its merger-control thresholds in February 2026, and the Competition Authority subsequently updated its merger and control guidance.

Competition analysis should therefore take place while the governance package is still being negotiated.

Capital and financing require the same advance planning.

A JV agreement that says only:

“Each party contributes initial capital.”

is incomplete.

It should also explain what happens when the company later needs more money.

If one shareholder funds and the other cannot, will there be:

shareholder debt, bank financing, dilution or another mechanism?

The answer can materially change control of the investment.

Foreign investors should also carefully protect intellectual property.

Background technology should not accidentally become permanently owned by the JV unless that result is intended.

Likewise, ownership of new IP created through the JV should be determined before engineers and employees begin developing it.

Foreign shareholder documentation and corporate compliance must also be planned.

Foreign corporate documents used in Turkish incorporation generally require appropriate authentication and Turkish translation.

Foreign-invested companies must also consider E-TUYS reporting for investment activity, capital and share transfers.

For JVs incorporated in 2026, the new ETDS corporate-book framework is also important: newly registered companies must maintain the share ledger and general assembly meeting and negotiation book electronically.

Foreign managers present another separate issue.

A foreign parent can hold shares without automatically granting its executives a right to work in Turkey.

Where foreign shareholder-managers will work actively in the JV, the current 2026 work permit requirements should be analysed. For company partners under the ordinary framework, the rules include TRY 500,000 capital requirements, a 20% ownership test and an eventual five-Turkish-employee requirement, subject to significant exceptions including the USD 100,000 foreign capital participation rule.

Tax should likewise be modelled before the structure is finalised.

A Turkish corporate JV generally operates within the Turkish corporate tax framework, for which the general business-income rate is currently 25%.

But shareholder loans, royalties, management services, dividends and cross-border transactions can create additional Turkish tax consequences.

Ultimately, the most effective Turkish JV formation process can be summarised as:

commercial objective → partner due diligence → contractual or corporate JV decision → A.Ş./Ltd. Şti. selection → ownership percentages → governance → reserved matters → funding → IP → competition-law analysis → tax analysis → work permit analysis → shareholders’ agreement → articles of association → incorporation → E-TUYS/ETDS compliance → ongoing governance → deadlock and exit.

One element in this process deserves particular emphasis:

Due diligence should apply not only to the business—but also to the partner.

A foreign investor may conduct detailed due diligence on a Turkish company while failing to investigate the future JV shareholder itself.

Before entering a long-term partnership, the investor should understand the prospective partner’s:

financial capacity, ownership structure, related companies, litigation history, regulatory position, commercial reputation and ability to fund future obligations.

A JV can survive difficult market conditions.

It is far less likely to survive when the partners fundamentally misunderstand each other’s financial capacity or commercial objectives.

For this reason, the key question should not be:

“Can we trust our Turkish partner today?”

A stronger legal question is:

“If our interests are no longer aligned five years from now, does the joint venture agreement give both parties a clear, enforceable and commercially workable path forward?”

That is the purpose of a properly structured joint venture agreement.

The objective is not to predict every future disagreement.

It is to ensure that disagreements do not destroy an otherwise valuable investment.

For foreign investors establishing a joint venture in Turkey, governance, funding, control and exit should therefore be negotiated with the same attention as the initial ownership percentages.

A 60% shareholding without effective governance may provide less protection than expected.

A 40% shareholder with carefully structured rights may have substantial strategic influence.

A 50/50 structure without deadlock provisions may be far more dangerous than either.

The best Turkish joint venture is therefore not necessarily the one with the most equal share split.

It is the one in which the legal structure accurately reflects:

what each party contributes, what each party controls, what each party expects to receive and how each party can leave.

This article reflects Turkish corporate, foreign investment, competition, tax and work permit legislation and publicly available official guidance as of August 2026. It is provided for general informational purposes only and does not constitute transaction-specific legal, tax, competition or investment advice. Every joint venture should be structured according to the parties’ sector, contributions, ownership percentages, regulatory requirements, intended duration, management model and exit strategy.