Introduction

Acquiring an existing company can be one of the fastest ways for a foreign investor to enter the Turkish market. Instead of establishing a new business from the beginning, recruiting employees, obtaining customers, negotiating supplier contracts and creating operational infrastructure, the investor may acquire an existing Turkish company with an established business, workforce, licences, contracts, assets and customer base.

Turkey generally permits foreign investors to acquire shares in existing Turkish companies. The Foreign Direct Investment Law is based on freedom to invest and equal treatment between international and domestic investors, subject to special rules applicable to certain regulated sectors.

However, buying the shares of an existing company is fundamentally different from establishing a new company.

When an investor acquires shares, the target company remains the same legal entity.

Its valuable assets remain within the company, but so do its historical liabilities.

These may include unpaid taxes, Social Security Institution liabilities, employee claims, pending lawsuits, undisclosed bank guarantees, defective commercial contracts, regulatory violations, intellectual property problems, personal data protection breaches, customer disputes, unpaid capital and historical transactions with former shareholders.

A company may therefore look profitable on paper while carrying liabilities that substantially exceed its purchase price.

This is why legal due diligence is one of the most important stages of any Turkish M&A transaction.

Due diligence is not simply a document review conducted to confirm that the company exists. It is a systematic investigation designed to answer four fundamental questions:

What exactly is the buyer acquiring?

What liabilities already exist inside the target company?

What risks may arise after closing from circumstances that occurred before closing?

How should those risks affect the purchase price and the Share Purchase Agreement?

A properly conducted Turkish company acquisition normally requires coordination between legal, financial, tax and sometimes technical or regulatory advisers.

This guide explains how to conduct due diligence when buying a company in Turkey in 2026, which corporate documents should be examined, how hidden liabilities may be identified and how the findings should be reflected in the acquisition agreement.

1. What Is Due Diligence in a Turkish Company Acquisition?

Due diligence is the investigation of a target company before the buyer becomes legally and financially committed to the acquisition.

In a typical share deal, the buyer is not acquiring individual assets one by one. It is acquiring shares in a company that already owns assets and owes liabilities.

For example, assume a foreign investor acquires 100% of a Turkish manufacturing company.

After closing, the investor discovers that the company has an undisclosed TRY 30 million tax assessment, two employee lawsuits, a bank guarantee securing another group company’s debt and a customer claim concerning defective products.

The investor did not personally create these liabilities.

However, the acquired company remains the debtor.

The buyer may have contractual claims against the seller if the SPA contains appropriate warranties and indemnities, but the underlying liability remains within the business.

Due diligence is intended to identify these issues before the buyer pays the purchase price.

2. Start by Confirming the Target Company’s Legal Existence and Corporate Structure

The first stage of corporate due diligence is usually verification of the company’s legal identity.

The buyer should confirm the exact:

company name, MERSIS number, Trade Registry registration, registered office, company type, capital, shareholder structure, management structure and authorised signatories.

The principal corporate framework will generally derive from the Turkish Commercial Code No. 6102, the Trade Registry Regulation, the company’s articles of association and its registered corporate decisions. The Ministry of Trade maintains the current company and Trade Registry legislative framework.

The investor should not rely solely on a current Trade Registry extract.

A full corporate review should also examine the company’s historical changes.

These may include capital increases, capital reductions, earlier share transfers, amendments to the articles, mergers, demergers, management changes and changes in representation authority.

Historical corporate records can reveal disputes or irregularities that are not obvious from the company’s current position.

3. Verify That the Seller Actually Owns the Shares

One of the most basic but essential questions in an acquisition is whether the seller legally owns the shares that it proposes to sell.

This may become complicated where the target is an old family company, where several historical share transfers have occurred or where inheritance has affected ownership.

The due diligence should compare, where applicable:

Trade Registry records, articles of association, share ledger, share certificates, shareholder resolutions, earlier transfer agreements, inheritance documentation, pledges and shareholder agreements.

The transfer rules also differ depending on whether the target is a limited liability company or a joint stock company.

For limited liability companies, the Ministry of Trade’s official guidance identifies a formal process involving execution and notarisation of the share transfer agreement, general assembly approval unless otherwise provided in the articles, and the applicable registration and announcement process.

Joint stock company shares are generally more freely transferable, although restrictions may arise from the Turkish Commercial Code, the articles, share type and sector-specific rules. Ordinary A.Ş. share transfers are generally not subject to the same universal registration and announcement process applicable to Ltd. Şti. transfers.

A buyer should therefore trace legal ownership rather than simply accept a representation stating that the seller is the shareholder.

4. Review the Articles of Association in Detail

The articles of association are one of the most important documents in corporate due diligence.

They can contain rules affecting:

share transfers, voting, management, capital increases, share groups, privileges, general assembly quorums, appointment rights and representation.

A foreign investor may agree commercially to acquire 40% of a company and later discover that another shareholder holds privileged voting rights or a contractual right to appoint the majority of directors.

Likewise, a seller may promise an unrestricted transfer even though the articles contain restrictions.

The articles should therefore be reviewed together with any shareholders’ agreement.

The buyer should identify whether contractual governance arrangements exist that may survive closing or restrict the purchaser’s ability to control the company.

5. Check the Share Ledger and Corporate Books

Corporate books can reveal inconsistencies that are not visible in public registry records.

The buyer should examine the share ledger and relevant board, manager and general assembly records.

This has become particularly important following Turkey’s transition toward the Electronic Commercial Book System.

The Ministry of Trade confirms that, for companies registered from 1 January 2026, the share ledger and general assembly meeting and negotiation book are required to be maintained through the Electronic Commercial Book System. Certain companies that were already subject to Ministry permission had earlier transition requirements.

Accordingly, due diligence in 2026 should determine whether the target’s corporate books are:

properly maintained, consistent with Trade Registry records and, where applicable, compliant with the ETDS regime.

Missing corporate books or unexplained inconsistencies should be treated as red flags.

6. Check Whether the Target Meets the New Minimum Capital Requirements

This is an especially important 2026 due diligence point.

The current minimum capital amounts are TRY 50,000 for limited liability companies and TRY 250,000 for ordinary joint stock companies, while a non-public A.Ş. using the registered capital system is subject to a TRY 500,000 minimum starting capital.

Existing companies whose capital remains below the new statutory minimums have until 31 December 2026 to bring their capital into compliance. The Ministry of Trade states that companies failing to satisfy the statutory requirement by that date may be deemed dissolved under the relevant transitional provision.

Therefore, an investor purchasing an old Turkish company in 2026 should specifically check its registered and paid-up capital.

An acquisition of an old Ltd. Şti. with TRY 10,000 historical capital may require an immediate post-closing capital increase.

7. Tax Due Diligence Is Critical

Tax exposure is frequently one of the largest risks in Turkish company acquisitions.

A target company may have no currently visible overdue tax debt but may nevertheless face significant future assessments relating to earlier periods.

Tax due diligence should examine areas such as corporate income tax, VAT, withholding, payroll taxes, stamp tax, transfer pricing, related-party transactions, customs, tax incentives and previous tax inspections.

Particular attention should be given to businesses with unusually aggressive tax positions or significant transactions with related parties.

The review should examine not merely whether taxes have been paid, but whether the underlying declarations are substantively correct.

For example, a company may have timely filed all VAT returns while using invoices that are later challenged during a tax audit.

The resulting liability may emerge after the acquisition.

8. Limited Company Acquisitions Require Special Public-Debt Analysis

Foreign investors acquiring a Turkish limited liability company should pay particular attention to public receivables.

Article 35 of Law No. 6183 contains a specific liability framework under which limited company shareholders can, under the statutory conditions, be personally pursued in proportion to their shares for public receivables that cannot be collected from the company. Official Social Security Institution material also discusses this separate statutory liability regime for Ltd. Şti. shareholders.

This makes public-debt due diligence especially important when purchasing an existing limited company.

The buyer should therefore not assume that:

“the debt belongs to the company, so it can never affect the shareholder.”

The position of an ordinary passive A.Ş. shareholder differs from that of an Ltd. Şti. shareholder, although directors and legal representatives can have separate personal liability issues under tax and public receivables legislation.

9. Investigate Social Security and Payroll Liabilities

A company with employees may have significant exposure to the Turkish Social Security Institution, commonly known as SGK.

Potential issues include unpaid premiums, under-reported salaries, unregistered employees, incorrect use of employment incentives, workplace accident exposure and historical payroll irregularities.

These liabilities may be material even if the target currently has few employees.

A company that had 300 employees three years ago but only 20 employees today can still carry significant historical employment and SGK risks.

The due diligence should therefore include both current and historical payroll compliance.

10. Employee Liabilities Can Be Significant Hidden Liabilities

A share acquisition does not change the identity of the legal employer.

The target company remains the employer before and after closing.

Accordingly, accrued employee rights remain within the company.

The buyer should investigate employment agreements, salaries, bonuses, unused annual leave, severance exposure, notice pay, overtime, workplace policies, senior management contracts, non-compete arrangements, incentive plans and pending employee disputes.

One of the most important questions is whether the company’s accounts adequately provide for accrued employment liabilities.

For example, a company may have 150 long-serving employees and significant severance exposure that does not appear as an immediately payable debt.

A buyer who ignores this issue may overpay for the business.

11. Search for Litigation, Enforcement Proceedings and Arbitration

The target company’s dispute profile should be reviewed comprehensively.

The investigation should cover not only court proceedings but also enforcement proceedings, arbitration, administrative proceedings, tax disputes, employee cases and threatened claims.

The buyer should ask:

What is the maximum possible liability?

What is the probability of loss?

Has the company established accounting provisions?

Does insurance cover the claim?

Could the dispute affect an important licence or contract?

A company facing a relatively small lawsuit may present limited risk.

A company dependent on a regulatory licence that is currently being challenged may present an existential risk.

Litigation should therefore be evaluated qualitatively as well as financially.

12. Review Bank Loans and Financing Documents

Bank debt should be analysed beyond the outstanding loan balance.

The investor should review credit agreements, overdrafts, leasing arrangements, factoring facilities, foreign currency borrowing, guarantees, mortgages, pledges and letters of guarantee.

A particularly important issue is the change-of-control clause.

A financing agreement may provide that a change in company ownership gives the bank the right to accelerate the loan or require prior consent.

If the acquisition closes without obtaining required consent, the company may technically default immediately after the buyer takes control.

Bank consent should therefore be included as a closing condition where necessary.

13. Search for Undisclosed Guarantees and Contingent Liabilities

A company’s ordinary balance sheet may not reveal the full economic risk.

A target may have guaranteed liabilities of its shareholders, group companies, affiliates or customers.

The buyer should investigate:

corporate guarantees, surety arrangements, mortgages, pledges, avals, letters of guarantee and other security commitments.

These are particularly dangerous because they may not create an immediate payment obligation.

A guarantee becomes expensive only after another party defaults.

Therefore, contingent liabilities should be treated as a separate due diligence category rather than merely part of ordinary bank debt.

14. Review Material Commercial Contracts

The buyer is frequently paying for the target’s commercial relationships rather than its physical assets.

Accordingly, important contracts should be carefully reviewed.

These may include major customer agreements, supply agreements, distribution arrangements, franchise agreements, licences, leases, outsourcing arrangements, software agreements and long-term procurement contracts.

The buyer should determine whether each key agreement contains:

termination rights, change-of-control provisions, minimum purchase obligations, exclusivity, price adjustment clauses, penalties, automatic renewals or restrictions on assignment.

A target may generate 50% of its turnover from one customer.

If that customer can terminate the agreement immediately following the acquisition, the company’s valuation may need to change dramatically.

15. Investigate Related-Party Transactions

Closely held Turkish companies frequently conduct transactions with founders and related companies.

These transactions may involve shareholder loans, management fees, asset transfers, personal expenses, related-party sales or intercompany guarantees.

The buyer should identify whether the company is economically dependent on arrangements involving the seller.

For example, the target’s warehouse may belong personally to the seller and be leased to the company on favourable terms.

If the seller intends to terminate the lease after closing, the buyer may acquire the company but lose its operating premises.

Related-party arrangements should therefore be normalised before valuation.

16. Verify Real Estate, Machinery and Other Major Assets

If important assets form part of the business valuation, ownership must be verified.

For real estate, the investigation should examine title, mortgages, attachments, easements, zoning and occupancy status.

For machinery, vehicles and equipment, the buyer should confirm whether assets are owned outright or subject to leasing, finance or pledges.

Where the target has foreign capital, Turkish real estate acquisition rules can also become relevant in particular ownership structures. Invest in Türkiye notes that foreign-capital Turkish companies meeting specified ownership or management-control tests may be subject to additional procedures when acquiring Turkish real estate.

If real estate is strategically important to the target, this issue should be analysed during acquisition structuring.

17. Intellectual Property Due Diligence Is Essential for Technology and Consumer Businesses

For some businesses, intellectual property represents most of the company’s economic value.

The buyer should verify ownership of trademarks, patents, designs, software, domain names, databases, copyright and confidential know-how.

A common startup problem is that the founder personally owns the software or trademark even though the company uses it.

Another common issue occurs where freelancers developed software without assigning copyright and related rights properly to the company.

A buyer acquiring the shares does not automatically acquire assets that the company never owned.

Therefore, missing IP should normally be assigned to the target before closing or dealt with through a specific closing condition.

18. KVKK and Data Protection Must Be Included in Modern Due Diligence

For technology, healthcare, e-commerce, SaaS, financial services and consumer businesses, personal data compliance can be a major acquisition risk.

The Turkish Personal Data Protection Authority confirms that data controllers may have obligations concerning lawful processing, privacy notices, security measures, personal data inventories, retention and destruction policies and registration with VERBİS where applicable.

The buyer should investigate whether the target has:

proper privacy notices, valid processing grounds, appropriate employee and customer privacy documentation, lawful international data transfer mechanisms, processor contracts, security policies, breach procedures and accurate VERBİS records where registration is required.

VERBİS information must also be updated where registered information changes. The Authority states that changes in Registry records generally must be notified through VERBİS within seven days.

A historical data breach or unlawful transfer can remain a liability of the acquired company after closing.

19. Regulatory Licences Must Be Verified

If the target operates in a regulated sector, licences may be fundamental to the transaction.

Examples include financial services, insurance, payment services, energy, telecommunications, broadcasting, healthcare, aviation and certain transportation activities.

The buyer should confirm:

whether all necessary licences exist, whether they are valid, whether any investigation is pending and whether the acquisition itself requires regulatory approval.

Foreign investment in Turkey generally operates without a universal screening requirement, but special sector legislation can require prior consent for particular acquisitions. Official Invest in Türkiye legal guidance expressly recognises regulated-sector exceptions.

A Share Purchase Agreement should not permit closing before required regulatory approvals have been obtained.

20. Conduct a 2026 Competition Law Analysis

Larger acquisitions may require prior clearance from the Turkish Competition Authority.

Turkey substantially revised its merger-control thresholds in February 2026.

The Competition Authority announced that the previously applicable TRY 250 million individual threshold was increased to TRY 1 billion, the TRY 750 million Turkish turnover threshold was increased to TRY 3 billion, and the TRY 3 billion worldwide turnover threshold was increased to TRY 9 billion in the relevant tests.

The Authority subsequently updated its merger and acquisition guidelines in May 2026 to reflect the revised regime.

Importantly, merger-control analysis is not limited to acquisitions of more than 50%.

A minority investment may create joint control where the investor receives strategic veto rights over matters such as the budget, business plan or appointment of senior management.

Competition analysis should therefore review both the share percentage and the shareholders’ agreement.

If clearance is mandatory, obtaining it should be a condition precedent to closing.

21. Confirm Foreign Investment Reporting Obligations

Where a foreign investor acquires shares in the target, post-closing foreign direct investment reporting should also be considered.

Current official investment guidance identifies the FDI Share Transfer Data Form, Activity Information Form and FDI Capital Data Form as information submitted electronically through the E-TUYS platform.

Due diligence should determine whether the target already has foreign shareholders and whether its previous E-TUYS filings are complete.

Following closing, the parties should clearly allocate responsibility for updating foreign shareholding information.

Post-closing compliance is part of the acquisition process, not an optional administrative detail.

22. Environmental and Technical Due Diligence May Be Necessary

Legal due diligence alone may not be sufficient for manufacturing, energy, mining, chemical or industrial targets.

The investor may need specialist reviews concerning:

environmental permits, contamination, waste management, occupational health and safety, factory permits, emissions, environmental impact assessment requirements and technical compliance.

Historical environmental liabilities can be particularly serious because remediation costs may greatly exceed ordinary contractual claims.

Where the target owns or operates industrial property, environmental and technical due diligence should be integrated into the overall transaction process.

23. Review Insurance Coverage

Insurance due diligence can reveal whether major operational risks are adequately transferred to insurers.

Relevant policies may include:

property insurance, employer liability, product liability, professional liability, cyber insurance, directors’ and officers’ insurance, business interruption and construction-related policies.

The investor should examine policy limits, deductibles, exclusions, claims history and change-of-control provisions.

An ongoing lawsuit may appear manageable because the company has insurance, but coverage may be disputed or materially capped.

24. Examine Compliance, Anti-Bribery and Sanctions Risks

International investors should determine whether the target has conducted business with:

public authorities, state-owned companies, distributors in high-risk jurisdictions or sanctioned counterparties.

The review may need to examine gifts, commissions, agents, public tender relationships and intermediary arrangements.

For multinational acquirers, risks may arise not only under Turkish law but also under extraterritorial legislation applicable to the foreign buyer or its group.

Compliance diligence is particularly important where the target’s growth has historically depended heavily on intermediaries or public-sector contracts.

25. Review the Target’s Financial Distress and Capital Position

The buyer should assess whether the target is financially healthy.

Turkish corporate law contains specific rules concerning loss of capital and insolvency-related situations.

The review should examine equity, accumulated losses, capital adequacy, shareholder receivables, overdue liabilities and whether corporate organs have complied with applicable obligations where capital is impaired.

A business can have significant turnover while technically experiencing serious capital loss.

This may require immediate recapitalisation after closing.

26. What Should a Due Diligence Report Look Like?

A useful due diligence report should not simply reproduce documents.

Its purpose is to identify transaction risks and tell the purchaser what should be done about them.

A practical report will usually categorise issues by significance and explain the legal consequence, financial exposure and recommended contractual solution.

For example:

Issue: Pending tax audit concerning 2023–2024.

Risk: Unknown assessment after closing.

Recommended solution: Specific seller indemnity plus escrow retention.

Another example:

Issue: Main customer contract permits termination upon change of control.

Risk: Loss of approximately 35% of annual revenue.

Recommended solution: Obtain customer consent as a condition precedent.

This is far more useful than merely stating that “a customer agreement was reviewed.”

27. Due Diligence Findings Must Affect the Share Purchase Agreement

Due diligence is valuable only if its findings are converted into transaction protection.

The SPA should reflect discovered risks through mechanisms such as representations and warranties, specific indemnities, price adjustments, escrow, holdback, conditions precedent and termination rights.

For example, if the company has a known TRY 20 million tax dispute, the buyer may negotiate a specific tax indemnity.

If there is uncertainty about working capital, the parties may use a completion accounts mechanism.

If a regulatory licence requires approval, that approval may become a condition precedent.

If a shareholder loan must be repaid before closing, repayment may become a closing deliverable.

The contract should be built around the due diligence findings.

28. Why Seller Warranties Matter

Seller warranties are contractual statements concerning the target company.

Typical warranties may address:

ownership of shares, corporate records, accounts, taxes, employees, litigation, intellectual property, material contracts, licences, data protection and absence of undisclosed liabilities.

If a warranty is false, the purchaser may potentially claim damages subject to the terms of the SPA.

Warranties are particularly useful for risks that cannot be fully verified through documentary review.

However, warranties do not replace due diligence.

A seller promise is only as valuable as the purchaser’s ability to enforce it.

29. Use Specific Indemnities for Known Risks

Specific indemnities are particularly important when due diligence has already discovered a problem.

Suppose the target has an ongoing employee lawsuit with a potential exposure of TRY 8 million.

Instead of relying only on a general litigation warranty, the SPA may provide that the seller specifically indemnifies the purchaser or target against losses arising from that proceeding.

The same technique may be used for:

tax audits, SGK investigations, customs disputes, historical data breaches, environmental liabilities and identified customer claims.

Known risks should generally be addressed directly rather than buried inside general warranty language.

30. Consider Escrow or Purchase Price Holdback

A foreign buyer should consider whether part of the purchase price should remain in escrow after closing.

This is particularly important where:

the seller will leave Turkey, substantial warranty exposure exists, tax audits are ongoing or recovery against the seller may later be difficult.

For example, on a USD 10 million acquisition, the parties might agree that USD 1.5 million remains in escrow for an agreed claim period.

This gives the buyer a practical source of recovery if a qualifying claim arises.

Winning arbitration against an overseas seller is less useful if the seller has already dissipated the purchase price.

31. Conditions Precedent Can Prevent the Buyer From Acquiring a Broken Business

Important problems should often be fixed before closing.

Conditions precedent may include:

Competition Authority clearance, sector regulator approval, bank consent, customer consent, release of share pledges, repayment of shareholder loans, transfer of intellectual property, settlement of tax debts, capital increase or resignation of existing management.

The principle is simple:

Do not close first and hope the problem can be solved afterwards.

If a matter is essential to the value of the investment, completion should depend on its resolution.

32. Red Flags That Should Make a Buyer Reconsider the Transaction

Certain findings do not necessarily mean the transaction must be abandoned, but they require heightened caution.

Major red flags can include unreliable accounting records, unexplained shareholder receivables, missing corporate books, material tax audits, suspicious invoice patterns, undisclosed related-party payments, major employee claims, missing IP ownership, regulatory investigations, heavy dependence on one customer, significant guarantees for third-party debts and seller resistance to providing requested information.

Perhaps the most important warning sign is the seller repeatedly saying:

“This is not necessary. Just trust us.”

A legitimate M&A process normally involves extensive disclosure.

Refusal to provide basic corporate or financial documentation should itself be considered a due diligence finding.

33. Practical Example: Foreign Investor Buying a Turkish Manufacturing Company

Assume a European industrial group intends to acquire 100% of a Turkish manufacturing A.Ş. for EUR 15 million.

The initial financial statements look attractive.

Legal due diligence subsequently discovers that the factory land is mortgaged, the principal bank facility contains a change-of-control clause, the target has an unresolved VAT audit, 20 employees have filed overtime claims, one significant customer may terminate on change of control and an important trademark is personally registered in the founder’s name.

The buyer should not necessarily abandon the transaction.

Instead, the acquisition can be restructured.

The bank’s consent may become a condition precedent.

The founder may be required to transfer the trademark before closing.

The tax audit may be covered by a specific indemnity.

Part of the purchase price may remain in escrow.

The customer consent may become another condition to closing.

The purchase price may also be adjusted to reflect identified liabilities.

This is the true purpose of due diligence.

It does not merely determine whether the target is “good” or “bad.”

It provides the information necessary to price, restructure and protect the transaction.

Frequently Asked Questions About Company Due Diligence in Turkey

Is due diligence legally mandatory when buying a Turkish company?

There is no universal rule requiring every private purchaser to conduct a full legal due diligence investigation. However, it is strongly advisable because a share acquisition leaves historical liabilities inside the target company.

Can foreign investors buy Turkish companies?

Yes. Turkey’s FDI framework generally permits international investors to acquire shares under the same general rules applicable to domestic investors, subject to special sectoral restrictions.

What should legal due diligence cover?

A comprehensive review may cover corporate matters, shareholders, tax, SGK, employees, litigation, enforcement proceedings, bank debt, guarantees, contracts, IP, property, data protection, regulation, competition law and compliance.

Is a tax debt certificate enough?

No. A certificate may help identify existing payable liabilities, but it cannot necessarily eliminate exposure arising from a later tax audit relating to previous accounting periods.

Should SGK records be reviewed?

Yes. Historical social security liabilities can remain within the acquired company and should form part of the employment and public-debt review.

Is due diligence more important when buying an Ltd. Şti.?

It is particularly important because limited-company shareholders are subject to a specific statutory public-receivables liability regime under Article 35 of Law No. 6183.

Should contracts be checked for change-of-control clauses?

Yes. Important customers, lenders, suppliers and licensors may have termination or consent rights triggered by the acquisition.

Must Competition Authority approval be checked?

Yes for transactions capable of satisfying the merger-control tests. Turkey materially increased its notification thresholds in February 2026.

What are the current 2026 merger-control thresholds?

The 2026 amendments increased the relevant previously applicable TRY 250 million threshold to TRY 1 billion, the TRY 750 million threshold to TRY 3 billion and the TRY 3 billion worldwide threshold to TRY 9 billion in the corresponding tests. The complete transaction-specific analysis must still be carried out under Communiqué No. 2010/4.

Is KVKK due diligence necessary?

For companies processing personal data, yes. KVKK compliance may involve privacy notices, lawful processing, security measures, international transfers, data inventories and VERBİS obligations where applicable.

What happens after a foreign investor acquires the shares?

Foreign-invested companies should review E-TUYS reporting requirements, including share-transfer information.

Conclusion: Due Diligence Is the Most Important Protection Before Buying a Company in Turkey

Buying an existing Turkish company can provide a foreign investor with immediate access to employees, customers, licences, contracts, assets and an established market position.

But the same transaction also transfers economic exposure to the company’s history.

The central principle of a share acquisition is straightforward:

the target company remains the same company after closing.

Its assets remain.

Its contracts remain.

Its employees remain.

And its liabilities remain.

For this reason, a foreign investor should never decide to acquire a Turkish company solely on the basis of its revenue, EBITDA, customer list or seller’s representations.

A comprehensive Turkish M&A due diligence process should examine the target from multiple perspectives.

The buyer should verify its legal existence and share ownership.

Corporate records should be reconciled with the articles, share ledger and historical decisions.

Tax and SGK risks should be analysed.

Employee liabilities should be quantified.

Litigation and enforcement proceedings should be reviewed.

Bank loans, guarantees and security interests should be identified.

Important commercial contracts should be tested for termination and change-of-control provisions.

Intellectual property ownership should be confirmed.

KVKK compliance should be reviewed where personal data is material to the business.

Regulatory licences should be checked.

Larger transactions should undergo merger-control analysis under Turkey’s updated 2026 Competition Authority thresholds.

Foreign investors should also verify post-acquisition obligations, including E-TUYS foreign investment reporting.

For acquisitions taking place in 2026, there are additional current issues to check.

Existing Ltd. Şti. and A.Ş. targets that remain below Turkey’s increased minimum capital levels must generally raise their capital by 31 December 2026 to avoid the statutory dissolution consequence.

Likewise, corporate book administration should be reviewed in light of the Electronic Commercial Book System, which became mandatory for newly registered companies from 1 January 2026 in relation to the specified books.

Most importantly, due diligence findings should not remain confined to a legal report.

They should directly influence the commercial transaction.

A serious tax exposure may require a price reduction or tax indemnity.

A pending lawsuit may require escrow.

A missing licence may require a condition precedent.

A customer change-of-control clause may require customer consent.

A missing trademark may require IP transfer before closing.

An uncertain liability may justify purchase-price holdback.

A serious undisclosed problem may justify walking away from the acquisition entirely.

Therefore, the correct acquisition process is not simply:

agree price → sign agreement → transfer shares.

A professionally structured Turkish M&A transaction should instead follow the logic:

initial transaction structure → confidentiality agreement → information request → legal, tax and financial due diligence → risk assessment → valuation adjustment → SPA negotiation → warranties and indemnities → regulatory and Competition Authority analysis → conditions precedent → closing → corporate and E-TUYS updates → post-closing integration.

For foreign investors, due diligence is particularly important because the purchaser may not be familiar with Turkish corporate records, public liabilities, employment practices, tax administration or regulatory systems.

The cost of identifying a problem before closing is generally far lower than the cost of litigating over it after the purchase price has been paid.

The objective of company due diligence in Turkey should therefore not be merely to confirm that the company exists.

It should be to determine:

what the investor is really buying, what liabilities come with it, how those liabilities affect valuation, and how the buyer can be contractually protected if the risks materialise after closing.

A carefully conducted due diligence process can turn an uncertain acquisition into a properly priced and legally protected investment.

A transaction completed without adequate due diligence, by contrast, can result in the foreign investor discovering that the most expensive assets acquired were not the company’s factories, customers or contracts—but its hidden liabilities.

This article reflects Turkish legislation and official administrative guidance available as of August 2026. It is provided for general informational purposes only and does not constitute transaction-specific legal, tax, accounting, competition or investment advice. Every acquisition should be assessed according to the target company’s legal form, industry, financial history, ownership structure and the legislation applicable on the signing and closing dates.