SEO Title: Buying a Company in Türkiye: Legal Due Diligence Guide for Foreign Investors

Meta Description: Planning to acquire a Turkish company? Learn what foreign investors should check before buying shares in Türkiye, including debts, taxes, litigation, ownership, contracts, IP, employees and regulatory approvals.

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Buying an existing company in Türkiye can be significantly faster than establishing a new business from the ground up. An acquisition may provide immediate access to customers, employees, licenses, contracts, technology, suppliers, distribution networks and an established market presence.

However, purchasing a Turkish company also means potentially purchasing its history.

A company may have unpaid taxes, employee claims, pending lawsuits, undisclosed loans, guarantees, intellectual property problems, regulatory violations or contractual obligations that are not immediately visible from its balance sheet.

For this reason, a foreign investor should never treat the acquisition of shares in a Turkish company as merely a commercial negotiation over price.

The transaction should be approached as a combination of legal due diligence, financial due diligence, tax review, transaction structuring and contractual risk allocation.

This guide explains the principal legal matters foreign investors should examine before acquiring a company in Türkiye.

Can a Foreigner Buy a Turkish Company?

As a general rule, yes.

Türkiye’s Foreign Direct Investment Law is based on freedom of investment and equal treatment. Unless a special law provides otherwise, foreign investors may make direct investments in Türkiye and are generally subject to the same treatment as domestic investors. The legislation expressly recognizes share acquisitions in companies established in Türkiye as a form of foreign direct investment.

Official investment guidance also confirms that the conditions applicable to the establishment of businesses and the transfer of shares generally apply equally to domestic and international investors.

Therefore, a foreign individual or foreign company can generally acquire part or all of the shares of a Turkish company without being required merely because of its foreign status to have a Turkish partner.

The position can nevertheless be different in regulated sectors. Banking, payment services, insurance, financial services, crypto assets, energy, telecommunications and certain other activities may involve licensing, notification, shareholding or regulatory approval requirements.

The first legal question should therefore not simply be:

“Can a foreigner buy this company?”

It should be:

“Can this particular investor acquire this particular company in this particular sector under the proposed transaction structure?”

1. Determine Whether You Are Buying Shares or Assets

One of the first decisions is whether the investor will acquire the shares of the company or selected assets and business operations.

The distinction can fundamentally change the investor’s risk.

In a share acquisition, the company itself normally continues to exist. Its assets, contracts, employees, receivables, debts and historical liabilities remain inside the same legal entity. The shareholder changes, but the company does not become a new company.

This means that historical problems may remain with the target after closing.

For example, if a company has an undiscovered tax liability relating to a period before the acquisition, buying the shares does not automatically eliminate that liability.

The same principle can apply to employee claims, contractual disputes, regulatory penalties and litigation.

An asset purchase may enable the investor to acquire selected assets while leaving certain liabilities behind, but an asset transaction raises its own questions concerning transfer of contracts, employees, licenses, permits, real estate, intellectual property and taxes.

The legal and tax consequences of both alternatives should therefore be compared before the transaction structure is finalized.

2. Verify That the Seller Actually Owns the Shares

A foreign investor should never assume that a person presenting himself as the owner of a company legally owns the percentage he claims.

Corporate ownership must be verified through the company’s documentation.

The review should cover the articles of association, trade registry records, Trade Registry Gazette announcements, share ledger, share certificates where applicable, previous share transfer documents, capital increases, shareholder resolutions and agreements granting third parties rights over shares.

Particular attention should be paid to whether the shares are pledged, subject to usufruct rights, subject to purchase options or affected by rights of first refusal, pre-emption or contractual transfer restrictions.

The legal mechanism of transferring shares also depends on the type and structure of the company.

For example, the Turkish Commercial Code contains different rules for joint stock companies and limited liability companies.

The Ministry of Trade explains that limited liability company share transfers generally involve a written share transfer agreement with notarized signatures and, unless otherwise provided by the articles of association, approval of the shareholders’ general assembly.

Joint stock company shares operate under a different legal framework. Registered shares are generally transferable unless transfer restrictions arise from law or the articles of association. Bearer shares are also subject to the current Central Registry Agency notification regime.

Therefore, a buyer should determine the exact type of shares being acquired and verify that the transfer procedure is legally effective.

3. Check the Company’s Entire Corporate History

Reviewing the current ownership structure alone is not enough.

A company may currently appear perfectly organized while earlier corporate decisions were defective.

The legal due diligence should examine important historical events such as incorporation, amendments to the articles of association, capital increases and reductions, previous acquisitions, share transfers, mergers, changes in management and significant shareholder resolutions.

The buyer should also establish who has legal authority to represent the company.

A transaction signed by someone without proper authority may later create enforceability problems.

For joint stock companies, particular attention should be given to the board of directors and representation authorities. In limited companies, the manager or board of managers and the company’s registered representation structure should be reviewed.

MERSİS is Türkiye’s central registry infrastructure for commercial registry processes, and companies’ registry records form an important starting point for the corporate review.

Registry information, however, should not be treated as a complete substitute for reviewing the company’s internal books and transaction documents.

4. Do Not Buy a Company Without Checking Its Tax Position

Tax risk can become one of the largest hidden liabilities in an acquisition.

A company may have declared profitable operations while failing to comply correctly with VAT, withholding, corporate tax, payroll or other tax obligations.

The buyer should examine the company’s tax filings, tax payment history, ongoing tax inspections, tax disputes, tax restructuring arrangements and significant transactions with shareholders or affiliated companies.

Special attention should be given to aggressive tax structures and unexplained accounting entries.

A buyer should also determine whether the company has received significant payments from shareholders and whether these amounts represent capital contributions, shareholder loans or another form of financing.

The distinction may affect both the company’s liabilities and the acquisition price.

Limited Liability Companies Require Particular Attention

Foreign investors buying shares in a Turkish limited liability company should understand the special rules governing certain public debts.

Under Article 35 of Law No. 6183, limited company shareholders may be directly responsible, in proportion to their shareholding, for public receivables that cannot be fully or partially collected from the company or are understood to be uncollectible.

More importantly for acquisitions, the official tax collection rules provide that where a limited company share is transferred, the transferor and transferee may be jointly liable, within the statutory framework, for public receivables relating to the period before the transfer.

This makes tax and public-debt due diligence particularly important when buying a Turkish limited liability company.

A buyer should not simply accept a contractual statement from the seller that “the company has no tax debt.”

The position should be investigated and appropriate warranties, indemnification provisions and closing protections should be included in the transaction documents.

5. Check Social Security and Employment Liabilities

A business may employ fifty people and appear profitable while carrying significant hidden employment exposure.

The investor should examine employment contracts, payroll records, social security registrations, salary payments, overtime practices, unused annual leave, bonuses, termination procedures and disputes with former employees.

Potential severance and notice liabilities should also be understood.

Particular attention is required where individuals described as “consultants” or “freelancers” effectively work as employees.

A contractual label does not necessarily determine the legal characterization of the working relationship.

Key management and technical employees should receive separate attention.

If the acquisition is being made primarily because of a company’s engineering team, client relationships or founders, the investor must understand whether those people are legally committed to remain after closing.

A company worth millions because of three key employees may lose a significant part of its commercial value if those individuals can leave immediately after the acquisition.

6. Search for Litigation and Enforcement Proceedings

A seller’s statement that “there are no important lawsuits” should never replace an independent legal review.

The target company’s litigation exposure should be investigated.

Relevant risks can include commercial lawsuits, employee claims, debt collection proceedings, consumer disputes, tax proceedings, administrative proceedings, intellectual property cases and criminal investigations relating to company activities or managers.

Pending enforcement proceedings can be particularly significant.

A company may have bank accounts or assets subject to attachment, or creditors may already have initiated enforcement measures.

It is also important to request information about threatened claims, not only lawsuits that have already been filed.

A major customer may have issued a formal notice claiming substantial damages even though no lawsuit has yet started.

That risk still matters to the buyer.

7. Identify All Bank Loans and Financing Obligations

Financial statements should be compared against actual financing agreements.

The investor should determine whether the target has bank loans, shareholder loans, convertible financing, factoring arrangements, leasing agreements, credit facilities or other financial obligations.

The review should also ask whether the company has granted guarantees for third parties.

This is especially important in family-owned businesses and corporate groups.

A profitable company may have guaranteed the debts of another company controlled by the seller.

The target may therefore be exposed to substantial liability even though the borrowed money never entered the target company’s accounts.

The buyer should investigate guarantees, sureties, mortgages, share pledges, commercial enterprise pledges and other security interests.

8. Review Related-Party Transactions

Transactions between the target company and its shareholders, directors, founders, relatives or affiliated companies deserve careful examination.

Consider a company that pays a substantial monthly “consultancy fee” to another company controlled by the seller.

The buyer must determine whether the service is genuine, whether the pricing is commercially reasonable and whether the arrangement will continue after the acquisition.

Other warning signs may include company-owned property being used personally by shareholders, company funds being transferred to related parties, loans granted to directors or sales conducted through another company owned by the founder.

Related-party transactions can affect profitability, tax exposure and the true value of the business.

9. Verify Ownership of Real Estate and Valuable Assets

If the valuation depends substantially on real estate, vehicles, machinery or other physical assets, ownership should be independently verified.

A company showing a factory on its balance sheet may not necessarily own the land on which it operates.

The property may be leased from the seller personally or from a related company.

The investor should understand mortgages, attachments, usufruct rights, leases and other encumbrances affecting important property.

The same principle applies to machinery.

Equipment may be leased or financed and therefore may not be freely transferable.

Physical possession does not necessarily mean legal ownership.

10. Check Intellectual Property Before Paying for Goodwill

For technology, manufacturing, consumer products and brand-driven companies, intellectual property may form a significant portion of the purchase price.

The buyer should verify ownership of trademarks, patents, software, industrial designs, domain names, databases and commercially important know-how.

One common problem is that a trademark is registered personally in the name of the founder rather than the target company.

Another is that software was developed by an external developer without a sufficient intellectual property assignment agreement.

In such situations, the company may use an asset operationally without owning all relevant rights.

The issue becomes particularly serious when valuation is based on that technology or brand.

The investor may require intellectual property to be transferred to the target before closing.

11. Read the Company’s Important Contracts

Revenue shown in financial statements may depend on contracts that can disappear immediately after the acquisition.

Material customer, supplier, distributor, franchise, licensing, SaaS, lease and partnership agreements should therefore be reviewed.

One particularly important provision is the change-of-control clause.

A contract may permit the counterparty to terminate the agreement if a majority of the company’s shares are sold.

For example, assume that the target generates 40% of its revenue from a single international customer.

If that customer agreement allows termination upon a change of ownership, the acquisition itself may place the company’s largest source of revenue at risk.

The buyer should determine whether third-party consent is required before closing.

12. Examine Licenses and Regulatory Permissions

Not every authorization automatically survives a change in ownership.

The investor should identify all permits, registrations, licenses and regulatory approvals necessary for the target’s business.

This is especially important in regulated sectors such as financial services, payment services, insurance, energy, healthcare, telecommunications, transportation and crypto assets.

The buyer should determine whether the acquisition requires regulatory notification, prior consent or approval.

If a company operates without a required authorization, the problem can be significantly more serious than an ordinary contractual dispute.

The investor may be acquiring a business whose core activity cannot legally continue in its existing form.

13. Check Competition Authority Approval Before Closing

Larger acquisitions may require notification to the Turkish Competition Authority.

Türkiye’s merger-control rules were updated in February 2026. The Competition Authority announced increased turnover thresholds: the relevant individual threshold was raised from TRY 250 million to TRY 1 billion, the aggregate Türkiye turnover threshold from TRY 750 million to TRY 3 billion, and the worldwide turnover threshold from TRY 3 billion to TRY 9 billion.

The analysis is not based solely on the purchase price.

The turnover of the transaction parties, control structure and characteristics of the transaction must be examined under the applicable rules.

Technology companies require particular attention because Turkish merger-control legislation has specific rules concerning certain technology undertakings.

Where notification is required, the transaction should be structured so that closing does not occur before the necessary regulatory clearance.

14. Investigate Personal Data and KVKK Compliance

A company that has accumulated a large customer database may consider that database a major commercial asset.

However, personal data is not simply an asset that can be used without legal limitations.

The buyer should assess the company’s compliance with Türkiye’s Personal Data Protection Law, commonly known as the KVKK.

The review may include privacy notices, legal grounds for processing, international data transfers, cookies, marketing consent, processors, cybersecurity practices and data breach procedures.

This becomes particularly important for companies operating in healthcare, fintech, artificial intelligence, SaaS and digital advertising.

If the target has systematically collected or transferred personal data unlawfully for years, an acquisition does not automatically erase the compliance problem.

15. Check Whether the Company Is Dependent on One Founder

Some acquisitions look like company acquisitions but are commercially closer to buying one person’s relationships and know-how.

Ask what happens if the founder leaves the day after the acquisition.

Can customers leave with the founder?

Does the founder personally control the domain names?

Are supplier relationships dependent on him?

Does he possess important know-how that was never documented?

Does he have access to source code and passwords?

Can he establish a competing company?

These questions influence transaction documents.

Depending on the circumstances, the buyer may need non-compete obligations, confidentiality provisions, transitional services, founder employment arrangements, deferred payments or earn-out mechanisms.

16. Check Whether the Financial Statements Reflect Reality

Legal and financial due diligence should be coordinated.

The buyer should investigate whether revenue is recurring, whether receivables are collectible and whether transactions are conducted at arm’s length.

A company may show significant receivables on its balance sheet while having almost no realistic ability to collect them.

A large receivable from a company controlled by the seller may deserve a substantial discount when calculating enterprise value.

Likewise, recurring income should be distinguished from one-off revenue.

The legal team can assist by reviewing the contracts underlying important revenue and receivable items.

17. Check Customer Concentration Risk

A company with TRY 100 million in annual revenue may appear attractive.

But the commercial picture changes dramatically if TRY 70 million comes from one customer whose contract expires in three months.

Customer concentration should therefore be combined with contract review.

The buyer should determine whether key customers can terminate for convenience, whether contracts automatically renew, whether pricing is fixed and whether ownership changes trigger termination rights.

A business is not worth the same amount if the majority of its revenue can legally disappear shortly after closing.

18. Understand Why the Seller Is Selling

The seller’s reason for exiting is not merely a commercial question.

It can identify legal risks.

Is the founder retiring?

Is the company unable to refinance debt?

Has a key customer threatened litigation?

Is a regulatory investigation expected?

Are shareholders fighting?

Has an important license renewal become problematic?

The buyer’s advisers should compare what the seller says with what the documents show.

Unexpected inconsistencies require further investigation.

19. Determine Whether the Purchase Price Should Be Paid Immediately

A foreign investor does not always have to transfer the full purchase price to the seller on the closing date.

Where due diligence identifies risks, payment structure can become a powerful form of protection.

Part of the price may be deferred.

An escrow arrangement may be used.

Part of the consideration may depend on future performance.

Specific amounts may be retained against tax, litigation or regulatory exposure.

An earn-out may link part of the price to revenue, EBITDA, customer retention or other agreed metrics.

The appropriate mechanism depends on the transaction.

The important point is that risk discovered during due diligence should influence how and when the purchase price is paid.

20. Use Representations and Warranties

The Share Purchase Agreement should contain detailed representations and warranties appropriate to the business.

A seller may warrant that the company properly owns its assets, has disclosed all material litigation, has paid its taxes, has no undisclosed borrowing, owns its intellectual property and has complied with material contracts and legislation.

These provisions are not simply formal language.

They determine who bears the financial consequences if information provided during the acquisition turns out to be false or incomplete.

Generic warranties copied from another transaction can leave important risks uncovered.

The warranties should reflect the findings of due diligence.

21. Negotiate Specific Indemnities for Identified Problems

A warranty addresses a general factual statement.

A specific indemnity can be more appropriate where a particular risk has already been identified.

Suppose due diligence reveals an ongoing tax investigation covering the three years before acquisition.

Instead of relying only on a general tax warranty, the buyer may negotiate a specific contractual mechanism requiring the seller to compensate the buyer for liabilities resulting from that investigation.

Similar arrangements may be appropriate for known litigation, employee claims, intellectual property disputes or regulatory issues.

22. Consider Escrow and Holdback Arrangements

A contractual right to claim damages is useful only if the seller can actually pay.

If the entire purchase price is immediately transferred abroad or distributed among several sellers, enforcing an indemnification claim later may be difficult.

A buyer may therefore negotiate for part of the consideration to remain in escrow or to be withheld for an agreed period.

The amount and duration should reflect identified risks.

This is particularly relevant where sellers will have limited assets remaining in Türkiye after the transaction.

23. Carefully Draft the Conditions Precedent

Certain problems should be solved before the acquisition closes rather than compensated for afterwards.

For example, closing may be conditional upon regulatory approval, Competition Authority clearance, transfer of intellectual property, release of a share pledge, repayment of shareholder loans, consent from a major customer or settlement of identified litigation.

If the condition is commercially fundamental, the investor should not rely simply on a promise that it will be solved after closing.

24. Pay Attention to Foreign Investor Documentation

Where the buyer is a foreign company, Turkish corporate and registry procedures may require corporate documents issued abroad.

Depending on the document and transaction, this may involve apostille or consular legalization, certified translations and Turkish notarization.

Official investment guidance notes that foreign corporate documentation required for company procedures may need appropriate certification and official Turkish translations.

Preparing these documents early can prevent closing delays.

Foreign buyers should therefore coordinate corporate approvals and powers of attorney well before the scheduled closing date.

25. Do Not Confuse Signing With Closing

Signing a Share Purchase Agreement does not necessarily mean that the acquisition should immediately be completed.

Many transactions contain a period between signing and closing.

During this period, the parties may obtain regulatory approvals, satisfy conditions precedent, secure third-party consents or complete corporate restructuring.

At closing, shares and purchase price are transferred subject to the agreed mechanics.

The transaction documents should clearly specify what must happen simultaneously and what evidence must be delivered.

What Are the Biggest Red Flags When Buying a Turkish Company?

A foreign investor should be particularly cautious where ownership records do not match the seller’s statements, material tax or social security debts are unexplained, the company has guaranteed related-party debts, important intellectual property is owned personally by founders, a major part of revenue depends on one customer, regulatory licenses are uncertain, material litigation was disclosed only late in negotiations, accounting records contain significant related-party receivables, employees have substantial unpaid entitlements, or the seller demands full payment before closing conditions are satisfied.

None of these issues automatically means that a transaction must be abandoned.

Some can be corrected.

Others may justify a lower purchase price.

Some may require specific indemnities, escrow arrangements or conditions precedent.

In serious cases, the correct commercial decision may be not to proceed with the acquisition at all.

Share Purchase or Asset Purchase: Which Is Safer in Türkiye?

There is no universally correct answer.

A share purchase may be commercially attractive because the business continues within the same company. Contracts, employees, licenses and operational assets generally remain within that entity, subject to specific change-of-control provisions and regulatory rules.

The disadvantage is that historical company liabilities generally remain within the company.

An asset purchase may provide greater control over which assets are acquired, but transferring a functioning business piece by piece can be considerably more complicated.

Contracts may require consent, licenses may not be transferable and employee-transfer issues may arise.

A legal and tax comparison should therefore be completed before deciding on transaction structure.

Can a Foreign Investor Buy 100% of a Turkish Company?

As a general principle, foreign investors are permitted to make direct investments in Türkiye and are subject to equal treatment with domestic investors unless special legislation provides otherwise.

Accordingly, a foreign investor can generally acquire 100% of an ordinary Turkish joint stock or limited liability company.

Sector-specific restrictions, licensing requirements and regulatory approvals must nevertheless be reviewed separately.

Is the Buyer Responsible for the Company’s Old Debts?

If an investor purchases shares, the company remains the same legal entity.

Accordingly, its existing contractual, tax, employment and other liabilities generally remain liabilities of the company after the transaction.

The buyer is purchasing ownership of an entity containing both assets and liabilities.

There are also specific statutory rules that may create additional exposure in particular situations. Limited liability company acquisitions require special examination of public debt rules under Law No. 6183.

This is one of the main reasons why comprehensive due diligence is essential.

How Long Does a Company Acquisition in Türkiye Take?

There is no standard timeframe.

A straightforward acquisition of a small private company with clean corporate records may be completed relatively efficiently.

A transaction may take substantially longer where it involves regulatory approvals, competition clearance, multiple shareholders, international financing, extensive due diligence, restructuring or significant identified risks.

The quality and completeness of the target company’s data room can also materially affect the timeline.

Should Foreign Investors Hire a Turkish M&A Lawyer?

For a material acquisition, local Turkish counsel can assist with matters that are difficult to assess solely from financial information.

The work typically includes investigation of corporate ownership, share transfer mechanics, tax and public debt risks, litigation, enforcement proceedings, employment exposure, intellectual property, material contracts, regulatory permissions, Competition Authority issues, transaction documents and closing procedures.

A lawyer acting for the buyer should not merely confirm that documents exist.

The purpose of the review is to determine:

What exactly is the investor buying?

What liabilities already exist inside the company?

What could reduce the company’s value after closing?

Which risks can be eliminated before closing?

Which risks should remain with the seller under the purchase agreement?

Conclusion

Buying an established Turkish company can be an efficient way for a foreign investor to enter the Turkish market, but acquiring shares without proper investigation can expose the investor to liabilities created years before the acquisition.

A professionally structured transaction should therefore begin with corporate, legal, financial and tax due diligence and should end with carefully coordinated transaction documents and closing procedures.

The purchase price alone should never be the investor’s main focus.

The more important question is:

What is actually inside the company being purchased?

A business worth EUR 10 million commercially may be worth considerably less if it carries major tax liabilities, ownership disputes, employee claims, unsecured guarantees, regulatory problems or intellectual property defects.

Effective due diligence allows the investor to identify those issues while there is still an opportunity to renegotiate the price, require corrective action, obtain contractual protection or walk away from the transaction.

For foreign investors acquiring businesses in Türkiye, legal due diligence should therefore be viewed not as an administrative formality, but as one of the most important parts of the investment itself.

This article provides general information regarding Turkish law and does not constitute legal advice. Corporate acquisitions should be reviewed according to the specific target company, sector, transaction structure and circumstances of the parties.