Security for Costs in Turkey: What Foreign Claimants Need to Know

Quick answer: A foreign individual or foreign company bringing a lawsuit or starting enforcement proceedings in Turkey may be required to provide security for costs under Article 48 of Law No. 5718 on Private International and Procedural Law. The security is intended to cover procedural expenses and potential losses of the opposing party. This rule is not absolute: the Turkish court may exempt the foreign claimant when reciprocity exists between Turkey and the claimant’s home state. In practice, the first questions are the claimant’s nationality or place of incorporation, whether a treaty or reciprocal practice applies, the type of proceeding, and the amount and form of security the court considers appropriate. Foreign businesses should address the issue before filing because failure to provide ordered security can disrupt or delay the case.

Why Security for Costs Matters in Cross-Border Litigation

Foreign claimants often focus on the underlying contract, unpaid invoice or investment dispute and treat procedural security as a minor technical issue. In Turkey it can have practical consequences at the opening of the case. A claimant may have a strong claim on the merits but still need to satisfy a procedural order concerning security before the proceedings can move forward normally. The amount can affect litigation budgeting, especially in high-value commercial cases or where urgent provisional measures are also being considered.

Security for costs should be distinguished from court fees, expert fees, translation expenses and attorney fees. Those are separate categories. Security is a protective amount ordered because the claimant or enforcement creditor is foreign, subject to the statutory reciprocity exception. Paying a filing fee does not automatically satisfy a security order, and being represented by a Turkish lawyer does not by itself eliminate the rule.

The Legal Basis: Article 48 of Law No. 5718

Article 48 of the Turkish Private International Law statute applies to foreign natural persons and foreign legal persons who file a lawsuit, intervene in a lawsuit or initiate enforcement proceedings before Turkish authorities. It provides that security shall be furnished in an amount determined by the court to cover the expenses of the proceeding and possible loss or damage of the other party. The second paragraph authorizes the court to exempt the foreign person from security on the basis of reciprocity.

The wording is important for international companies. It expressly includes foreign legal persons, so the issue is not limited to tourists or individuals living abroad. A company incorporated in another state can encounter the security question when suing a Turkish company, pursuing a receivable or taking part in an existing lawsuit. Our guide on whether a foreign company can sue a Turkish company without setting up in Turkey explains the broader access-to-court framework.

What Does Reciprocity Mean?

Reciprocity means that the security rule cannot be examined solely by reading Article 48 in isolation. The court must consider whether Turkish claimants receive equivalent treatment in the foreign claimant’s country, or whether an international treaty provides an exemption. Reciprocity may therefore arise from treaty obligations, legislation or established practice, depending on the relevant legal relationship.

A foreign company should not assume that a visa-waiver arrangement, commercial treaty or general diplomatic relationship automatically answers the security question. The relevant inquiry is whether the applicable legal framework creates reciprocal treatment for litigation security. This can require review of bilateral or multilateral agreements and, where necessary, material showing the foreign state’s actual treatment of Turkish litigants.

The analysis is also country-specific. A company incorporated in one jurisdiction may qualify for an exemption while a company incorporated elsewhere may not. Corporate groups should therefore identify the actual claimant entity. The nationality of the ultimate shareholder is not necessarily the same as the legal nationality of the corporate claimant that appears in the case.

Who Can Be Required to Provide Security?

The core category consists of foreign natural persons and legal persons acting as claimants, interveners or enforcement creditors. A Turkish subsidiary is a Turkish legal person even if all of its shares are owned by foreign investors, while a foreign parent company incorporated abroad is a foreign legal person. That distinction can be decisive for Article 48.

A foreign defendant does not become subject to the rule merely because it is defending a case. Article 48 focuses on the foreign person who brings the proceeding, intervenes or initiates enforcement. Different security rules may arise under other procedural provisions in particular circumstances, so the position should not be generalized beyond the statutory basis being applied.

Does Article 48 Apply to Enforcement Proceedings?

Yes. The statute expressly refers not only to lawsuits but also to enforcement proceedings. This matters for foreign creditors who choose Turkish debt enforcement rather than first obtaining a court judgment. A foreign supplier attempting to collect a due invoice from a Turkish debtor may therefore need to examine security at the enforcement stage, not only if the dispute later becomes a court case.

The procedural strategy for an unpaid commercial receivable can include direct enforcement, litigation, arbitration or a combination of protective measures. Our article on recovering an unpaid invoice from a Turkish company describes the broader recovery routes. Security should be built into the budget whichever route is selected.

How Is the Amount of Security Determined?

Article 48 does not set one universal percentage for every foreign claimant. The amount is determined in the proceeding. That means foreign businesses should be cautious about websites or advisers that present a fixed security rate as though it applies mechanically to all claims. The value of the dispute, foreseeable procedural expenses, nature of the requested protection and circumstances of the case can influence the practical outcome.

The form of security can also matter. Depending on the court order and applicable procedural rules, security may be furnished in a legally acceptable form rather than simply transferred informally to the opposing party. The claimant should follow the wording of the order and procedural directions carefully. If the court sets a deadline, the foreign company should coordinate funding, banking and documentation early enough to avoid a preventable default.

Security and Interim Measures

Cross-border cases often involve a second security question when the claimant seeks an interim measure such as preliminary attachment or an injunction. The legal basis and purpose of security for a provisional measure can differ from the foreign-claimant security under Article 48. One should not assume that satisfying one security requirement automatically satisfies another.

This is particularly important when the debtor appears to be moving assets. A foreign creditor may need speed, yet security, translation and corporate authorization documents can slow implementation if they were not prepared in advance. Our guide to asset freezing before litigation in Turkey discusses provisional protection from the recovery perspective.

What Documents Help Establish an Exemption?

The exact evidence depends on the country and legal basis relied upon. A claimant may need treaty text, an official statement, foreign statutory material or material showing reciprocal judicial practice. Documents issued abroad may require proper legalization and Turkish translation before they can be relied on effectively in a Turkish proceeding.

For a corporate claimant, documents showing incorporation and representation authority should be prepared separately from documents addressing reciprocity. A certificate of incorporation or registry extract proves the company’s existence; it does not by itself prove that Turkish claimants are exempt from security in that jurisdiction.

Can Security for Costs Be Challenged?

A foreign claimant can raise legal arguments concerning whether Article 48 applies, whether reciprocity justifies exemption, whether the security amount is proportionate and whether the court has correctly characterized the claimant’s legal status. The correct procedural route depends on the nature of the order and stage of the proceeding. The point should be raised promptly rather than ignored.

A commercial claimant should also assess whether disputing the security is economically sensible. In some cases a focused reciprocity submission can resolve the issue quickly. In others, prolonged procedural fighting over security may cost more than complying with a reasonable order while preserving objections. Litigation strategy should consider both legal principle and commercial objective.

Security for Costs and Mandatory Mediation

Mandatory commercial mediation and Article 48 address different procedural issues. Where Turkish law requires pre-litigation mediation for a commercial monetary claim, the foreign company must normally complete that process before filing. Security for costs is then addressed in the court or enforcement proceeding as applicable. Completing mediation does not create an Article 48 exemption.

Foreign businesses should therefore use a procedural checklist: forum clause, limitation period, mediation requirement, corporate authority, translations, security, interim measures and enforcement assets. Missing one item can undermine an otherwise strong claim. The choice between arbitration and Turkish courts should likewise be made before procedural costs are committed.

Common Mistakes

The first mistake is assuming that every foreign claimant must always provide security. The reciprocity exception is part of the statute and should be investigated. The opposite mistake is assuming that a well-known treaty automatically grants an exemption without checking its scope. A third mistake is confusing a foreign-owned Turkish company with a foreign legal person.

Another common error is leaving the issue until after filing. Cross-border corporate documents can take time to obtain, apostille and translate. If the claimant expects a security dispute, the supporting legal material should be assembled with the originating documents. This is especially important where a provisional measure or limitation deadline creates urgency.

Frequently Asked Questions

Is there a fixed percentage for security for costs in Turkey?

No single statutory percentage applies to every Article 48 case. The amount is determined in the proceeding, and the relevant court order should be reviewed.

Does every foreign company have to pay security?

No. Article 48 contains a reciprocity-based exemption. Whether it applies depends on the claimant’s state and the applicable treaty, law or practice.

Does a Turkish company owned by foreigners count as a foreign legal person?

Normally the company’s own legal nationality and incorporation status are relevant. A Turkish-incorporated company is not transformed into a foreign legal person merely because its shareholders are foreign.

Can security arise in debt enforcement as well as lawsuits?

Yes. Article 48 expressly includes enforcement proceedings initiated by foreign persons.

Is security the same as court fees?

No. Court fees and procedural expenses are separate. Security is a distinct protective requirement.

Can a treaty remove the security requirement?

A treaty may establish reciprocal exemption, depending on its wording and application. The specific treaty must be reviewed rather than assumed.

Can security delay an urgent asset-freezing application?

It can affect timing if the claimant is unprepared. Security for a provisional measure may also arise under a separate legal basis, so both issues should be planned together.

Should reciprocity be researched before filing?

Yes. For a foreign claimant, it is efficient to address the issue during the initial jurisdiction and procedure review.

Conclusion

Security for costs is a predictable but sometimes overlooked feature of cross-border proceedings in Turkey. Article 48 of Law No. 5718 establishes the basic rule for foreign claimants and enforcement creditors while allowing exemption on reciprocity grounds. The practical outcome depends on the identity of the claimant, its country of incorporation or nationality, the legal basis for reciprocal treatment and the procedural order issued in the case.

For international companies, the safest approach is to include security in the pre-filing analysis together with jurisdiction, mediation, evidence, corporate authority and enforcement strategy. A case-specific review can prevent a technical issue from becoming an avoidable obstacle to recovery.

This article is for general information and is not legal advice for a specific dispute.