Introduction: Why Do Turkey’s Double Taxation Treaties Matter for Foreign Investors? A foreign investor establishing a company, acquiring shares, lending money, licensing technology or providing services in Turkey can potentially face taxation in more than one country. A German company may pay tax in Germany while receiving dividends from a Turkish subsidiary. A Dutch investor […]
Introduction: How Are Dividends Paid to Foreign Shareholders Taxed in Turkey? Foreign investors establishing or acquiring companies in Turkey naturally focus on the profitability of the investment. However, earning a profit inside a Turkish company and transferring that profit to the foreign shareholder are two different stages from a Turkish tax perspective. A Turkish company […]
Introduction: Can a Turkish Company Transfer Its Profits to a Foreign Shareholder? Yes. A Turkish company may lawfully distribute profits to a shareholder located abroad and transfer the resulting dividend through the Turkish banking system. Turkey’s foreign direct investment legislation expressly protects this right. Article 3 of the Foreign Direct Investment Law provides that foreign […]
Introduction: Can a Foreign Shareholder Lend Money to a Turkish Company? Yes. A foreign individual or foreign company may, subject to Turkish foreign-exchange, tax, banking and corporate rules, finance a Turkish company through a shareholder loan rather than providing all of the funding as share capital. Shareholder loans are extremely common in international corporate structures. […]
Introduction: Can a Foreign Investor Bring Money From Abroad to Establish a Company in Turkey? Yes. A foreign individual or foreign company may transfer funds from abroad to establish, capitalise or finance a Turkish company. Turkey’s foreign direct investment regime is based on the principles of freedom to invest and equal treatment. Unless a special […]
Introduction: What Happens When a Foreign Investor and Turkish Business Partner Fall Out? A foreign investor may enter the Turkish market through a joint venture or by establishing a company together with a Turkish business partner. At the beginning of the relationship, the interests of the parties are usually aligned. The foreign investor may contribute: […]
Introduction: How Can a Foreign Shareholder Exit a Turkish Company? A foreign investor entering a Turkish company usually spends significant time negotiating how to invest. Far less attention is sometimes given to an equally important question: How will the investor eventually get out? An investment may end for many reasons. The company may become highly […]
Introduction: Can a Foreign Investor Have Veto and Control Rights in a Turkish Company? Yes. A foreign investor can negotiate significant management, veto and control rights when investing in a Turkish company. Foreign investors are generally subject to the same corporate-law framework as Turkish investors. Turkey’s foreign direct investment regime is based on equal treatment, […]
Introduction: Why Is a Shareholders’ Agreement So Important for Foreign Investors in Turkey? A foreign investor entering a Turkish company may spend weeks negotiating the investment amount and shareholding percentage while spending surprisingly little time determining what those shares actually allow the investor to control. This can be a serious mistake. Owning 40%, 49% or […]
Introduction: How Can a Foreign Investor Safely Start a Business with a Turkish Partner? Starting a company with a Turkish business partner can be one of the fastest ways for a foreign investor to enter the Turkish market. A local partner may contribute significant commercial value through local customers, distribution networks, regulatory experience, suppliers, employees, […]