A handy collection of Turkish law tidbits.


Rights of Foreign Investors in General

Turkey is a civil law jurisdiction and has modeled a considerable portion of its laws (including data privacy and competition) after EU legislation. Accordingly, foreign investors accustomed to operating in continental Europe will find many, if not most, aspects of Turkish law familiar.

As an overarching theme, there are no general restrictions on foreign investment, or foreign ownership of shares or fund partnership interests in Turkey. With very limited exceptions, foreign investors are treated in the same manner as domestic investors under the law. Accordingly, a company partially or fully owned or controlled by foreign shareholders has the same legal standing and rights as a company owned or controlled by domestic shareholders. Only certain key sectors have certain restrictions approval requirements for foreign investment.

Similarly, subject to customary KYC and AML procedures, which also apply to domestic investors, there is no restriction on foreign persons investing in regulated investment funds, or for a fund to be subscribed to exclusively by foreign partners.

Subject to any potential taxes or withholding requirements, depending on the jurisdictions involved, Turkish law does not impose general restrictions on the repatriation of profits or fund distributions.

Transaction Structures

A typical private M&A transaction or fund investment process in Turkey follows customary international practices, and documentation is generally modelled after UK and US precedents in style and content both for direct foreign investments and domestic investments (including through local funds).

Sellers and founders typically give customary representations, warranties and indemnities to buyers and investors, consistent with international norms in form and substance. Turkish law will also normally provide the buyer/investor with certain implied representations and warranties.

Provisions such as such as tag-along rights, drag-along rights, rights of first offer and refusal, put/call options, anti-dilution rights and liquidation preferences are ordinarily included in shareholders’ agreements although as an emerging market the use of and disputes over such rights (and consequently the outcome of such disputes) have thus far been more limited in Turkey compared to more developed jurisdictions. Furthermore, most agreements include arbitration clauses, often under the rules of the Istanbul Arbitration Centre, an arbitral body created by statute and whose decisions are readily enforceable.

In recent years, it has become more common for sellers to hire an M&A adviser, prepare information memoranda for prospective buyers and, in some instances, undertake vendor due diligence.

Non-compete and non-solicitation clauses are common post-closing covenants made by sellers and founders. Both types of clauses will normally be upheld by Turkish courts so long as they are of a reasonable geographical, sectoral and temporal scope.

Please see our overviews of private M&A transactions, public M&A transactions and private equity transactions in Turkey.

Intellectual Property Rights

It is possible for Turkish companies to own the economic rights to intellectual property created by their employees and consultants. It is also statutorily possible to protect such rights against infringement (including theft of trade secrets) by third parties.

Subject to specific legislation such as data privacy and bank laws, Turkish law allows companies to store source codes and other intellectual property outside of Turkey and/or sell/license such rights to foreign entities.

Corporate Forms

Among the various corporate forms available in Turkey, the following two are predominantly used:

– joint stock company (anonim şirket)
– limited company (limited şirket)

Foreign entities and individuals are free to establish both joint stock and limited companies, and generally speaking no authorization or additional capital contribution requirements apply to foreign shareholders.1

Due to certain Certain key differences between joint stock and limited companies are summarized in the following table:

Joint Stock Company Limited Company
Liability of shareholders Limited to share capital Limited to share capital2
Shareholders Minimum one shareholder (Turkish or foreign real and/or legal persons may be shareholders) Minimum one shareholder (Turkish or foreign real and/or legal persons may be shareholders)

Maximum of 50 shareholders

Minimum total capital TRY 50,000 TRY 10,000
Management3 Board of directors Managers (at least one of which must be a shareholder)
Convention of general assembly of shareholders Must be held annually Must be held annually


Both joint stock companies and limited companies are free to choose any trade name, provided that:

– such name includes an indication of the corporate purpose;
– such name includes an indication of the corporate form; and
– prior permission is obtained where one or more of the words “Türk” (Turkish), “Türkiye” (Turkey), “Cumhuriyet” (republic) or “Milli” (national) are to be included in the corporate name.4

In principle, the corporate name must be in Turkish. However, foreign words may also be included in the corporate name, provided that:

– (the use of) such words are not contrary to law, or national, cultural or historical interests; and
– the identifying name or trademark of the goods or services offered by the company is in a foreign language, or the company has foreign shareholders.

Tax Numbers

For both joint stock companies and limited companies, shareholders and/or administrators who are foreign persons must obtain a “potential tax identification number” from the relevant tax office or online prior to incorporation of the company. Failure to obtain a potential tax identification number before incorporation will prevent the incorporation. Obtaining this number does not by itself make the relevant person a Turkish taxpayer.

Liaison Offices

It is also possible for foreign companies to establish liaison offices in Turkey for limited activities. The primary rule applicable to liaison offices is that they cannot engage in commercial activities in Turkey. Generally speaking, any activity that generates revenue is considered to be a “commercial activity”.5 Accordingly, liaison offices are limited to non-revenue generating activities such as market research, supervision of suppliers and communications with the parent company about the market.

Liaison offices will be granted an operation permit of up to three years upon first approval. Extensions may be granted by taking into consideration various factors such as the types and scope of activities, plans for the extension period and the number of employees. However, permits accorded to offices engaged in certain types of activities are not subject to extension. The determined extension periods vary accordingly to the scope of activities that the liaison office is planning to do in Turkey. In any case, there are maximum extension periods for each specified liaison office category (i.e., type of activity conducted).

1 Certain sectors (e.g., financial services) may, however, be subject to requirements and permissions.
2 The managers and shareholders of the limited companies may under certain circumstances be responsible for public receivables (e.g., taxes) which are not fully or partially collected. However, in joint stock companies, only board members have such potential liability, not the shareholders.
3 No citizenship or residency requirements apply to any members of management.
4 The authorities may require the satisfaction of certain criteria regarding the amount of paid-in capital or revenue before granting such permission. However, it is not required to obtain prior authorization to use city or other place names such as Istanbul or Izmir in the trade name.
5 However, revenues derived as “passive income”, for example, interest income or revenues obtained from the lease of owned property, are not considered to be commercial activities. However, ownership of property and maintaining funds above amounts necessary for the operation of the liaison office may be questioned by the authorities as exceeding the scope of permitted activities (and the revenues derived therefrom as revenue obtained from commercial activities).

The following summary assumes a privately held company. Accordingly, unless specific reference is made to public companies, it must be assumed that the referenced provisions of legislation apply only to private joint stock companies and that public joint stock companies may be subject to different rules.

Minority Rights in General

– Subject to certain procedures and prerequisites, shareholders holding at least 5% of shares in public companies, and shareholders holding at least 10% of shares in private companies1 have the following rights:

○ to request the board of directors to call a meeting of the general assembly of shareholders or, if a general assembly meeting is already scheduled, to add items to the agenda. If the board of directors does not honor this request, such shareholders have the right to request the court to order the same (Turkish Commercial Code (TCC), art. 411-412)
○ to request the postponement of the discussion of financial statements and related items at the general assembly of shareholders (TCC, art. 420)
○ to file a lawsuit to replace the company’s auditors for a valid reason (TCC, art. 399/4)1
○ to file a lawsuit for the dissolution of the company for valid reasons (TCC, art. 531)

– The articles of association may include provision granting the minority the right to appoint members to the board of directors. The number of such members may not exceed half of all seats on the board of a public company (TCC, art. 360).

– Minority shareholders can request the printing of registered share certificates (TCC, art. 486/3).

– The financial statements of the company, consolidated financial statements (if applicable), the annual activity report prepared by the board, audit reports (if applicable) and board’s dividend proposal (if applicable) must be made available to all shareholders at least 15 days prior to the relevant general assembly meeting at the company’s headquarters and branches. Financial statements and consolidated financial statements must remain available for a year (TCC, art. 437/1). At the general assembly meeting, shareholders can request the board to provide information about the operations of the company, and the work and findings of the auditors (TCC, art. 437/2); such a request may be denied only if there is a risk of divulging trade secrets of the company or prejudicing another interest of the company (TCC, art. 437/3).

– Provided that they have already used their information request and investigation rights as shareholders, all shareholders can request the general assembly to appoint a special auditor for the investigation of certain matters related to the company. If such request is denied, shareholders holding at least 5% of shares in public companies, shareholders holding at least 10% of shares in private companies, and shareholders holding at least TRY 1,000,000 in nominal amount of shares can appeal to the court (TCC, arts. 438-439).

– If the auditors, special auditors or the risk committee of the company submits an opinion specifying the existence of fraud regarding the relations between the company and its parent company or another subsidiary of the parent company, any shareholder of the company may request the court for the appointment of a special auditor (TCC, art. 207).

– Subject to certain conditions, shareholders have the right to challenge through court action improperly adopted general assembly resolutions (TCC, arts. 445-446).

General Assembly Voting Rights

– Unless otherwise prescribed by law (see below) or the articles of association, the meeting quorum for the general assembly of shareholders is 25% of shareholders and decisions can be taken by a simple majority of those attending the meeting. If the quorum is not attained in the first meeting, no quorum is required in the second (rescheduled) meeting (TCC, art. 418).

– The following decisions must be taken unanimously by the general assembly (i.e., even a single share can cast a veto vote) (TCC, art. 421/2):

○ imposing obligations to make up for balance sheet losses and imposing secondary obligations; and
○ moving the company headquarters abroad

– Decisions requiring the affirmative vote of 75% of shareholders (TCC, art. 421/3):

○ changing the subject of the operations of the company in its entirety;
○ issuing preferred shares; and
○ restricting the transfer of registered shares

– Decision requiring the affirmative vote of 60% of shareholders (TCC, art. 461/2):

○ restricting the preemptive rights of shareholders to participate in capital increases (the decision must also be based on a justifiable reason)

– Subject to certain exceptions, merger and split-up decisions are subject to the following quorum requirements (TCC, arts. 151/1, 173/2; Communiqué on Significant Transactions and Appraisal Rights):

○ private companies: 75% of those present at the meeting must approve the transaction and such votes must constitute a simple majority of all shareholders
○ public companies: no quorum requirement (unless required by the articles of association); two-thirds of those present and voting at the meeting must approve the transaction provided that if at least half of all eligible votes are present at the meeting, simple majority to approve the transaction

– Preferred shares can be created (subject to certain exceptions), with a maximum of 15 votes per preferred share (TCC, art. 479/2).
1 In both cases, the articles of association of the company can include a lower threshold.
2 The shareholder thus filing suit must have voted against the appointment of the auditor at the relevant general assembly meeting and duly registered such vote, and must have been a shareholder of the company for at least three months prior to such meeting.

Turkish law provides for squeeze-out rights of majority shareholders under very limited circumstances. In private mergers and acquisitions, the following types of squeeze-out rights are prescribed by law (different rules apply to public companies):

– in joint-stock companies, shareholders that are part of the same group of companies and own 90% or more of shares of the joint-stock company may squeeze out the minority shareholders if the minority shareholders violate the principle of good faith, cause significant problems in the company, act recklessly or prevent the company from performing its functions; and
– in mergers of two corporate entities, where the merging entities agree to such terms, majority shareholders holding 90% or more of the entity that will cease to exist post-merger may squeeze out the minority shareholders of that entity by way of the minority shareholders being paid cash proceeds in lieu of shares in the surviving entity.

The Turkish Commercial Code (TCC) includes strict restrictions on financial assistance, a concept borrowed from EU Council Directive 77/91/EEC relating to the formation of public limited liability companies, and the maintenance and alteration of their capital, which has since been amended and replaced to give member states more flexibility in permitting certain forms of financial assistance.

However, the TCC follows the original EU Directive and states that a joint-stock company (public or private) may not advance funds, make loans or provide security with a view to the acquisition of its shares by a third party (borrowed almost verbatim from the original EU Directive). The exceptions to the prohibition also follow the original EU Directive and are limited to transactions by banks and other financial institutions in their ordinary course of business, and transactions undertaken for the acquisition of shares by the employees of the company or the employees of one of its subsidiaries. These exceptions may not be used if they have the effect of reducing the reserves of the company below mandatory statutory thresholds or limits set by the company’s articles of association, or if they prevent the creation of statutorily mandated reserves or the use of such reserves. Read broadly, which is generally agreed by practitioners to be the legislative intent of the article, this provision essentially rules out the use of acquisition financing by a target operating company, and the market has generally shied away from trying to employ alternative structures such as the merger of the operating company with the holding company in a financed transaction.

Furthermore, while many jurisdictions that have financial assistance legislation permit companies to provide financial assistance for the acquisition of their shares as long as certain conditions, such as arm’s-length terms, the approval of shareholders, and maintenance of certain net-asset and reserve thresholds, are met, Turkish law has no such exceptions.

Turkish law allows parties to a contract to choose foreign law as the governing law of the contract if one of the following “foreign elements” is present:

– at least one party is not a Turkish citizen;
– the place of performance or execution of the agreement is in another country;
– the subject of the contract (such as goods or services) is located in another country; or
– at least one party resides in another country.

Certain prescriptive provisions of Turkish law (e.g., closing formalities in M&A transactions or formalities regarding the perfection of pledges in loan transactions) may still apply to a contract with non-Turkish law as its governing law.


The Turkish Personal Data Protection Law (PDPL), Law No. 6698 (Kişisel Verilerin Korunması Kanunu – KVKK) is the primary piece of legislation governing the protection of privacy and personal data in Turkey.

The PDPL, which came into force in October 2016, is modelled after and follows the GDPR to a large extent, with certain differences.

The aim of the PDPL is to safeguard the fundamental rights and freedoms of individuals with respect to the processing of their personal data. Accordingly, the PDPL sets forth the principles that apply to the processing, use and transfer of personal data. Any legal or natural person who processes the personal data of others in whole or in part by automatic means, or non-automatic means which form part of a data recording/filing system, are subject to these principles.

In addition to the sanctions set forth by the PDPL, crimes relating to data privacy and related sanctions are also regulated by the Turkish Criminal Code.

The Turkish Constitution has also specifically protected personal data since 2010. Furthermore, Turkey is a party to the Convention for the Protection of Individuals with regard to Automated Processing of Personal Data of 1981 of the Council of Europe.

Please click here for an overview of Turkey’s privacy and data protection regime.

The Turkish Personal Data Protection Law (PDPL) is modelled after and follows the GDPR to a large extent, with certain differences. The following table is a comparison of certain aspects of the two pieces of legislation:

Scope Applies to natural persons whose personal data are processed, and to natural or legal persons processing such data wholly or partially by automated means or by non-automated means which form part of a data filing system. Applies to the processing of personal data wholly or partly by automated means and to the processing other than by automated means of personal data which form part of a filing system or are intended to form part of a filing system.
Jurisdiction Applies to natural and legal persons in Turkey. Applies to the processing of personal data in the context of the activities of an establishment of a controller or a processor in the EU, regardless of whether the processing takes place in the EU or not.
Processing Personal data must be processed lawfully and in good faith, (“lawfulness and fairness”). Personal data must be processed lawfully, fairly and in a transparent manner in relation to the data subject, (“lawfulness, fairness and transparency”).
Data Controllers Registry Information System Data controllers and processors residing in Turkey are under the obligation to register with the Data Controllers Registry Information System (“VERBİS”) if their annual balance sheet is over TRY 25.000.000 and the annual number of employees is over 50.
This obligation also applies to foreign data controllers who collect or process personal data from Turkey, regardless of their annual balance sheet and annual number of employees.
Data controllers and processors are not under any obligation to register with a registry system.
Data Protection Officer N/A Data controllers and the processors are obliged to designate a data protection officer under certain terms and conditions.
Right to Erasure Despite the general provisions of the Turkish Constitution, PDPL does not foresee a right to erasure. The data subject has the right to obtain from the controller the erasure of personal data concerning the subject without undue delay and the controller shall have the obligation to erase personal data without undue delay where necessary grounds apply.
Data Protection Representative N/A Data controllers who are not residing in the EU but offer goods or services in the EU, or monitor the behavior of EU citizens must appoint a Data Protection Representative within the EU.
Cross-Border Transfer of Data As a general rule, personal data cannot be transferred abroad without the explicit consent of the data subject, except for certain conditions specified in the PDPL are met.

Standard contractual clauses are not applicable in the PDPL.

An expanded discussion of cross-border transfers is available below.

Transfer of personal data undergoing processing or intended for processing after transfer to a third country or to an international organization may take place only if the conditions laid down in the GDPR are complied with by the controller and processor.

In addition, standard contractual clauses for data transfers to non-EU jurisdictions may be used so long as appropriate safeguards regarding personal data transfers are provided. Accordingly, the GDPR provides wider alternatives than the PDPL for cross-border transfers.

Please click here for an overview of Turkey’s privacy and data protection regime.

As a general rule, personal data cannot be transferred abroad without the explicit consent of the data subject. However, personal data may be transferred abroad without explicit consent if that one of the conditions specified in the Personal Data Protection Law is met, and that:

– adequate protection is provided in the foreign country where the data is to be transferred (the Turkish Data Protection Board (the “Board”) has the authority to determine the countries where an adequate level of protection is deemed to be provided although it has not done so yet);
– where adequate protection is not provided, the controllers in Turkey and in the relevant foreign country guarantee sufficient protection in writing, and the Board authorizes such transfer (although data requiring the data subject’s explicit consent in Turkey will continue to require such consent and will not be automatically covered by the approved undertaking); or
– approved binding corporate rules are followed (although data requiring data subject’s explicit consent in Turkey will continue to require such consent and will not be automatically covered by such rules).

Binding corporate rules became available as an option only recently, pursuant to a decision by the Board. To use this method, group companies operating outside of Turkey in countries that are not listed as safe jurisdictions must apply to the Board and submit an undertaking on their use of sufficient protection. If this undertaking is approved by the Board, then the relevant company is no longer obliged to obtain approval for each transfer.

Please click here for an overview of Turkey’s privacy and data protection regime.


Turkish law has included, since 2018, certain restrictions, known as the “FX ban”, on the ability of parties to to enter into certain types of foreign currency-denominated and indexed contracts.

Please click here for a summary table of some of the significant restrictions and exemptions under the FX ban.

See the Turkish version of the table.

Corporate Taxes

The corporate tax rate is 20%. However, the rate for the fiscal year 2021 is 25% and the rate for 2022 is 23%. The rate for 2023 will again reset to 20%.

Stamp Duty

Stamp duty is normally applicable on contracts and other documents containing a monetary value. When applicable, the rate is normally 0.948%, with certain documents being subject to a rate of 0.189% and others being exempt from stamp duty altogether. Most significantly, share purchase agreements are exempt from stamp duty, with the caveat that if the agreement contains any other monetary undertakings, stamp duty may be applicable as a result.

In any case, the maximum amount of duty leviable on an agreement for the year 2023 is TRY 10,732,371.80 and the duty is levied only once regardless of the number of originals.

Certain types of documents are also subject to a fixed amount of duty.

Personal Income Tax Rates (2023)

Taxable Income Tax Rate
Up to TRY 70,000: 15%
Up to TRY 150,000: TRY 10,500 on TRY 70,000, then the following rate for the excess: 20%
Salary income of up to TRY 550,000: TRY 26,500 on TRY 150,000; and

for other income of up to TRY 370,000: TRY 26,500 on TRY 150,000,

then the following rate for the excess:

Salary income of up to TRY 1,900,000: TRY 134,500 on TRY 550,000; and

for other income of up to TRY 1,900,000: TRY 85,900 on TRY 370,000,

then the following rate for the applicable excess:

Salary income over TRY 1,900,000: TRY 607,000 on TRY 1,900,000; and

for other income over TRY 1,900,000: TRY 621,400 on TRY 1,900,000,

then the following rate for the excess:



Certain Turkish companies are required to have their financial statements independently audited. Below is a general overview of the applicable criteria.

A. Companies Always Subject to Independent Audit

The following types of companies, among others, must at all times engage an independent auditor on an ongoing basis:

– Publicly traded companies (including companies whose listing applications have been approved)

– Private companies with outstanding securities (including issuers whose applications have been approved)

– Subject to limited exceptions, companies subject to the regulation of the Turkish Capital Markets Board

– Subject to limited exceptions, companies subject to the regulation of the Turkish Banking Regulation and Supervision Agency

– Insurance companies

– Licensed television networks

B. Companies Subject to Independent Audit Depending on Certain Criteria

1. Companies that are not traded on an exchange but are deemed to be public companies by statute, if the company exceeds at least two of the following three thresholds for two consecutive financial years:

– Total Assets: TRY 30 million

– Net Sales: TRY 40 million

– Number of Employees: 50

2. Companies that are at least 25% owned by professional organizations, unions, associations, foundations, cooperatives deemed to be public institutions; national daily newspapers; certain companies subject to the regulation of the Turkish Information and Communication Technologies Authority; certain companies subject to the regulation of the Turkish Energy Market Regulatory Authority; certain companies owned by the Savings Deposit Insurance Fund of Turkey; and certain state-owned enterprises and municipal enterprises, if the company exceeds at least two of the following three thresholds for two consecutive financial years:

– Total Assets: TRY 60 million

– Net Sales: TRY 80 million

– Number of Employees: 100

3. All other companies (i.e., companies other than the ones described under (1) and (2) above), if the company exceeds at least two of the following three thresholds for two consecutive financial years:

– Total Assets: TRY 75 million

– Net Sales: TRY 150 million

– Number of Employees: 150

C. Exemptions

Certain companies that are at least %50 state-owned, certain state-owned enterprises subject to privatization and certain companies in the process of liquidation by the Savings Deposit Insurance Fund of Turkey, among others, are exempt from independent audit requirements.

A company subject to independent audit by virtue of triggering the thresholds described under (B) above will become exempt if (i) it falls below at least two of the three thresholds for two consecutive financial years or (ii) it falls 20% or more below at least two of the three thresholds for one financial year. Such exemption begins in the following financial year.

Other exceptions or exemptions may be applicable depending on the specific entity.

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