Foreign Investment
Law

The first question is not which company to form, but through which structure the investment will be carried out. The entry method, capital risk and exit plan are compared together.

• Comparing the options of forming a new company in Türkiye, joining an existing company as a shareholder, acquiring shares or a business, opening a branch or liaison office, and cooperation based on contracts.
• Assessing the legal consequences of greenfield (new facility) investment, brownfield (acquisition or upgrading of an existing facility), joint venture, special purpose company, distributorship, agency, franchise, licensing and project joint venture models.
• Preparing a legal roadmap according to the investor’s objective, sector, place of activity, capital and financing structure, management control, tax effect and exit plan.
• Reviewing the chain of documents and authority according to whether the foreign investor is a natural person, a company, a fund, a foundation, a joint venture or another corporate structure.
• Identifying in advance the fields that require a special permit, license, security screening, competition approval or public authority approval.

Formation documents, the investor’s identity and authority to represent, and the plan for activity in Türkiye should fit together in one structure. Post-registration obligations are also added to the formation plan.

• Comparing a joint-stock company, a limited liability company and other commercial structures suited to the nature of the investment.
• Preparing the articles of association with the purpose of activity, capital, share classes, management, representation, privileges, share transfer and exit provisions.
• Carrying out MERSIS, trade registry, tax number, potential tax number, notary, bank and relevant chamber procedures.
• Managing the apostille, consular legalization, translation and notarization of documents for foreign individual or foreign legal entity shareholders.
• Legal review of the corporate resolutions, activity certificate (faaliyet belgesi), signing authority, ultimate beneficial owner and group structure information of a foreign legal entity.
• Setting up, after formation, the share register, resolutions of the board of directors or board of managers, signing authorities, electronic notification and the corporate record system.

A branch is evaluated for commercial activity linked to the foreign head company; a liaison office is evaluated for non-commercial activity within the scope of a permit. A liaison office cannot be used as a sales company.

• Assessing the legal, tax, managerial and liability consequences of a foreign company opening a branch in Türkiye.
• Handling the branch formation, head company resolutions, trade registry, representative, tax and activity permits.
• Preparing the permit application for a liaison office, on the condition that no commercial activity is carried out in Türkiye.
• Monitoring the permitted field of activity of the liaison office, the funding of its expenses from abroad, its staff, address, annual notifications and extension procedures.
• Assessing the risk that a liaison office effectively becomes an income-generating activity, and the need to move to a company or branch structure.

The qualified service center regime added to Law No. 4875 in 2026 is assessed separately from an ordinary company or liaison office structure. Status and the conditions for applying the tax rules are checked together.

• Legal structuring of regional management, finance, risk, treasury, accounting, compliance, technology, data, human resources, training, brand, technical support, R&D, procurement or product development functions that multinational groups place in Türkiye.
• Assessing qualified service center status under Law No. 4875 in terms of the group structure, countries of activity, services provided to related companies and foreign revenue conditions.
• Aligning qualified service center activities with the articles of association, service agreements, invoicing, transfer pricing, data transfers and the personnel model.
• Reviewing, together with financial advisors, the current tax rules on corporate income and qualified service personnel.
• Assessing, when choosing the place of investment, the conditions linked to the Istanbul Financial Center (İstanbul Finans Merkezi), suitable industrial zones and other special investment areas.
• Periodic review of activity, revenue, personnel, documents and reporting processes to preserve the status.

Current regulation: Supplementary Article 1 of Law No. 4875 contains a definition that requires a group structure operating in at least three countries and at least 80% of annual revenues to be obtained from related companies or group companies abroad. The scope of the activity, the way the status is applied and the tax provisions must also be verified separately. Legal advice on persons and institutions in Türkiye, or on Turkish law, may be provided only by attorneys and attorney partnerships (avukatlık ortaklıkları) authorized under Law No. 1136.

Legal due diligence is more than collecting documents. For each material finding, its effect on the transaction, its price, its conditions precedent or the contractual protection is explained.

• Reviewing the target company’s trade registry record, shareholding structure, representation powers, share register, and general assembly and board resolutions.
• Auditing assets, title deeds, leases, licenses, permits, incentives, intellectual property, employees, tax, social security, personal data and contract status.
• Identifying ongoing and potential litigation, enforcement proceedings, administrative sanctions, competition, environmental, customs and criminal law risks.
• Legal evaluation of financial statements and commercial records, coordinated with financial and technical advisors.
• Preparing a legal due diligence report that classifies findings by level of importance and ties them to the transaction structure and contractual protections.
• Identifying matters that require the investment not to proceed, to be made subject to conditions, to carry a price adjustment, or to be covered by security, indemnity or post-closing obligations.

Signing an agreement and completing the transaction may not be the same stage. Permits, payment, the transfer of shares or assets and the change of management are linked to a consistent closing plan.

• Comparing share transfer, becoming a shareholder through a capital increase, business transfer, or transfer of specific assets.
• Preparing letters of intent, confidentiality agreements, exclusivity undertakings, term sheets and process protocols.
• Drafting and negotiating share purchase, participation, business or asset transfer agreements.
• Structuring conditions precedent, permits, representations and warranties, special indemnities, limits of liability, escrow arrangements, price adjustment and closing mechanisms.
• Simultaneous management of closing documents, share transfer, payment of the price, capital increase, change of management, and registry and notification procedures.
• Post-closing integration, corporate governance, contract renewal and regulatory compliance procedures.

A percentage of shares alone does not describe control. Decision-making, access to information, additional financing and exit provisions are arranged together with the articles of association.

• Preparing joint venture and investment agreements between domestic and foreign shareholders.
• Arranging capital and additional financing obligations, board representation, veto rights, budget, business plan and information mechanisms.
• Creating share transfer restrictions, pre-emption rights, tag-along and drag-along rights, valuation and exit provisions.
• Addressing deadlock situations, non-competition, confidentiality, intellectual property and related-party transactions.
• Ensuring that the shareholders’ agreement is consistent with the articles of association, mandatory Turkish law and trade registry practice.

Investment by way of capital and a shareholder or bank loan do not produce the same legal and financial consequences. The type of financing, cash flow, repayment and the validity of security are reviewed together.

• Legal evaluation of cash or in-kind capital, capital increases, capital advances and shareholder financing options.
• Preparing shareholder loans, intra-group financing, external loans, project finance, leasing and other financing agreements.
• Coordinated review with financial advisors of the effects of interest, thin capitalization, transfer pricing, withholding tax and foreign exchange regulation.
• Establishing share pledges, pledges over movables, mortgages, account pledges, assignments of receivables, suretyship, guarantees and letters of guarantee.
• Regulating financial covenants, events of default, early repayment, cross-default and the processes for enforcing security.

Direct foreign investment notifications under E-TUYS and incentive certificate processes are separate. Responsible persons are designated for authorization, correct data and a current notification calendar.

• Planning the E-TUYS user authorization processes of a foreign-capital company or branch.
• Legal control of the notification, in the electronic system, of information on activity, capital and share transfers relating to foreign capital.
• Auditing the consistency of shareholding, capital, payment and registry records with E-TUYS data.
• Remedying past-period deficiencies, incorrect notifications and differences between the company’s records.
• Establishing within the company the notification responsibility, an internal approval calendar and document retention arrangements.

An incentive is not an automatic result of being a foreign-capital company. Eligibility is assessed on the basis of the nature of the project, the choice of location, the timing of the application and the current support conditions.

• Assessing incentive eligibility based on the investment’s sector, NACE code, province and district, technological nature, capacity, fixed investment amount and employment targets.
• Reviewing the legal framework of investment incentive certificates, project-based support, strategic moves (stratejik hamle), priority and targeted investments, and local development programs.
• Assessing, on a project-specific basis, elements such as VAT exemption, customs duty exemption, tax reduction, social security premium support, interest or profit share support, and the allocation of an investment site.
• Legal support for E-TUYS authorization, incentive applications, revisions, the machinery and equipment list, the completion endorsement (tamamlama vizesi) and closing of the certificate.
• Managing breaches of incentive conditions, clawback of support, additional assessments, penalties and administrative disputes.
• Comparative legal review of technology development zones (teknoloji geliştirme bölgeleri), organized industrial zones (organize sanayi bölgeleri), free zones (serbest bölgeler) and other special investment areas.

Registration in the trade registry does not replace a permit to start an activity subject to special regulation. Permits for the formation, share transfer and operating stages are listed separately.

• Mapping the ministry, municipal, regulatory and other administrative permits required in the formation and operating stages of the investment.
• Tracking workplace opening and operating licenses, activity certificates, environmental permits, capacity reports, industrial register records and sector permits.
• Reviewing sector-specific legislation in banking, finance, insurance, payment services, energy, mining, health, pharmaceuticals, food, tourism, transport, electronic communications and other regulated sectors.
• Determining whether prior approval or notification is required for a share transfer, a change in management control or an indirect change of ownership.
• Application and litigation processes against the refusal, cancellation or suspension of a license or permit application, and against administrative fines.

Changes of control and current turnover rules should be reviewed before closing. In transactions that require approval, the parties effectively merging before approval is obtained may also create a separate risk.

• Assessing whether the transaction is a merger or acquisition that requires approval from the Competition Board (Rekabet Kurulu).
• Reviewing turnover thresholds, change of control, joint control and technology undertaking criteria under the rules in force on the transaction date.
• Preparing the notification file, collecting information from the parties and managing the process before the Turkish Competition Authority (Rekabet Kurumu).
• Coordination before closing, information sharing, a clean team with restricted access to competitively sensitive information, and protocols for competitively sensitive data.
• Managing the risks of implementing a transaction without competition approval, incorrect or incomplete notifications, and conditional approval.

Who will acquire the property matters as much as the use for which it will be acquired. The land registry review, zoning conformity and the conditions specific to foreign capital are considered together.

• Reviewing the land registry record, encumbrances, ownership, boundaries, actual use, leases and use rights of the investment property.
• Comparing the zoning plan, parceling, building permit, occupancy permit, architectural project, intended use and actual condition.
• Assessing the special application and permit regime that may apply when a foreign-capital company acquires real estate or a limited real right.
• Investigating public law restrictions such as military prohibited zones, military security zones, special security zones, coastal, forest, agricultural and conservation sites (sit), and other public law restrictions.
• Preparing sale agreements, promises of sale, leases, rights of superficies, usufruct, easements, mortgages and project development agreements.
• Valuation, zoning conformity, construction quality, environmental condition and project risk review, coordinated with technical experts.

Separate regime by acquirer: Foreign natural persons and companies established abroad are reviewed under Article 35 of the Land Registry Law (Tapu Kanunu); foreign-capital companies established in Türkiye are reviewed under the conditions of Article 36. The criteria in Article 36, such as at least 50% foreign shares or the power to appoint or remove the management majority, as well as indirect control and exceptions, are also assessed separately.

In new facility investments from scratch, land, permits, financing, construction and the start of operations are linked. The consistency of the technical timetable with legal commitments is checked.

• Legal review of the selection of the investment site, land acquisition or allocation, zoning and infrastructure rights.
• Environmental impact assessment (ÇED), environmental permits, land use permits, licenses, infrastructure connections and procedures to be carried out with public institutions.
• Preparing design, engineering, construction, equipment procurement, engineering, procurement and construction (EPC), turnkey and subcontractor agreements.
• Arranging the work schedule, progress payments, price adjustment, change orders, delay, defects, security and acceptance mechanisms.
• Managing site matters, occupational health and safety, foreign technical personnel and contractor disputes.

Tax and customs effects are assessed from the formation of the investment to the payment and exit stages. Legal work is coordinated with the accounts and reviews of financial advisors and other qualified specialists.

• Coordinated assessment with financial advisors of the effects of corporate tax, VAT, withholding tax, stamp duty and transaction taxes on the investment structure.
• Reviewing double taxation treaties, permanent establishment, tax residence, dividends, interest and royalties.
• Legal regulation of transfer pricing, related-party transactions, intra-group services and cost-sharing agreements.
• Legal assessment of imports, exports, customs value, origin, tariff classification, inward processing and free zone transactions.
• Legal support in tax audits, customs additional assessments, administrative fines, settlement and judicial processes.

In projects related to the public sector, permits, allocation, regulatory decisions and the application calendar matter as much as tender and contract terms. The administrative or private law nature of the transaction is determined.

• Legal review of public tenders, privatizations, public-private partnerships, build-operate-transfer (yap-işlet-devret) and concession projects.
• Preparing tender documents, qualification, bids, consortium, joint venture and subcontractor agreements.
• Allocation of public real estate, investment sites, licenses, permits and regulatory body procedures.
• Disputes over exclusion from tenders, debarment, termination of contracts, loss of revenue and administrative sanctions.
• Assessing domestic remedies and international protection routes in investment disputes arising from state action.

The legal position of the shareholder, the manager and the employee is determined separately. The need for a work permit, exemption, assignment and social security status are reviewed according to the person and the role.

• Assessing whether foreign shareholders, managers, key personnel, technical specialists and employees need a work permit.
• Reviewing foreign direct investments of special significance and the key personnel provisions as they apply to the specific company.
• Coordinating work permits, residence, assignment, employment contracts, salary, fringe benefits and social security procedures.
• Managing the international workforce, workplace practices, occupational health and safety, termination and employee disputes.
• Assessing whether social security agreements between Türkiye and other countries are applicable.

The contracts of the supply chain must carry the investment’s business model, from payment and delivery to intellectual property, termination and arbitration. The language to be used and the governing law are clarified at the outset.

• Drafting sale and purchase, supply, production, service, distributorship, agency, franchise, logistics and warehousing agreements.
• Regulating Incoterms, delivery, quality, inspection, payment, currency, price adjustment, force majeure and hardship provisions.
• Negotiating guarantees, warranties, product liability, insurance, limitation of liability, termination and dispute resolution provisions.
• Clarifying the order of priority between Turkish and foreign language texts, the governing law, jurisdiction and arbitration clauses.
• Legal risk review of suppliers, customers and strategic business partners.

The value of an investment may not lie only in tangible assets. It is examined whether the software, trademarks, licenses, trade secrets and data use rights actually belong to the target company.

• Identifying trademarks, patents, designs, copyright, software, domain names, trade secrets and know-how before the investment.
• Assigning intellectual property to the company, licensing it, its use within the group, and arranging the ownership of rights created by employees or contractors.
• Preparing technology transfer, software development, cloud services, software as a service (SaaS), R&D and license agreements.
• Legal review of the protection of personal data, cross-border data transfers, data processor relationships, retention and security processes.
• Legal preparation for cyber incidents, data breaches, platform liability and digital investment risks.

The compliance work does not end when the investment is completed. The decision, representation, reporting and control arrangements of the Turkish subsidiary should be set up together with the parent company’s policies and local law.

• Arranging the processes of the board of directors or board of managers, the general assembly, representation, signing and decision-making.
• Placing the authority, reporting, policy and service relationships between the foreign parent company and the Turkish subsidiary on a legal basis.
• Identification of the ultimate beneficial owner, customers and business partners, and anti-bribery and anti-corruption, sanctions and export control policies.
• Preparing personal data protection, competition, consumer, environmental, labor law and sector-specific compliance programs.
• Managing internal investigations, the whistleblowing system, conflicts of interest, gifts and hospitality, and third-party and distributor risks.

Freedom of transfer, the existence of distributable profit, tax obligations and bank document controls are different matters. The payment type and the supporting documents are clarified before the transaction.

• Assessing distributable profit, reserves, general assembly resolutions and tax conditions for dividend distribution.
• Reviewing the contract and tax basis of management service fees, license fees, royalties, interest, and sale or liquidation payments.
• Coordinated assessment with financial advisors of transfer pricing, simulated transactions (muvazaa), concealed profit distribution, foreign exchange and bank compliance risks.
• Preparing the document and decision process for transferring investment income abroad through banks.
• Legal support for foreign exchange, sanctions, anti-money laundering and problems arising from bank customer due diligence.

Commercial arbitration and investor-State arbitration are not the same route. The parties to the dispute, the applicable contract or agreement, the arbitration consent and the possibility of enforcement are reviewed separately.

• Managing disputes over shareholding, investment agreements, share or asset transfers, financing, supply, construction and licensing.
• Interim injunctions, precautionary attachment, preservation of evidence, protection of assets and requests for security.
• Legal representation before Turkish courts, in mediation, and in national or international arbitration proceedings.
• Actions to set aside, recognition, enforcement and execution of arbitral awards.
• Assessing the possibility of an investor-State dispute under bilateral investment treaties (BITs), investment agreements and applicable international instruments.
• Recognition, enforcement and implementation in Türkiye of foreign court judgments.

Investment treaty review: The entry into force of the treaties between the relevant states, the definition of investor and investment, the temporal scope, the preconditions for claims and the consent to dispute resolution are examined. Every administrative act or investment loss does not automatically give rise to an international arbitration claim; ICSID jurisdiction also depends on the conditions of Article 25 of the ICSID Convention.

The exit plan should not be considered only at the end of the investment. Share sale, refinancing, restructuring and liquidation options are compared together with debts, employees and remaining commitments.

• Assessing capital loss, over-indebtedness (borca batıklık), financial restructuring and composition with creditors (konkordato) risks.
• Comparing intra-group debt, capital completion, business transfer, share sale or asset sale options.
• Legal coordination in management changes, shareholding deadlocks, internal investigations, regulatory reviews and commercial crises.
• Sale of the investment to a third party, admission of a strategic shareholder, public offering, or intra-group reorganization transactions.
• Closure of a branch, liaison office or company; liquidation, employees, contracts, tax, registry and transfer of remaining assets processes.