GILS Corporate law: Turkey

TURKEY

(1) Forms of doing business and Establishment

1.1. What are the options for establishing a company's presence in a country (branch, representative office, subsidiary, etc.), and what are their key advantages and limitations?

Many regulations have been made to protect foreign investors that want to play an active role in the Turkish market and to encourage them to invest in Türkiye.

According to the Foreign Direct Investments Law No. 4857; unless otherwise provided for by international agreements and special law provisions, foreign investors are subject to equal treatment with domestic investors.

The five types of the companies in Türkiye are Joint Stock Companies, Limited Companies, Collective Companies, Limited Partnership Companies and Cooperative Companies.

Foreign legal entity investors can also open a Liaison Office or a Branch Office in Türkiye.

Key advantages and limitations of those legal entities are as follows: 

I. Companies: 

• Advantages:

- limited liability for the shareholders compared to branch offices and liaison offices; 

- are permitted to sale and purchase real estates in Türkiye (some limitations and restrictions still apply); 

- for joint stock companies, there are some tax advantages on M&A. 

• Limitations:

- more bureaucratic procedure for the establishment and liquidation compared to branch offices and liaison offices; 

- more internal procedures compared to compared to branch offices and liaison offices (i.e. annual general assembly meetings); 

- minimum Capital Requirement (TRY 50 000 for Limited Companies and TRY 250 000 for Joint Stock Companies). 

II. Branches: 

• Advantages:

- foreign company can display commercial activities directly in Türkiye under its commercial title; 

- easy incorporation and liquidation process compared to a Turkish company; 

- no Minimum Capital Requirement. 

• Limitations:

- foreign company is fully liable for the debts and obligations of the liaison office; 

- local management is required. 

III. Liaison Offices: 

• Advantages:

- no trade registration process; 

- easy and fast to obtain permit from the Ministry; 

- no Minimum Capital Requirement; 

- tax incentive on the salaries of the employees. 

• Limitations:

- limited life: Liaison Office permits are granted for a period up to 3 years, and extension applications must be made at the end of each period or permit; 

- foreign company is fully liable for the debts and obligations of the liaison office; 

- no commercial Activities are allowed.

1.2. What is the process for creating a legal entity or another form of presence in the country, including the laws to follow, legal entities to be considered, documents required, stages and terms for registration? 

I. Companies: 

1. Pre-registration stage: 

Application process for registration and announcement at the Trade Registry Office. General required documents required for application: 

- certified copies of the ID certificates of the real person founders (if they have Turkish citizenship) and their residence certificates. (In case there are any real persons of foreign citizenship among the founders of the company, the xerox copy of his/her passport to be presented together with the passport itself or its notarized copy); 

- in case the foreign shareholder(s) is a legal entity; the original copy of Certificate of Business Activity issued by the competent authorities approved by the related Turkish Consulate or apostilled and its notarized translation; 

- if there is a manager appointed which is not a shareholder of the company, a notarized document stating that he/she accepts to be the manager of the company. (the document shall bear the residential address of the person, tax number or id number) The xerox copy of his/her passport to be presented together with the passport itself or its notarized copy shall also be attached; 

- establishment notification form; 

- notarized articles of association; 

- signature declaration under the company name of persons authorised to sign; 

- bank receipt - bank letter showing that four ten thousandths of the capital has been deposited as Competition Authority fee; 

- bank receipt-bank letter regarding the blocking of ¼ of the Cash Capital; chamber registration declaration; 

- notarized document containing the signatures of non-shareholder board members accepting the duty;

The required documents vary depending on the type of company and partners. 

• Creating a capital blockage in the bank: Another process of establishing a company will be to block the company capital in the bank. For capital blockage, go to the bank branch with the potential tax number and articles of association and meet with the authorised person. 
• Permission phase from the Ministry of Customs and Trade: This stage in the company establishment process is valid for Joint Stock Companies whose establishment and amendment of the Articles of Association are subject to Ministry permission.

With all these permits and documents, an appointment is made at the Trade Registry and the company is established by announcing it in the Trade Registry Gazette on the same day. 

2. Post-Registration Stage:

• Notary procedures after registration: Immediately after the registration process, the legal books are notarized on the same day. A certificate of registration and a Registry Certificate are obtained from the legal books and the Trade Registry Office. The books are certified by going to the notary with these documents.
• Issuing signature circular phase: One of the tasks to be done after registration will be to obtain the signature circular from the notary. The certificate of registration of the company obtained from the Trade Registry Office and the Articles of Association are submitted to the notary.
• Applying to the Tax Office to open tax liability for the company: Tax liability is one of the basic conditions during the company establishment process. An application is made to the Tax Office for the opening.
• Resolving the capital blockage in the bank: Now it is time to solve the capital blockage deposited in the bank. To do this, go to the consultant at the bank branch where the money is deposited, together with the Registration Certificate obtained from the Trade Registry Office.
• If personnel will be employed, the application phase to Social Security Institution (SGK): If you are going to employ personnel in your company, you must apply to the Social Security Institution for the insurance entries of these people.

II. Branch Offices: 

1. Pre-registration stage: 

Application process for registration and announcement at the Trade Registry Office. General required documents required for application. 

- Petition: to be signed by the authorised signature holder of the Branch, 
Incorporation Declaration Form: to be signed by the authorised signature holder of the Branch,

- Chamber Registration Declaration: to be signed by the authorised signature holder of the Branch,

- A copy of the articles of association (or Memorandum of Incorporation of the Company): To be notarized and apostilled (or certified by the Turkish Embassy) (to be translated and notarized in Türkiye),

- A copy of an official document showing the current registry records of the Company (or Certificate of Activity or a similar document): To be notarized and apostilled (or certified by the Turkish Embassy) (to be translated and notarized in Türkiye),

- A Company Resolution for the incorporation of a branch in Türkiye and appointment of Branch Manager. To be notarized and apostilled (or certified by a Turkish Embassy) (to be translated and notarized in Türkiye),

- A Declaration concerning the information of the Company: to be signed by the authorised representatives of the Company, 

- Signatory Declarations of the Branch Manager(s): To be notarized and apostilled (or certified by a Turkish Embassy) (to be translated and notarized in Türkiye),

- In case of Foreign Managers: [Please note that at last 1 manager must be a Turkish resident] 1. passport copy and 2. a work permit should be obtained,

- A statement from competent authority stating that the Company bears the criteria required for Branch opening. To be notarized and apostilled (or certified by a Turkish Embassy).

2. Post-Registration Stage:

• Notary procedures after registration: Same as Turkish companies.
• Issuing signature circular phase: Same as Turkish companies.
• Applying to the Tax Office to open tax liability for the company: Same as Turkish companies.
• If personnel will be employed, the application phase to Social Security Institution (SGK): Same as Turkish companies.

III. Liaison Offices: 

1. Pre-registration stage: 

Application process for the approval from the Ministry: A permit is required to establish a liaison office in Türkiye. The permit issuing authority for opening a Liaison Office in Türkiye is the Directorate General of Foreign Investments, Turkish Treasury. If the application procedure is in order and documents completed, the permit will be issued within five days. General required documents required for application:

- official application form;

- declaration form listing the scope of activities to be carried out by the liaison office and indicating that the liaison office will not conduct commercial activities;

- certificate of activity of the foreign company to be received from the relevant trade registry in the country where the foreign company is incorporated (to be apostilled or legalised);

- activity report or balance sheet and income statement of the foreign company for recent years;

- certificate of authority to be issued in the name of the authorised person of the liaison office;

- power of attorney is to be issued in the name of the attorney who will file the permit application with the Ministry.

2. Post-Registration Stage:

• Notary procedures after registration: Same as Turkish companies.
• Issuing signature circular phase: Same as Turkish companies.
• Applying to the Tax Office to open tax liability for the company: Same as Turkish companies.
• If personnel will be employed, the application phase to Social Security Institution (SGK): Same as Turkish companies. 

1.3. What additional authorizations/approvals are required to create a legal entity or start operations, and how do they vary depending on the type of business (if any)? 

Some specific commercial activities are subject to additional permission or approvals required by special laws such as Banking Law, Capital Markets Law and Energy Law.

The companies such as banks, financial leasing companies, factoring companies, consumer finance and card services companies, asset management companies, insurance companies, gas distribution companies, real estate investment trusts, hospitals are subject to activity licences in order to display commercial activities in the sectors such as banking and finance, energy and medical.

1.4. What are the most common types of Legal Entities in your country and the differences between them in terms of taxation, liability, and management?

   1.4.1. What are the shareholder structures of these types of legal entities? 

   1.4.2. What is the Shareholders’ responsibility in these types of legal entities? 

   1.4.3. What is the responsibility of the representatives in these types of legal entities? 

   1.4.4. Briefly, what are the characteristics of the other types of Legal Entities? 

Joint Stock Company and Limited Company are the most common types of Legal Entities in Türkiye. In terms of Taxation, there is no difference on corporate tax, VAT and withholding tax obligations. Exceptionally, shareholders of Joint Stock Companies can have tax exemption for the sale of their shares in those companies under some circumstances. In principle, shareholders of both legal entities are liable only up to the extent of their contributions, except the public debts. Exceptionally, Limited Company shareholders are directly accountable for the company’s uncollected public debts (such as unpaid taxes and social security premiums), in proportion to their capital contributions. Management of the Joint Stock Company can be performed by a board of directors which can be composed of at least one board member. For Limited Companies at least one manager will be responsible for the management of the company. 

1.4.1. Shareholder Structure: Joint Stock Companies can be incorporated with as little as one shareholder, and there's no upper limit defined for the maximum number of shareholders. On the other hand, Limited Liability Companies require a minimum of one shareholder and can have up to a maximum of 50 shareholders. 

1.4.2. Shareholder’s Responsibility: In principle, shareholders of both legal entities are liable only up to the extent of their contributions, except the public debts. Exceptionally, Limited Company shareholders are directly accountable for the company’s uncollected public debts (such as unpaid taxes and social security premiums), in proportion to their capital contributions. 

1.4.3. Company Representatives’ Responsibility: Representatives (Board Members in Joint Stock Companies and Managers in Limited Companies) are directly and jointly accountable for the company’s uncollected public debts (such as unpaid taxes and social security premiums). Representatives are also liable directly and jointly accountable for the losses of the company, shareholder and creditors of the company in case of mismanagement. 

1.4.4. Other Types of Legal Entities: 

• Collective Companies: A limited liability company is established between real persons who want to operate it under a trade name. It is a type of company in which the company is primarily responsible for debts and commitments and the partners are unlimited in the secondary degree, and no minimum capital is stipulated. 
• Limited Partnership Companies: Limited partnerships are established with at least two partners and at least one partner becomes a limited partner. While the liability of the general partner is unlimited, the liability of the limited partner is limited to the capital committed. If there is no special provision in the limited company, the provisions in joint stock companies apply. Limited partnership is a type of company that is not very common in Türkiye.
• Cooperative Companies: Cooperative companies are a type of company that can be established by real or legal persons. It is a legal entity established for the purpose of providing economic interests and professional needs with mutual aid, solidarity and guarantee. Legal entities can be established with at least 7 partners.
• Branch Offices: Foreign companies will have full liability on the branch office's debt and obligations. 
• Liaison Offices: Foreign companies will have full liability on the liaison office's debt and obligations.

1.5. What are the operating costs associated with the maintenance of a legal entity or presence in the country?

The operating costs related to the maintenance of the legal entity or presence in the country rents (for the registered address of the company’s headquarters), service fee of the chartered public accountant and the salaries of the employees. 

(2) General taxation issues 

2.1. What tax obligations are associated with doing business in the country? 

Tax liabilities of doing business in Türkiye may include:

1. Corporate Tax: It is the tax paid on the profits of companies. The general rate can vary between 20% and 25%.

2. Income Tax: It is the tax paid by employees and business owners on their earnings. Income tax rates vary depending on income level and range from 15% to 35%.

3. Value Added Tax (VAT): It is the tax collected from goods and services sold. The standard VAT rate is 18%, but different rates such as 1%, 8%, 20% apply for some products.

4. Social Security Contributions: Contributions to the social security system shared between employees and employers. Premium rates vary depending on the employee's salary and the insurance status of the person hired by the employer.

5. Real Estate Tax: It is the tax paid according to the value of real estate. It is paid through declaration of value and its rate varies between 0.1% and 0.3%.

6. Stamp Duty: It is a tax paid for the issuance of certain documents or transactions such as commercial contracts. Rates vary depending on document type.

7. Special Consumption Tax: It is the tax collected from goods subject to special consumption tax, such as alcohol and tobacco products. Rates vary depending on the product and quantity.

8. Business Licences and Licences: The documents required to do business and the fees paid to obtain these documents may also be among the tax liabilities.

In addition to these taxes, tax legislation and regulations in Türkiye may change from time to time. 

2.2. What tax and customs incentives are available in a country? 

In Türkiye, tax and customs incentives are offered to various investors and sectors. These may include: 

1. Double Taxation Treaties: Türkiye has Avoidance of Double Taxation Agreements with 73 countries in order to eliminate double taxation on the incomes of the foreign individuals and legal entities domiciled in those countries.

2. Investment Incentive Certificates: Investment incentive certificates that provide various incentives are given to businesses that will invest in Türkiye. Within the scope of these documents, opportunities such as tax deductions, tax exemptions, customs duty exemptions, and insurance premium employer share support may be offered.

3. Regional Incentives: There are regional incentives for businesses that will invest in different regions in Türkiye. In particular, the incentives provided to businesses investing in the Eastern and Southeastern Anatolia regions are higher and may include support such as tax reductions and customs duty exemptions.

4. R&D and Innovation Incentives: Incentives such as tax deductions and employer share of insurance premiums are provided to businesses that carry out R&D and innovation activities. Additionally, special incentives may be offered to businesses registered as R&D centres and design centres.

5. Employment Incentives: Within the scope of employment increasing measures, there are incentives for special groups such as young people, disabled people and women who are employed. These incentives may include opportunities such as insurance premium employer share support and income tax reduction.

6. Customs Exemptions: Customs duty exemptions or discounts may be provided to businesses that meet certain conditions. Such incentives can be applied especially to businesses that export or operate in certain sectors.

Details and application conditions of these incentives may change from time to time.

2.3. What are the accounting and reporting requirements for different types of presence, and how often must they be submitted? 

Joint stock companies, limited companies, collective companies, limited liability companies, corporations and cooperatives, which are capital companies, are considered merchants as soon as they are registered and acquire legal personality. Unlike natural persons, it does not matter whether they operate a commercial enterprise at the time of registration. Gaining the title of merchant has some consequences;

The opening balance sheet and year-end financial statements of traders are regulated in Articles 68-71 of the Turkish Commercial Code. These items are discussed below. According to Article 68, “The trader must prepare a financial statement (opening balance sheet and annual balance sheet, respectively) showing the relationship between the amounts of assets and liabilities at the beginning of his commercial activity and at the end of each activity period. In the opening balance sheet, the provisions of the year-end financial statements regarding the year-end balance sheet are applied. In addition, the business prepares the income statement. The balance sheet and income statement constitute the year-end financial statements. Article 514 and the provisions of Turkish Accounting Standards on this subject are reserved.” Thus, every trader is obliged to prepare year-end financial statements including the opening balance sheet, annual balance sheet and annual income statement.

Another obligation for capital companies is commercial books. The relevant legislation on this subject is regulated in the Turkish Commercial Code and Tax Procedure Law. 

Commercial Books that must be kept: 

1. General Journal; 

2. General Ledger; 

3. Inventory; 

4. Share Ledger; 

5. Board of Directors Managers Decision Book; and 

6. General Assembly Meeting and Negotiation Book. 

Certification Times 

First Opening Certifications: All commercial books must be first opened at establishment and before they can be used.

Opening Certifications in Subsequent Activity Periods: In the activity periods following the activity period in which the first opening certification is made, the opening certification of these books, journal, general ledger, inventory and board of directors resolution book, must be made until the end of the month before the first month of the activity period in which they will be used.

In other words, those whose accounting period is a calendar year must have the opening certification of these books completed by the end of December.

The share ledger and the general assembly meeting and negotiation book can be used in subsequent activity periods without opening certification, provided that there are sufficient pages. 

Closing Certifications: Among the above books, only the General Journal and the Board of Directors' Decision book will be closed.

The closing certification of these books must be made by the end of the third month of the activity period following the accounting period in which they are used.

In other words, those whose accounting period is a calendar year must have the closing certification of these books completed by the end of March. 

Audits: A statutory audit is required for the companies which meet 2 of the following 3 criteria: 

1. annual turnover > TRY 75 million; 

2. total assets > TL 30 million; and/or 

3. number of employees > 175. 

In addition to those companies, some companies displaying some certain commercial activities (like banking) are also subject to statutory audit.

Tax audits are generally performed by the Ministry of Finance on a random basis. However, companies can work with independent sworn accountants authorised by the Ministry. 

2.4. What is the taxation of dividends for foreign investors? 

Dividends paid to a resident or nonresident individual, or a nonresident company, are subject to a 15% withholding tax, unless the rate is reduced under a tax treaty between Türkiye and the country of residence of the nonresident individual or nonresident company. Türkiye has made double taxation avoidance agreements with many countries which enable the foreign shareholders to pay withholding tax with a reduced rate.

2.5. What strategies exist for minimising tax liability when conducting international business?

Here are some strategies that can be used to minimise tax liability when doing international business in Türkiye: 

1. Customs Discounts and Exemptions: You can reduce customs duties or benefit from exemptions by taking advantage of regulations such as free trade agreements or special customs zones signed by Türkiye.

2. VAT Refund in Foreign Trade: You can request a refund of some or all of the Value Added Tax (VAT) paid when exporting. This is a method of incentive provided to exporters.

3. R&D and Innovation Incentives: Businesses that engage in R&D and innovation activities can benefit from tax deductions on expenses incurred for these activities.

4. Regional Incentives: In some regions in Türkiye, incentives such as tax reductions and exemptions are offered in case of investment. You can reduce tax liabilities by operating in these regions.

5. Transfer Pricing Practices: Tax advantages can be provided through transfer pricing practices in the purchase and sale of goods or services between international companies. In this method, it is important to make pricing in accordance with independent market conditions.

6. Double Taxation Agreements: You can gain tax advantages by taking advantage of the double taxation prevention agreements that Türkiye has signed with various countries.

7. Export Refunds: You can request a refund of some or all of the customs duties paid when exporting. This is a method of incentive provided to exporters.

The applicability and effectiveness of these strategies may vary depending on the characteristics of the business, the sector and the nature of the trade.

(3) Regulatory and miscellaneous 

3.1. What are the general data protection and privacy requirements in the country, and how do they affect company operations? 

In Türkiye, data protection and privacy requirements are primarily governed by the Personal Data Protection Law (KVKK), which is based on international standards such as the European Union's General Data Protection Regulation (GDPR). Here are the general data protection and privacy requirements in Türkiye and how they affect company operations: 

Consent: Companies must obtain explicit consent from individuals before collecting and processing their personal data. This includes informing individuals about the purpose of data collection, processing, and their rights regarding their data. 

Minimization: Companies are required to collect only the necessary personal data for the specified purposes. Excessive or irrelevant data collection is not permitted. 

Purpose Limitation: Personal data can only be processed for specific, clear, and legitimate purposes. Any further processing must be compatible with these purposes. 

Data Security: Companies are obligated to implement technical and organisational measures to ensure the security of personal data against unauthorised access, disclosure, alteration, or destruction. 

Data Transfer: Transfer of personal data outside of Türkiye is subject to certain conditions and safeguards to protect the rights of data subjects. Adequate levels of data protection must be ensured in such transfers. 

Data Subject Rights: Individuals have various rights regarding their personal data, including the right to access, rectify, erase, restrict processing, object to processing, and data portability. Companies must facilitate the exercise of these rights. 

Data Processing Records: Companies are required to maintain records of their data processing activities, including purposes, categories of data processed, data subjects, data transfers, and security measures. 

Data Protection Impact Assessment (DPIA): Companies may need to conduct DPIAs for high-risk data processing activities to assess and mitigate potential risks to individuals' rights and freedoms. 

Data Protection Officer (DPO): In certain cases, appointing a Data Protection Officer is mandatory, especially for public authorities and organisations engaging in large-scale processing of sensitive data. Non-compliance with data protection and privacy requirements in Türkiye can result in significant fines and legal consequences. 

Therefore, companies operating in Türkiye must ensure compliance with KVKK to protect individuals' privacy rights and avoid legal liabilities.

3.2. What labour law features should be considered when hiring local and foreign employees? 

When hiring both local and foreign employees in Türkiye, it's crucial to consider various aspects of labour law to ensure compliance and a smooth employment relationship. Here are some key features to consider: 

Employment Contracts: Both local and foreign employees should have written employment contracts that clearly outline the terms and conditions of employment, including job duties, working hours, salary, benefits, termination procedures, and any applicable probationary period. 

Work Permits for Foreign Employees: Foreign employees must obtain work permits to legally work in Türkiye. Employers should assist foreign employees in obtaining the necessary permits and ensure compliance with immigration laws. Please also note that there are also some requirements for work permits such as minimum paid up capital (i.e. TRY 100 000 for the branches), employment of at least 5 Turkish employees, etc. 

Minimum Wage: Employers must pay employees, both local and foreign, at least the minimum wage set by the government. Minimum wage rates may vary based on factors such as industry and location. 

Working Hours and Overtime: Turkish labour law specifies standard working hours, typically 45 hours per week. Overtime work is subject to additional compensation, and employers must comply with overtime pay regulations. Paid Leave: Employees are entitled to paid annual leave, sick leave, maternity leave, and other types of leave as per labour regulations. Employers should adhere to these leave entitlements for both local and foreign employees. 

Social Security Contributions: Employers are required to make social security contributions for their employees, covering health insurance, retirement, and other benefits. These contributions apply to both local and foreign employees working legally in Türkiye. 

Discrimination and Equal Treatment: Employers must comply with laws prohibiting discrimination based on factors such as gender, religion, race, nationality, disability, or age. Equal treatment and opportunities should be provided to all employees. 

Termination Procedures: Labor law sets out procedures and requirements for terminating employment contracts, including notice periods, severance pay, and reasons for dismissal. Employers must follow these procedures when terminating both local and foreign employees. 

Health and Safety: Employers have a duty to provide a safe and healthy working environment for all employees, including measures to prevent workplace accidents, occupational diseases, and hazards. 

Employee Representation: In companies with a certain number of employees, employee representation bodies may be established. Employers should be aware of the rights and responsibilities of these bodies as per labour law.

By understanding and adhering to these labour law features, employers can foster a positive and compliant working environment for both local and foreign employees in Türkiye. 

3.3. What are the requirements for currency regulation and currency control? 

Some requirements for currency regulation and currency control in Türkiye are: 

1. Foreign Exchange Legislation: Activities such as buying, selling, transferring and using foreign currency in Türkiye are determined by the Law on Foreign Exchange Transactions, Decree No. 32 on the Protection of the Value of the Turkish Currency and relevant regulations. These laws determine how foreign exchange-related transactions can be carried out, who can do so, and what conditions they are subject to.

2. Central Bank Supervision: The Central Bank of the Republic of Türkiye (CBRT) determines and implements the monetary and foreign exchange policies in the country. The CBRT may impose certain rules and standards regarding foreign exchange transactions and supervise these transactions.

3. Exchange Rate Policies: CBRT determines Türkiye's exchange rate policies. These policies include whether to adopt a fixed exchange rate system or a floating exchange rate system, how to determine exchange rates, and the measures to be taken to ensure compliance with these rules.

4. Capital Controls: Capital controls may be applied in Türkiye. These controls regulate foreign investments, capital movements and foreign exchange transfers within certain conditions and limitations. They can be especially applied to control volatility in the foreign exchange market.

5. Reporting and Monitoring: Within the scope of currency regulation and control, there may be reporting and monitoring requirements regarding foreign exchange transactions. In particular, financial institutions and foreign exchange companies may have specific standards and procedures to monitor and report such activities.

6. Foreign Investment Controls: Certain controls and permits may be required on issues such as the entry and exit of foreign investments into Türkiye and the financing of these investments with foreign currency. These controls can be implemented to maintain balance in the foreign exchange market and manage the economic effects of foreign investments.

7. Anti-Money Laundering (KYC) and Anti-Financial Crimes (AML): KYC and AML rules apply regarding foreign exchange transactions in Türkiye. Financial institutions and foreign exchange companies implement certain procedures and controls to identify their customers and combat financial crimes.

These requirements are just some of the measures introduced to regulate and control Türkiye's foreign exchange market. Individuals and institutions carrying out foreign exchange transactions must comply with the relevant legislation and act in accordance with the requirements. 

3.4. What corporate law features should be considered when planning mergers, acquisitions, and company restructuring in the country? 

The following corporate law features should be taken into account when planning transactions such as mergers, acquisitions and company restructurings in Türkiye:

1. Turkish Commercial Code: This law, which regulates the structure and operation of joint stock and limited companies, constitutes a basic reference point in such transactions. This law determines the general rules and procedures for transactions such as mergers, acquisitions, share transfers and company restructurings.

2. Shareholders Agreements: Agreements made between shareholders are important in merger, acquisition or restructuring processes. These agreements regulate the rights of shareholders, voting rights, profit distribution and other issues and enable decisions to be made in transactions.

3. Share Transfer Procedures: Corporate law includes procedures determining share transfers and the validity of these transfers. Legal requirements and steps to be followed in share transfers are important during the transaction process.

4. Contracts and Agreements: Various contracts and agreements are signed in merger, acquisition and restructuring transactions. These agreements may include purchase agreements, merger agreements, share transfer agreements, shareholders agreements, and collaboration agreements. It is important that these contracts are prepared and negotiated correctly.

5. Competition Law and Permits: Competition law and relevant permits should be taken into account in large-scale merger and acquisition transactions. Permissions to be obtained from the Competition Authority and competition law restrictions are important in the transaction process.

6. Regulatory Authority Approvals: For some sectors such as banking & finance and energy share transfers are subject to the preapproval of the relevant regulatory authority. (i.e. approval of Banking Regulation and Supervision authority is required for the sale of shares in banks.) 

These features are important corporate law elements that must be taken into account in order to successfully carry out transactions such as mergers, acquisitions and company restructurings. 

3.5. What are the most efficient mechanics for dispute resolution?

The most preferred way for the dispute resolution is still the conventional litigation before Turkish Courts.

At the same time, Turkish law has fulfilled the requirement to first go to Mediation as a litigation condition for most commercial disputes. By introducing such a method before disputes go to court, the processes are shorter and disputes are often resolved faster.

Investors or companies which do not want any of these options always have the option of resorting to local or international arbitration. Türkiye is a party to many international arbitration agreements.

 

Authors:

Kaan Gök, Atalay Özgürbüz.