Commercial law in Turkey: company formation, foreign shareholders and commercial disputes

Doing business in Turkey: the legal framework

Turkish commercial law governs businesses, merchants, commercial companies, negotiable instruments (cheques, promissory notes and bills of exchange) and commercial transactions. Its main source is the Turkish Commercial Code No. 6102 (TTK). The Code of Obligations No. 6098 applies to companies' contracts and obligations, and the Enforcement and Bankruptcy Law No. 2004 to insolvency and restructuring.

Merchants (tacir), which include all commercial companies, are subject to special duties that foreign investors should be aware of:

• Prudent business person standard: A merchant must act as a prudent business person in all commercial activities (TTK, Art. 18(2)). Courts apply a higher standard of care to merchants than to individuals.
• Formal notices: Notices between merchants concerning default, termination or rescission must be sent through a notary, registered letter, telegram, or registered electronic mail (KEP) with a secure electronic signature (Art. 18(3)).
• Penalty clauses: A merchant cannot ask the court to reduce a contractual penalty on the ground that it is excessive (Art. 22).
• Books and registration: Obligations to keep commercial books and to register with the trade registry.

Company types: LLC or joint stock company?

The Commercial Code provides for five types of commercial company: general partnership, limited partnership, joint stock company, limited liability company and cooperative. In practice, most companies, including those set up by foreign investors, are limited liability or joint stock companies:

The right choice depends on the number of shareholders, capital needs, plans to bring in investors and how freely shares should be transferable. A limited liability company is often preferred for small and medium-sized businesses; a joint stock company is more suitable where outside investment or a more flexible shareholding structure is planned. Foreign companies may alternatively open a branch or a liaison office in Turkey, each with its own requirements and limitations.

How to set up a company in Turkey: step by step

1. PreparationThe company type, trade name, scope of activity (NACE codes), registered address, capital and shareholding structure are decided. The availability of the trade name is checked.
2. Tax numbers and documents for foreign shareholdersA Turkish tax identification number is obtained for each foreign shareholder. Passports of foreign individuals, or certificates of good standing for foreign companies, are apostilled and translated into Turkish.
3. MERSİS applicationThe articles of association are prepared and the formation application is created on MERSİS, the Ministry of Trade's Central Registry Record System.
4. Signatures and capitalThe articles of association are signed at the trade registry office or before a notary. Where required by law, part of the capital is deposited in a bank and the Competition Authority fee is paid.
5. RegistrationThe trade registry examines the documents, registers the company and publishes the formation in the Turkish Trade Registry Gazette. The company acquires legal personality upon registration.
6. Post-formation stepsRegistration with the tax office, certification of the opening of commercial books, social security workplace registration and any licences or permits required for the activity are completed.

The articles of association should be tailored to the company's needs. Restrictions on share transfers, the conditions for a shareholder's exit, management arrangements and meeting quorums largely determine how future disputes will be resolved. A separate shareholders' agreement can regulate additional matters between the shareholders.

Setting up a company as a foreign investor

Under the Foreign Direct Investment Law No. 4875, foreign investors are, unless otherwise provided by law, subject to equal treatment with domestic investors in setting up companies and holding shares in Turkey. A foreign individual or a foreign company can be the sole shareholder of a limited liability or joint stock company. The process usually requires:

• The passport of a foreign individual shareholder, or the certificate of activity of a foreign corporate shareholder, apostilled and translated by a sworn translator
• A Turkish tax identification number for each foreign shareholder
• A notarised power of attorney for shareholders who are not in Turkey
• Compliance with the reporting obligations for foreign capital after formation

Opening a corporate bank account, appointing a certified accountant (mali müşavir) and understanding Turkish tax and social security obligations are practical steps that should be planned from the start. Tax issues are covered in our tax law guide.

Share transfers

In a limited liability company, shares are transferred by a written transfer agreement with notarised signatures. Unless the articles provide otherwise, the transfer requires the approval of the shareholders' general assembly, and it must be entered in the share register and registered with the trade registry (TTK, Art. 595, 598). The general assembly can refuse approval without giving reasons.

In a joint stock company, share transfers are generally freer. Registered shares are transferred by endorsement and delivery, although the articles may make the transfer subject to board approval (Art. 492–493). Bearer shares are transferred by delivery, subject to statutory notification obligations.

When acquiring shares, the company's liabilities, including tax and social security debts for which shareholders and managers may be held responsible, should be examined as part of due diligence.

Shareholder disputes and director liability

• Annulment of general assembly resolutions: Resolutions contrary to the law, the articles of association or good faith can be challenged by shareholders who attended and recorded their dissent, shareholders unlawfully prevented from attending, and the board of directors, within three months of the resolution, before the commercial court of the company's registered seat (Art. 445–446). Resolutions that remove inalienable shareholder rights or disrupt the company's basic structure are null and void and can be challenged without a time limit (Art. 447). These rules apply by analogy to limited liability companies (Art. 622).
• Exit and exclusion: In a limited liability company, a shareholder can sue to exit the company for just cause, and a shareholder can be excluded for reasons in the articles or for just cause (Art. 638–640). The departing shareholder is paid the real value of their shares.
• Director liability: Board members and managers who breach their duties under the law or the articles through their fault are liable to the company, the shareholders and the company's creditors for the resulting damage (Art. 553).

Cheques and promissory notes

Cheques, promissory notes and bills of exchange are widely used in Turkish commerce as means of payment and credit. A document lacking the mandatory elements required by law is not a negotiable instrument. Claims based on these instruments can be pursued through a special, fast enforcement procedure, in which the debtor has only five days to object (see our enforcement and bankruptcy guide).

If a cheque is not presented within the period, the holder may lose recourse against endorsers and the drawer. Claims on cheques become time-barred six months after the end of the presentation period (Art. 814); claims against the maker of a promissory note become time-barred three years from maturity.

Unfair competition and restructuring

Deceptive conduct or conduct contrary to good faith that affects relations between competitors or between suppliers and customers is unfair competition (TTK, Art. 54–63), including creating confusion with another's goods or business, disparaging competitors, misleading advertising, inducing employees to breach their contracts and disclosing trade secrets. The injured party can seek a declaration, an injunction, removal of the consequences and, if there is fault, damages, within one year of learning of the act and in any case within three years.

A debtor unable to pay its debts on time, or at risk of being unable to do so, can apply for concordat (konkordato), a court-approved arrangement with creditors to restructure debts through extended maturities or reductions (Enforcement and Bankruptcy Law, Art. 285 et seq.). Creditors of a company in concordat should take part in the process and file their claims on time.

Mandatory mediation, courts and arbitration

Commercial cases are generally heard by the commercial courts of first instance (TTK, Art. 4–5). In commercial cases concerning receivables and compensation for payment of a sum of money, applying to a mediator before filing a lawsuit is a precondition (Art. 5/A). Enforcement proceedings based on negotiable instruments are not subject to this requirement, but mediation is required before an action to set aside an objection.

Parties to commercial contracts, particularly international ones, may also agree to resolve disputes by arbitration. Arbitration and the enforcement of foreign arbitral awards in Turkey under the 1958 New York Convention are covered in our mediation and arbitration guide; contract drafting is covered in our contracts and obligations guide.

Key time limits

Documents usually required

• For formation: shareholders' identity documents, draft articles of association, address details, apostilled documents for foreign shareholders
• For share transfers: current trade registry gazettes, share register, general assembly resolution, transfer agreement
• For annulment actions: meeting invitation, attendance list, minutes and record of dissent
• For commercial receivables: contracts, invoices, delivery notes, account statements, KEP or notarial notices
• For negotiable instruments: the original cheque or note, presentation records, bank's dishonour endorsement

Relevant legislation

Turkish legislation is published (in Turkish) at mevzuat.gov.tr; company formation and trade registry procedures are carried out through MERSİS:

• Turkish Commercial Code No. 6102 — Art. 4–5/A, 18, 22, 54–63, 329 et seq. (joint stock companies), 573 et seq. (limited liability companies), 776 et seq. (promissory notes), 780 et seq. (cheques)
• Foreign Direct Investment Law No. 4875
• Cheque Law No. 5941
• Enforcement and Bankruptcy Law No. 2004 — Art. 167–170, 285 et seq.
• Turkish Code of Obligations No. 6098

Commercial Law: topics

The main topics within Turkish commercial law are listed below. Detailed guides for each are in preparation.

• Company formation (LLC and joint stock company)
• Company formation by foreigners
• Share transfers
• Annulment of general assembly resolutions
• Concordat
• Unfair competition
• Cheques and promissory notes
• Commercial contracts

Frequently asked questions about company formation and commercial law in Turkey

This article is for general information only and does not constitute legal advice. Please consult a lawyer about your specific situation. Legislation and court practice change over time, so check the current legislation before taking any step. Last updated: 7 October 2026