The aviation industry has grown up in Turkey after 2002
with the liberalization policies in the market. This potential has
attracted the foreign investment to this fast-growing industry even
the rules and regulations allows to the certain limits. Not only
the airliners, air taxi operators, helicopter companies have been
focused on aviation related projects in several times and
In this article you will find information on
restrictions to foreign ownership of an aviation company in
In parallel to the Turkish Civil Aviation Law, the
Regulation on Commercial Air Transportation defines the
procedures and principles for individuals and legal persons to
perform commercial air transport airline, air cargo and air taxi
operations and granting of permits and operation licenses in
As the requirement of aviation corporate law, passenger
transporting operators whom intend to carry out operations with
more than twenty seats aircrafts and cargo operators must be
established in form of joint stock company and maintain it through
operations. Operators carrying out or engaged in aviation business
with more than twenty seats aircrafts shall not refer in articles
of association to any other scope of business not related to
aerospace and aviation businesses.
The individual and legal person founding partners, except for
those whom shares are traded on the Istanbul Stock Exchange, the
individual or legal person shareholders and the individuals whom
are indirect shareholders of legal person shareholder, legal
representatives of an operator are not allowed if i) declared
insolvent or bankrupted during commercial air transportation
operations activities, ii) acted as direct or direct shareholder or
board member in the last two years or accountable manager in the
last one year at any airline company operator's certificate
cancelled, iii) except for those who committed negligent offenses
or sentenced a short-term alternative sanctions to imprisonment
other than the following crimes or has been suspended, jeopardized
national security or public order and punished for simple or
qualified embezzlement, extortion, bribery, theft, fraud, forgery,
breach of trust, fraudulent bankruptcy, infamous crimes, such as
trafficking, smuggling and excise offenses other than using the
official bidding or purchasing rigging, money laundering or the
crimes committed against the state, disclosure of state secrets,
the state against the sovereignty and dignity of the organs of
crimes, crimes against state security, constitutional order, and
this crimes against the operation of the order, crimes against
national defense, espionage, crimes against relations with foreign
countries, the abduction or detention of vehicles.
Minimum 51% of the shares of an operator should be nominative
and the majority of those whom are
i) authorized to represent and manage the company and;
ii) majority shareholders must be Turkish.
However, the provisions of the Law on Privatization, Law
No.4046, dated 24.11.1994 are reserved..
Transfer of nominative shares or increase in share ratio of a
shareholder in operators having preliminary permit or operating
license subject to prior permission of TCAA ("Turkish Civil
If it is deemed necessary by the TCAA; the indirect shareholding
capital in operators carrying out with more than twenty seats
aircrafts, shareholders or structure of legal persons intended to
take over the shares, and legal entity shareholder of those, if
any, are determined in sequence until it reaches the
The air taxi operators to carry out operations with aircrafts
having up to nineteen seats require authorization by TCAA. Those
operators should have at least one aircraft in fleet to be
registered in the Turkish Civil Aircraft Registry. Operators not to
exceed total of two millions USD are obliged to have all cash
paid-in capital, per aircraft, for each of at least two hundred
thousand USD. Letter of guarantee is not requested from such
In the light of the aforementioned regulations, the primary
obstacle against 100% foreign ownership of an aviation company is
the requirement of minimum 51% Turkish shares and Turkish majority
in management of the company. However, there is certain gap in law
for operators whom intend to carry out operations with less than
twenty seats aircrafts since the regulation does not define the
corporate requirements for those and TCAA's authority to
investigate the indirect capital shareholding.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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