Company establishment in Turkey is one of the initially asked
questions by an investor before start up of an investment project.
Even if the establishment procedures are subject to the provisions
of the Turkish Commercial Code ("TCC"), some terms and
conditions may vary from these provisions depending on the
Energy Market as an Investment Sector
As is known, energy market has been one of the promising markets
throughout the recent years in Turkey as well as in many other
countries which has been preferred mostly by the foreign and
domestic investors. According to the statistics, approximately 24 %
of all foreign direct investments in Turkey in the year of 2013
have been in energy market and these rates have been increasing
year by year.
Following factors play an essential role in increase of number
of investments in energy market in Turkey:
Energy demand of Turkey has been in a growth phase since recent
years especially due to industrial developments
It is intended to decrease the energy import dependence of
Turkey by increase of use of renewable energy resources, extention
of which is expected up to 30 % until 2013. Therefore, more
investments in energy market are needed in Turkey.
Turkey has the capacity to become an energy hub due to its
geographical position. In this connection, investments in natural
gas pipeline projects have been made such as TANAP Project which is
ongoing and expected to be completed until 2019
There are several incentives and facilities provided mainly in
renewable energy investments in order to increase the number of
investments in this sector: For instance, feed-in tariffs,
facilitations in land allocation, local equipment support.
Energy market has been opened to competition and private sector
companies to a large extent notably in electricity market.
Privatisations and legislative efforts are ongoing in natural gas
Due to each of above mentioned factors, energy sector attracts
attention of investors in Turkey. As a conclusion of this, the
company establishment comes frequently to the fore.
Company Establishment in General and in Energy Market
In general, an investment starts with a company establishment
excluding the exceptions such as certain type of investments in
renewable energy which have been stated in the related laws and
Within the framework of the New Turkish Commercial Code, company
establishment procedures have been minimized and simplified for
investors. One of the most essential legal reforms has been the
change that enabled the establishment of single-shareholder
companies. Moreover, company establishment has been simplified and
accelerated. The Commercial Code sets forth different terms and
conditions such as capital amount, liabilities for each
If the establishment of an energy company comes into question,
the above mentioned conditions vary from the general principles of
the Commercial Code in several points. According to the legislation
on energy market, only certain company types may operate in energy
market. Moreover, electricity market as well as natural gas market
requires a certain capital amount for each market activity. Apart
from the capital amounts, there are several other essential points
to be considered during the company establishment in order to
operate the intended market activity.
In conclusion, the investment value as well as the market
activity and energy market in which it is intended to operate
(electricity, oil and gas) plays an essential role in company
establishment in energy market. As mentioned above, company
establishment procedures have been accelerated and simplified due
to the legal reforms in commercial and company law notwithstanding
the company's sector which is regarded as an important
development for investors. What is important is only to determine
the energy market activity and to fulfill the conditions required
for company establishment in the relevant market activity.
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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Turkey has amended the Electricity Market Law numbered 6446 to promote use and security of domestic energy resources. Under the amendments, planned capacity mechanisms must give priority to local energy sources.
Turkey's energy regulator previously ruled (decision numbered 5709, dated 30 July 2015) that a total capacity of 2,000 MW would be reserved in the period up until 2020 for wind power pre-license applicants to connect to the grid.
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