This article considers the legal due diligence required for a foreign investment in Türkiye, from the choice of corporate structure to ongoing operations and exit. It examines foreign ownership, capital requirements, corporate documentation, incentives, property acquisition, employment authorisation, investment reporting and dispute resolution. The statutory framework and the judicial authorities discussed in the manuscript are considered alongside the practical allocation of responsibilities between advisers. The central argument is that incorporation does not complete investment due diligence. A legally sustainable structure must also accommodate the investor's governance arrangements, regulated activities, financing, workforce, assets and means of resolving future disputes.
Keywords foreign direct investment, Türkiye, legal due diligence, corporate governance, investment incentives, market entry
Introduction
Foreign investment decisions are rarely governed by a single area of law. A company may be straightforward to incorporate but unsuitable for the investor's intended governance structure. A property may be legally available for acquisition but restricted in a way that affects its intended commercial use. A business model may be permissible under general corporate law but require a sector licence. A foreign executive may be appointed to a company but still require separate authorisation to work in Türkiye.
For this reason, I do not regard company incorporation as the legal starting and finishing point of an investment. The more useful question is whether the proposed structure will continue to work after the investor begins employing personnel, acquiring assets, raising finance, entering commercial contracts, obtaining licences, distributing profits and, ultimately, considering an exit.
Türkiye maintains a generally open foreign investment regime. The principal legislation is Foreign Direct Investment Law No. 4875, which is based on freedom of investment and equal treatment between foreign and domestic investors. The Law also addresses matters including protection against expropriation except in accordance with law and compensation, transfers of investment proceeds, and dispute resolution.1
The openness of the general regime does not eliminate sector regulation, corporate formalities or transaction specific risks. Foreign investment should therefore be considered as a legal structure, not merely as a registration exercise.
Can a Foreign Investor Own a Turkish Company?
As a general rule, yes. Foreign investors are generally entitled to establish companies in Türkiye under the same company law framework applicable to domestic investors. Türkiye's official investment guidance confirms that international investors may establish the company forms provided for under the Turkish Commercial Code and that the conditions for company establishment and share transfers generally apply equally to local and international investors.
The two corporate forms most commonly considered in foreign investments are the joint stock company, Anonim Şirket or A.Ş., and the limited liability company, Limited Şirket or Ltd. Şti.
The choice between them should not be made simply by asking which company can be incorporated most quickly. An investor should consider the expected ownership structure, shareholder rights, financing, management authority, share transfers, admission of future investors, exit planning and whether different share classes or more sophisticated corporate governance arrangements may eventually be required.
Current minimum capital requirements
As of 2026, the statutory minimum capital requirement is TRY 250,000 for a joint stock company (A.Ş.) and TRY 50,000 for a limited liability company (Ltd. Şti.).2
There is also a current transitional issue that existing companies should not overlook. Under the Turkish Commercial Code's provisional rules, companies whose capital remains below the new statutory minimum must increase it by 31 December 2026 or face the statutory consequences prescribed by the legislation.3
For an investor acquiring an existing Turkish company in 2026, this should therefore form part of corporate due diligence.
Subsidiary, Branch or Liaison Office?
A foreign investor does not necessarily need to operate through a newly incorporated subsidiary. A foreign company may establish a branch in Türkiye. A branch, however, is not an independent legal entity separate from the foreign parent. Its activities are connected to the parent company and its legal and tax consequences should be reviewed accordingly.
A liaison office has an entirely different function. A foreign company may establish a liaison office after obtaining the required permission from the Ministry of Industry and Technology, but the liaison office must not conduct commercial activities in Türkiye.4
This distinction matters in practice. If a foreign company intends to invoice customers, generate local revenue or conduct ordinary commercial operations, a liaison office should not be selected merely because it appears administratively simpler.
The legal vehicle should follow the intended business activity.
Foreign Company Documents Require Planning Before Incorporation
International investors often lose time not because Turkish company law is particularly difficult, but because documents issued abroad have not been prepared correctly.
Official investment guidance confirms that corporate documents issued outside Türkiye may need to be notarised and apostilled, or otherwise authenticated through the relevant Turkish consular process. Official Turkish translations and Turkish notarial formalities may also be required.5
For a foreign corporate shareholder, this can include documents establishing the foreign company's existence, corporate authority, shareholder resolutions and powers of attorney.
I therefore recommend preparing the Turkish incorporation document list before foreign directors or shareholders begin obtaining signatures. Correcting an inadequately authenticated corporate document after it has crossed several jurisdictions is considerably less efficient.
Incorporation Is Only the First Regulatory Test
The fact that a company has been successfully registered does not establish that its business model complies with every law applicable to its activities.
Depending on the investment, legal review may extend to competition law, personal data protection under Law No. 6698, environmental regulation, sector licences, product regulation, foreign exchange rules, employment law, intellectual property, consumer law, public procurement rules or industry specific legislation.
The Presidency's official Legal Guide to Investing in Türkiye itself identifies foreign investment protection, corporate structures, labour law, property rights, financing, environmental law, competition, public procurement and personal data protection as matters that investors may need to consider.
Certain industries are subject to special ownership, management or licensing requirements. Türkiye's official investment guidance specifically notes sector specific nationality restrictions in areas including television broadcasting, maritime activities and civil aviation.
The proper sequence is therefore:
identify the activity first, determine the regulatory requirements second, and structure the investment around those requirements third. Doing this in the opposite order can leave the investor with a company that exists legally but cannot operate in the intended manner.
Legal Due Diligence Should Be Designed Around the Investment
Where the investor is purchasing an existing business, acquiring shares or entering a joint venture, due diligence should not consist merely of collecting documents into folders.
The purpose of legal due diligence is to identify matters capable of affecting the investment decision. Corporate ownership and authority should be verified. Material commercial contracts should be reviewed for termination rights, change of control provisions and significant liabilities. Pending litigation and enforcement proceedings should be identified. Licences, permits, intellectual property, employment exposure, financing arrangements, security interests and material assets should be examined according to the nature of the target business.
The significance of a finding should also be explained. Some deficiencies can be corrected before closing. Some justify a contractual warranty or indemnity. Some may affect valuation. Others may be sufficiently serious to change the structure of the transaction or prevent it from proceeding.
An experienced due diligence report should distinguish between these categories rather than present every issue as equally important.
Investment Incentives Must Be Checked Under the Current Regime
Investment incentive rules are particularly sensitive to legislative change. Türkiye's current investment incentive framework was materially reorganised through Presidential Decision No. 9903 dated 29 May 2025 and Communiqué No. 2025/1, which sets out the implementation framework for state aid relating to investments.6
Eligibility depends on factors including the investment's nature, location, scale and relevant programme conditions. An investor should therefore not assume that an incentive described in a previous project, old feasibility report or earlier legal memorandum remains available on the same terms.
Important 2026 reform
The investment environment changed again in June 2026. Law No. 7582, published in Official Gazette No. 33270 on 4 June 2026, introduced a package of investment and tax reforms. One significant development is the Qualified Service Center regime, aimed at multinational groups locating regional or global management, coordination and support functions in Türkiye.
According to the Presidency's official Investment and Finance Office, qualifying centers serving related companies in at least three countries may benefit, subject to the legislative conditions, from a 95 percent deduction on qualifying foreign sourced profits, rising to 100 percent for qualifying centers operating in the Istanbul Financial Center and designated industrial zones.7
For multinational investors considering Türkiye as a regional headquarters or shared services location, this regime should now be part of the structuring analysis.
The key phrase, however, is subject to the legislative conditions. An incentive should never determine an investment structure until eligibility has been confirmed for the particular project.
Real Estate Investment Requires Its Own Due Diligence
Real estate is frequently part of a foreign investment, either as the investment itself or as an operational asset of the business.
But the expression “a foreign investor can buy property in Türkiye” is legally too broad. Different rules apply depending on whether the purchaser is:
a foreign natural person, a company incorporated abroad, or a Turkish company whose shareholders include foreign investors. Under Article 35 of Land Registry Law No. 2644, foreign natural persons may acquire real property subject to the statutory eligibility and limitations. Current rules include a general maximum of 30 hectares per foreign natural person throughout Türkiye and a district based limit under which acquisitions by foreign natural persons cannot exceed 10 percent of the area in the district that is subject to private ownership.8
Companies incorporated abroad are treated differently and may acquire immovable property only within the framework of the relevant special legislation.
Article 36 separately regulates certain Turkish companies with foreign ownership or control.9
Constitutional Court guidance
The 2012 amendments that reshaped the foreign real estate acquisition framework were reviewed by the Turkish Constitutional Court in E. 2012/75, K. 2013/88, dated 10 July 2013.
The official Constitutional Court decision records the challenge to the amended Article 35 and sets out the statutory structure governing foreign acquisition of Turkish real property.10
The current regime is therefore the result of a significant legislative and constitutional development rather than simply an administrative policy change.
Title is only one part of the investigation
Even where the purchaser is legally entitled to acquire the property, legal review should normally address the particular asset. A title search should examine ownership, mortgages, attachments, easements and annotations.
Depending on the investment, counsel should also consider zoning, building permissions, permitted use, development restrictions and whether the property can actually support the investor's planned activity.
This distinction is important. The fact that a client can legally acquire title does not necessarily mean that the property can legally be used for the purpose for which the client intends to buy it.
Foreign Executives and Employees Need Separate Work Authorisation
Establishing or investing in a Turkish company does not automatically give a foreign shareholder, director or employee the right to work in Türkiye.
The principal legislation is International Labour Force Law No. 6735. For an ordinary fixed term work permit, a successful first application may result in a permit valid for up to one year, subject to the employment relationship and statutory conditions. Extensions may be granted for longer periods under the applicable rules.
Work permit assessment is not merely an immigration formality. Current Ministry of Labour criteria address employment levels, financial adequacy and salary requirements, with sector based rules and statutory exemptions.
The criteria were further updated in 2026. For example, certain exemptions concerning employment and financial adequacy became effective on 3 August 2026, and the Ministry continues to maintain specific assessment rules for different categories of employers and foreign personnel.11
This should be considered before the investment timetable assumes that foreign managers or technical personnel can immediately begin working in Türkiye.
E-TUYS and Continuing Foreign Investment Reporting
Foreign investment compliance does not necessarily end when the company is registered. Türkiye's official investment system uses E-TUYS, the Ministry's electronic system for foreign direct investment information.
Companies and branches established by foreign investors use E-TUYS for relevant foreign direct investment information, including activity information, capital data and share transfer data.12
For an acquisition involving an existing foreign capital company, these reporting obligations should be considered in the post closing checklist rather than discovered months later.
Dispute Resolution Should Be Negotiated Before the Investment Becomes a Dispute
Commercial parties understandably devote most of their attention to price, ownership and performance obligations.
The dispute resolution clause is frequently considered at the end.
That is a mistake. For an international investor, counsel should consider governing law, court jurisdiction, arbitration, the seat and institution of arbitration where applicable, interim relief and, critically, where the counterparty's assets are located.
Türkiye is a contracting state to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Türkiye acceded on 2 July 1992 and the Convention entered into force for Türkiye on 30 September 1992, subject to its reciprocity and commercial reservations.13
This gives international investors an established treaty framework for qualifying foreign arbitral awards.
But enforcement begins with a valid dispute resolution clause.
Yargıtay: Arbitration Clauses Must Be Clear
Recent Court of Cassation jurisprudence provides a useful warning for foreign investors drafting cross border commercial contracts. The Ministry of Justice's formal legal publication Adalet Dergisi records the approach of the Court of Cassation that an intention to arbitrate must be expressed clearly and without uncertainty.
Yargıtay General Assembly of Civil Chambers: E. 2023/688, K. 2023/1348, 21 December 2023
The General Assembly stated that because arbitration removes the dispute from the ordinary state court system, the parties' intention to submit the matter to arbitration must be clear and definite.14
Yargıtay 11th Civil Chamber: E. 2023/5030, K. 2024/6919, 30 September 2024
The contract in this case contained inconsistent arbitration provisions. One provision referred to ICC arbitration in Paris, while another referred to a different arbitration structure under separate trade conditions.
The Court found that the arbitration arrangement was not sufficiently clear regarding the place and applicable framework and held that the lower court should not simply have dismissed the proceedings on the arbitration objection.15
A similar principle appears in Yargıtay 11th Civil Chamber, E. 2022/2762, K. 2023/7556, 20 December 2023, where the Court considered the absence of sufficiently complete and certain arbitration intention.16
For a foreign investor, the practical lesson is straightforward. A dispute resolution clause should not be assembled by copying provisions from several unrelated contracts.
The clause should identify one coherent mechanism.
What Should a Foreign Investor Look for When Choosing a Lawyer in Türkiye?
This question deserves particular attention because investment work is broader than company registration. A foreign investor should first determine whether the lawyer has genuine experience with cross border transactions and investment structures, not simply experience incorporating Turkish companies.
The lawyer should be able to identify how corporate law, regulatory rules, real estate, employment, financing, tax considerations and dispute resolution interact.
For an acquisition, the investor should ask who will conduct legal due diligence and who will negotiate the transaction documents. For a regulated investment, counsel should understand the relevant licence or approval process.
For a real estate investment, counsel should be able to distinguish ownership eligibility from title and zoning due diligence. For an international joint venture, the lawyer should be comfortable addressing governance, shareholder protection, exit rights and dispute resolution.
The foreign client should also know who will actually handle the work, what is included in the engagement, how fees and external costs will be structured, what documents must be provided, and whether other specialists will need to be coordinated.
Language is important, but the ability to communicate legal risk is more important. A foreign client needs advice that explains not only what Turkish law says, but also what the rule means for the business decision that the client is about to make.
Professional registration can be independently verified through the official Türkiye Barolar Birliği Baro Levhası / Avukat Arama system. Experienced investment counsel should also be prepared to recommend that an investment be restructured, delayed or not completed when due diligence identifies a material risk.
The lawyer's role is not simply to help the transaction close. The lawyer's role is to help the client understand what it is agreeing to before closing becomes irreversible.
Frequently Asked Questions
Does a foreign investor need a Turkish shareholder to establish a company?
Generally, no. Foreign investors are ordinarily entitled to establish companies under the same corporate framework applicable to domestic investors. Sector specific legislation may nevertheless impose separate ownership, management or licensing rules.
What is the minimum capital required in 2026?
The current statutory minimum is TRY 250,000 for a joint stock company and TRY 50,000 for a limited liability company. Existing companies below the applicable statutory minimum should pay particular attention to the 31 December 2026 capital adjustment deadline.
Can a foreign company use a liaison office to sell products in Türkiye?
No. A liaison office may be established with the appropriate Ministry permission but may not conduct commercial activities in Türkiye.
Can a foreign investor buy real estate in Türkiye?
Often yes, but the legal analysis depends on whether the purchaser is a foreign natural person, a foreign company incorporated abroad or a Turkish company with foreign ownership. Articles 35 and 36 of the Land Registry Law apply different regimes.
Does investing in a Turkish company automatically give me the right to work in Türkiye?
No. Share ownership and permission to work are separate legal issues. Foreign personnel are generally subject to the work permit framework under Law No. 6735 and the Ministry's applicable assessment criteria.
Are investment incentives automatically available to foreign investors?
No. Eligibility depends on the particular investment, programme and conditions in force when the application is made. The incentive regime was significantly reorganised in 2025 and further investment related reforms entered into force in 2026.
Can a foreign arbitral award be enforced in Türkiye?
Qualifying awards may be recognised and enforced under the New York Convention, subject to the Convention's requirements and limited grounds for refusal. Türkiye has been a contracting state since 1992.
Why should the arbitration clause be reviewed by Turkish counsel?
Recent Yargıtay decisions demonstrate that uncertainty or inconsistency concerning the parties' arbitration intention can undermine the effectiveness of the clause. A clear dispute resolution mechanism should therefore be negotiated as part of the transaction, not inserted as generic boilerplate.
How can I verify that a lawyer is licensed in Türkiye?
The Türkiye Barolar Birliği maintains the official Baro Levhası / Avukat Arama system, which permits verification of professional registration.
When should I instruct Turkish investment counsel?
Preferably before signing a binding term sheet, paying a substantial deposit, completing an acquisition, finalising the corporate structure or committing to property or regulatory arrangements.
The earlier counsel becomes involved, the more options remain available.
Conclusion
Türkiye provides a broadly accessible framework for international investment, but the absence of a general foreign investment approval requirement does not make every investment legally simple. The corporate structure must fit the commercial plan. Sector restrictions must be identified. Incentive eligibility must be checked under the legislation actually in force. Property must be examined both for ownership eligibility and legal suitability. Foreign personnel must be authorised to work. Transaction documentation must address governance and exit. Dispute resolution must be drafted with eventual enforcement in mind.
The most serious legal problems in foreign investment are often not caused by obscure legislation. They arise because an important question was asked too late. For that reason, I regard legal due diligence as part of investment strategy rather than as a final document review before closing. A foreign investor should know not only whether a transaction can be completed under Turkish law, but also whether the structure remains legally and commercially workable after the investment has been made.
Bibliography
Legislation and Treaties
Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 1958. United Nations Treaty Collection, status record and Türkiye declarations. https://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXII-1&chapter=22&clang=_en.
Foreign Direct Investment Law No. 4875. https://mevzuat.adalet.gov.tr/mevzuat/103648.
International Labour Force Law No. 6735. Official work-permit guidance: https://calismaizni.csgb.gov.tr/sikca-sorulan-sorular/.
Land Registry Law No. 2644. https://mevzuat.adalet.gov.tr/mevzuat/104521.
Law No. 6302 amending the foreign real estate acquisition framework. Official legislative database: https://www.mevzuat.gov.tr/.
Law No. 7582. Official legislative database: https://www.mevzuat.gov.tr/.
Ministry of Industry and Technology Communiqué No. 2025/1. Official legislative database: https://www.mevzuat.gov.tr/.
Personal Data Protection Law No. 6698. https://www.aile.gov.tr/kvkk/mevzuat/. Presidential Decision No. 7887. Official legislative database: https://www.mevzuat.gov.tr/.
Presidential Decision No. 9903 on State Aids in Investments, dated 29 May 2025. Official legislative database: https://www.mevzuat.gov.tr/.
Turkish Commercial Code No. 6102. https://mevzuat.adalet.gov.tr/mevzuat/103039.
Judicial Decisions
Constitutional Court, E. 2012/75, K. 2013/88, 10 July 2013, Official Gazette No. 29071, 25 July 2014. Official court publications: https://www.anayasa.gov.tr/.
Yargıtay 11th Civil Chamber, E. 2022/2762, K. 2023/7556, 20 December 2023. Reported and analysed in the Republic of Türkiye Ministry of Justice, Adalet Dergisi, Issue 75, 2025. https://karararama.yargitay.gov.tr/.
Yargıtay 11th Civil Chamber, E. 2023/5030, K. 2024/6919, 30 September 2024. https://karararama.yargitay.gov.tr/.
Yargıtay General Assembly of Civil Chambers, E. 2023/688, K. 2023/1348, 21 December 2023. https://karararama.yargitay.gov.tr/.
Institutional and Official Materials
General Directorate of Land Registry and Cadastre official foreign property guidance. Official legislation and publications: https://www.tkgm.gov.tr/.
Ministry of Labour and Social Security, Directorate General of International Labour Force, official work permit types and current evaluation criteria. Official work-permit guidance: https://calismaizni.csgb.gov.tr/sikca-sorulan-sorular/.
Ministry of Trade. Company formation guidance. Official publications: https://www.ticaret.gov.tr/.
Presidency of the Republic of Türkiye Investment and Finance Office, official Establishing a Business guide. Official investment guide: https://www.invest.gov.tr/en/investmentguide/pages/establishing-a-business.aspx.
UNCITRAL official treaty status. Türkiye accession 2 July 1992, entry into force 30 September 1992. Official treaty publications: https://uncitral.un.org/.
Footnotes
1 Foreign Direct Investment Law No. 4875, particularly Article 3 concerning freedom to invest, equal treatment, expropriation, transfers and dispute resolution. Presidency of the Republic of Türkiye Investment and Finance Office, official text of the Foreign Direct Investment Law. Official source.
2 Turkish Commercial Code No. 6102, Articles 332 and 580; Presidential Decision No. 7887; Turkish Commercial Code Provisional Article 15. Ministry of Trade current company guidance confirms TRY 250,000 and TRY 50,000 minimum capital amounts and the 31 December 2026 transitional deadline. Official source.
3 Turkish Commercial Code No. 6102, Articles 332 and 580; Presidential Decision No. 7887; Turkish Commercial Code Provisional Article 15. Ministry of Trade current company guidance confirms TRY 250,000 and TRY 50,000 minimum capital amounts and the 31 December 2026 transitional deadline. Official source.
4 Presidency of the Republic of Türkiye Investment and Finance Office, official Establishing a Business guide, including company establishment, branches, liaison offices, MERSIS, foreign corporate documents and E-TUYS reporting.
5 Presidency of the Republic of Türkiye Investment and Finance Office, official Establishing a Business guide, including company establishment, branches, liaison offices, MERSIS, foreign corporate documents and E-TUYS reporting.
6 Presidential Decision No. 9903 on State Aids in Investments, dated 29 May 2025; Ministry of Industry and Technology Communiqué No. 2025/1.
7 Law No. 7582, Official Gazette No. 33270, 4 June 2026; Presidency of the Republic of Türkiye Investment and Finance Office, official summary of the 2026 investment reform package and Qualified Service Center regime.
8 Land Registry Law No. 2644, Articles 35 and 36; Law No. 6302 dated 3 May 2012; General Directorate of Land Registry and Cadastre official foreign property guidance. Official source.
9 Land Registry Law No. 2644, Articles 35 and 36; Law No. 6302 dated 3 May 2012; General Directorate of Land Registry and Cadastre official foreign property guidance. Official source.
10 Constitutional Court, E. 2012/75, K. 2013/88, 10 July 2013, Official Gazette No. 29071, 25 July 2014.
11 International Labour Force Law No. 6735; Ministry of Labour and Social Security, Directorate General of International Labour Force, official work permit types and current evaluation criteria, including 2026 updates.
12 Presidency of the Republic of Türkiye Investment and Finance Office, official Establishing a Business guide, including company establishment, branches, liaison offices, MERSIS, foreign corporate documents and E-TUYS reporting.
13 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 1958; UNCITRAL official treaty status. Türkiye accession 2 July 1992, entry into force 30 September 1992.
14 Yargıtay General Assembly of Civil Chambers, E. 2023/688, K. 2023/1348, 21 December 2023; Yargıtay 11th Civil Chamber, E. 2023/5030, K. 2024/6919, 30 September 2024; Yargıtay 11th Civil Chamber, E. 2022/2762, 2023/7556, 20 December 2023. Reported and analysed in the Republic of Türkiye Ministry of Justice, Adalet Dergisi, Issue 75, 2025. Official decision database.
15 Yargıtay General Assembly of Civil Chambers, E. 2023/688, K. 2023/1348, 21 December 2023; Yargıtay 11th Civil Chamber, E. 2023/5030, K. 2024/6919, 30 September 2024; Yargıtay 11th Civil Chamber, E. 2022/2762, 2023/7556, 20 December 2023. Reported and analysed in the Republic of Türkiye Ministry of Justice, Adalet Dergisi, Issue 75, 2025. Official decision database.
16 Yargıtay General Assembly of Civil Chambers, E. 2023/688, K. 2023/1348, 21 December 2023; Yargıtay 11th Civil Chamber, E. 2023/5030, K. 2024/6919, 30 September 2024; Yargıtay 11th Civil Chamber, E. 2022/2762, 2023/7556, 20 December 2023. Reported and analysed in the Republic of Türkiye Ministry of Justice, Adalet Dergisi, Issue 75, 2025. Official decision database.
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.
