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Buying Shares in Turkey

Buying shares in Turkey requires proper legal due diligence before the transaction is signed. A share purchase may appear simpler than acquiring individual business assets, but the buyer is acquiring an interest in an existing company with its contracts, debts, disputes, tax history, employment obligations and other liabilities. Many of these risks are not visible during initial discussions with the seller.

This guide focuses on legal due diligence and the main issues foreign investors should examine before acquiring shares in a Turkish company. It is intended for international investors, entrepreneurs and business owners considering an acquisition or minority investment in Turkey.

Blay’s Office assists international clients with Turkish corporate transactions, investments and contracts. Kubilay Kilic, English-speaking lawyer in Turkey and founder of Blay’s Office, advises on transaction structure, company verification, contractual protection and coordination with local accountants or other specialists where required.

Key points in 2 minutes
Buying shares means acquiring an interest in a company that may already have liabilities. Due diligence is designed to identify those risks before completion.
Priority checks include the seller’s title to the shares, what is actually being acquired, debts, litigation, material contracts and any transfer restrictions.
Articles of association, shareholders’ agreements and sector-specific approvals may affect whether and how the transaction can proceed.
Substantial payments should not be made without a clear contractual structure, traceable banking evidence and appropriate protection such as conditions precedent, retention or escrow where suitable.
International investors should also prepare for banking, tax, translation, authority, source-of-funds and compliance issues.

What are you actually buying: shares, control and liabilities?

In Turkey, a share acquisition may involve interests in a limited şirket, meaning a Turkish limited liability company, or shares in an anonim şirket, meaning a Turkish joint-stock company. The legal rules are not identical. Transfer formalities, enforceability, corporate approvals, internal restrictions and governance rights may differ according to the company type and its constitutional documents.

The underlying principle is the same: by acquiring shares, the buyer becomes a shareholder of an existing legal entity. Contracts, tax history, employee relationships, bank facilities, disputes and previous business decisions remain within that company. Even where the investor’s personal liability is limited under the applicable corporate structure, the economic value of the investment can still be affected by liabilities inside the company.

A common mistake is to treat a share purchase as if the buyer were acquiring a clean collection of business assets. If the company has entered into unfavourable contracts, accumulated tax or social security exposure, guaranteed third-party obligations or become involved in litigation, those issues generally remain with the company after the shares change hands.

The buyer should therefore distinguish four separate questions: price, meaning what is being paid; value, meaning what the business is actually worth; protection, meaning the contractual remedies available if undisclosed liabilities emerge; and control, meaning the voting, information, veto and governance rights obtained through the investment.

Due diligence: a structured legal, financial, tax, employment, compliance, real estate and intellectual property review conducted before the transaction.
Liabilities: debts, risks and obligations, including those that have not yet been quantified, which may affect the company after the purchase.
Governance: the rules determining who can make decisions, who can bind the company and what internal protections exist.
Seller protection package: representations, warranties, indemnities, escrow, retention, price adjustment and conditions precedent negotiated in the transaction documents.

What investors often assume and what happens in practice

What investors often assume: if a company has operated for several years, employs staff, has offices and issues invoices, the business must be financially and legally sound. A foreign investor may also assume that a public authority, notary or registration office will review the entire commercial transaction before the shares are transferred.

What happens in practice: responsibility for investigating the company and structuring the acquisition falls largely on the buyer and the buyer’s advisers. The seller may provide incomplete records. Material risks may not appear unless targeted questions are asked. Commercial leases, guarantees, litigation, shareholder arrangements, tax exposure or termination rights in important contracts may sit outside the initial presentation provided to the buyer.

Due diligence is therefore both a negotiation tool and a risk-control tool. Its findings can affect the price, payment timetable, warranties, closing conditions and even the decision whether to proceed. The review also helps prepare for the period immediately after completion, including access to bank accounts, supplier relationships, employment compliance, intellectual property and governance changes.

For a minority investor, this process can be even more significant. A shareholder who does not control the company may have fewer practical options after completion if problems later emerge. Information rights, veto rights, board representation and exit mechanisms should therefore be considered before the investment is made.

What often blocks a transaction in practice
The seller refuses access to tax, employment or contractual records on confidentiality grounds without offering a controlled data room or NDA process.
Signing authority is unclear. The parties cannot establish who may bind the company, who must approve the transfer or who actually owns the shares.
Potential liabilities exist but cannot yet be quantified, such as litigation, possible assessments, penalties or contractual claims.
The company’s activity depends heavily on one customer, supplier, licence or authorisation.
A third-party consent may be required before the transaction can be completed or before an important contract remains effective after a change of control.

Cross-border issues for foreign investors

An investor based outside Turkey faces two parallel realities. The corporate transaction itself is primarily governed by Turkish law, Turkish company rules and the applicable registration formalities. At the same time, the investment may create consequences in the investor’s country of residence concerning banking, personal taxation, reporting, source of funds, dividends or later disposal proceeds.

Without addressing individual tax treatment, one practical rule applies across most cross-border transactions: documents and financial flows should be consistent and traceable. The investor should retain contracts, invoices, payment evidence, proof of the agreed price, identification records and supporting documents showing the economic purpose of the transaction. Banks and intermediaries may request this information under KYC and AML procedures.

Language also matters. The parties may negotiate in English or another language, but the Turkish version of corporate documents and the formal requirements applicable in Turkey must still be understood. Where bilingual contracts are used, the agreement should identify which version prevails in the event of inconsistency and how translations are treated.

If the investment is connected with relocation to Turkey, residence or employment issues should also be considered early. An ikamet is a Turkish residence permit. It should not be confused with a work permit, company ownership or citizenship. The relevant immigration route depends on the investor’s circumstances and should be reviewed separately.

Traceability: retain complete transfer evidence and documentation explaining the investment. See evidence to retain when transferring money to Turkey.
Bilingual contracts: identify the governing version and control the translation process.
Banking: anticipate KYC and AML requests and possible internal approval delays.
Tax treatment of payments: seek advice where dividends or later transfers of funds may create tax consequences. See taxation of dividends in Turkey.

Who may need to be consulted?
Your bank in your home country or country of residence concerning source-of-funds and compliance documents.
A tax adviser in your country of residence concerning reporting obligations, dividends, capital gains and other tax consequences.
The relevant Turkish authorities or local advisers if the target company operates in a regulated sector or requires specific licences.

Essential legal and corporate due diligence before signing

The essential legal review should answer a practical question: can this company be transferred and operated in a way that matches the buyer’s project without disproportionate legal risk? The first layer is corporate. The buyer should establish the company’s exact identity, current ownership, authorised signatories, articles of association, corporate history and any restrictions affecting a transfer of shares.

The second layer compares the company’s legal records with its actual business. Does the business being presented correspond to the company shown in the commercial registry? Are the premises leased by that company? Are employees employed by the correct entity? Are customer contracts signed in its name? Are intellectual property rights actually owned by the company?

The third layer identifies potential red flags: litigation, tax or social security exposure, security granted to third parties, dependence on licences, material customer concentration, termination rights, personal guarantees, related-party arrangements and other obligations that could reduce the value of the investment.

A proportionate due diligence does not necessarily mean auditing every historical document. The scope should reflect the transaction size, business model, sector and level of control being acquired. A targeted review should still identify issues capable of changing the investment decision or the terms of the contract.

If a critical point cannot be resolved, the buyer should consider whether the transaction needs a contractual solution before moving forward. Depending on the issue, this may involve a condition precedent, price adjustment, escrow, retention or enhanced warranty. Our broader guide on buying a business in Turkey and what to check before signing addresses the wider acquisition process.

Corporate and registry: commercial registry records, current articles of association, amendment history, shareholding structure, directors or managers, signature authorities and relevant corporate resolutions.
Transferability: restrictions in the articles, shareholders’ agreements, pre-emption rights, approval rights, anti-transfer clauses and voting thresholds.
Material contracts: commercial lease, major customer contracts, suppliers, distribution, franchise, licences, IT contracts and guarantees.
Litigation and potential disputes: court proceedings, formal notices, enforcement proceedings, employee claims and contractual penalties.
Intellectual property: trademarks, domain names, software rights, copyright, confidentiality obligations and non-compete arrangements where relevant.
Regulatory position: licences, permits and professional registrations required for the target company’s activity. See our guide on regulated sectors for foreign investors in Turkey.

Financial, tax and employment due diligence

Financial due diligence should focus on the quality of the numbers, not simply the volume of financial information provided. A company may report healthy revenue while remaining exposed to a single customer, weak margins, overstated stock, doubtful receivables or obligations that do not appear clearly in ordinary management reports.

Past tax or social security irregularities may also lead to future assessments, penalties or disputes. The exact exposure may not always be known before completion. The buyer’s objective is therefore to reduce uncertainty by reviewing relevant declarations, identifying previous audits or disputes and confirming whether key obligations appear to have been paid.

Employment matters are frequently underestimated. The buyer should understand who works for the company, under what contractual terms, what compensation arrangements apply and whether claims or termination liabilities may exist. The company may also use contractors or freelancers whose actual working relationship could require further review.

Where the company processes personal data, compliance issues may also affect the investment. Customer databases, patient records, marketing information and employee data can create contractual, regulatory and reputational exposure. Due diligence can therefore provide the basis for a post-closing remediation plan as well as a pre-closing risk assessment.

Accounts: available financial statements, general ledger, sales consistency, tax entries, provisions, debts and receivables.
Banking: bank accounts, authorised signatories, loans, guarantees, security interests and covenants where relevant.
Tax: filing history, previous audits, disputes and consistency between invoicing and collections.
Employment: employee list, employment contracts, compensation, bonuses, working time, disciplinary matters, disputes and status of senior management.
Receivables: quality and solvency of major debtors where the company’s value depends heavily on outstanding receivables. See checking debtor solvency in Turkey.

Step-by-step process for securing a share purchase

The safer sequence is not “verbal agreement followed by immediate signature”. The parties should first establish the scope of the proposed investment, access to information and the conditions under which the transaction may proceed. The conclusions of the due diligence can then be converted into contractual protection.

The process may begin with a letter of intent or term sheet, depending on the transaction. It can address the percentage being acquired, timetable, confidentiality, possible exclusivity and the fact that completion remains subject to satisfactory due diligence or other agreed conditions.

The next stage is the data room and question process. Documents are provided, reviewed and followed by targeted questions. The buyer then identifies which findings affect price, structure, warranties, conditions precedent or whether the transaction should proceed at all.

The share purchase agreement should deal with the purchase price, payment structure, warranties, conditions precedent and any post-signing obligations. After completion, the parties may also need to update management appointments, signature authorities, bank mandates, contractual notifications and internal access rights.

Minority acquisitions require particular attention to future governance. Information rights, reserved matters, veto rights and exit provisions are far easier to negotiate before the investor pays the purchase price than after entry into the company.

Step 1: transaction framework, confidentiality, scope, timetable and due diligence conditions.
Step 2: document collection and review, including corporate, contracts, tax, employment, litigation, IP and compliance.
Step 3: risk report and transaction strategy, identifying deal-breakers, negotiable issues and corrective measures.
Step 4: drafting and negotiation of the share purchase agreement, warranties, conditions precedent and payment protection.
Step 5: closing, payment, share transfer formalities, governance changes and banking authorities.
Step 6: post-closing compliance, contractual notifications and operational integration.

For payment protection, traceability is central. Bank transfers, instructions and supporting documents should be retained. See also protecting payments in Turkey and using an intermediary in Turkey where a third party is involved in the transaction.

Common mistakes
Treating a commercial promise as if it were a complete and protective legal agreement.
Paying a deposit without a clear condition precedent, escrow arrangement or documented purpose for the payment.
Failing to check transfer restrictions in the articles of association or shareholders’ agreement.
Ignoring the commercial lease and material contracts even though the company may depend on them.
Taking a minority position without information rights, governance protection or an exit mechanism.

Document checklist: what should the buyer request?

The quality of a due diligence exercise often depends on the buyer’s ability to obtain reliable documentation. The seller should receive a structured request list, followed by additional requests where the first documents reveal new issues.

A data room does not need to be technically complex. A secure shared folder may be enough for a smaller transaction, provided the information is organised into corporate, contracts, finance, tax and employment, litigation, intellectual property, compliance and real estate sections.

The buyer may also consider asking the seller to confirm that the materials provided are complete and accurate to the seller’s knowledge, subject to the wording ultimately agreed in the transaction documents. Where information is sensitive, a properly drafted non-disclosure agreement can facilitate access while protecting confidentiality.

Critical information should not be accepted solely through undated lists, isolated screenshots or informal emails. Where proportionate, the buyer should seek dated, signed or official records. Important points such as trademark ownership, bank debt or significant litigation may justify cross-checking against another source or professional confirmation.

For a first corporate verification, see how to check whether a company is active in Turkey.

Document checklist
Corporate: current articles, amendment history, shareholding structure, signature authorities, relevant shareholder resolutions and shareholders’ agreement if one exists.
Contracts: lease, major customer and supplier agreements, distribution or franchise arrangements, licences, service contracts, insurance and guarantees.
Tax and employment: principal filings and supporting records, employee list, employment contracts, claims, sanctions and previous audits where relevant.
Litigation: claims, court decisions, settlements, formal notices and enforcement proceedings.
Intellectual property: trademarks, domain names, software, IT agreements and confidentiality arrangements.

Contract clauses that protect the buyer

Due diligence only becomes useful if the findings are reflected in the transaction documents. The main contractual protections usually concern representations and warranties, conditions precedent and purchase price mechanisms.

Seller representations and warranties may address ownership of the shares, absence of undisclosed security, accuracy of financial information, tax and employment compliance, absence of undisclosed litigation and validity of material contracts. The exact wording and scope should reflect the transaction and findings of the review.

Conditions precedent may require shareholder approval, bank consent, landlord consent, regulatory approval, correction of corporate records or settlement of specified liabilities before closing occurs.

The purchase price can also be structured to reflect uncertainty. Depending on the transaction, the parties may negotiate an adjustment, earn-out, retention or escrow mechanism. If a specific liability has been identified but cannot yet be quantified, part of the consideration may be treated differently until the risk is resolved.

Where the buyer does not acquire 100% of the company, governance becomes part of the investment protection. The shareholders’ arrangements may need to cover veto rights, reserved decisions, information access, dividend policy, restrictions on competing activities and exit rights. See shareholders’ agreements in Turkey and shareholder disputes in Turkey.

Liability protection: define covered matters, relevant periods, evidential requirements, caps, thresholds and exclusions where appropriate.
Escrow or retention: may be considered where an identified risk cannot yet be quantified.
Conditions precedent: approvals, third-party consents, document correction or settlement of specified liabilities.
Access and control: banking powers, dual signatures, budgets, reserved decisions and periodic reporting.

Practical examples of how due diligence changes a deal

Example 1: an investor plans to acquire a majority stake in a service company that appears profitable. The review shows that most revenue comes from two customers whose contracts can be terminated relatively easily. The company’s commercial lease is also close to expiry, with no secure renewal. The investor may decide to renegotiate the purchase price or make completion conditional on obtaining stronger lease protection and confirmation concerning the key customer relationships.

The transaction may still proceed, but the risk is identified and addressed rather than discovered after closing.

Example 2: an investor intends to acquire a minority interest in a trading company and expects regular dividends. The review shows that management has broad discretion, dividend policy is not clearly controlled and related-party arrangements may affect profitability. The investor may make completion conditional on a shareholders’ agreement providing stronger information rights, reserved matters and an exit mechanism.

In that situation, due diligence does not simply produce a “yes” or “no” answer. It identifies the legal structure required to make the investment acceptable to the buyer.

How to organise the transaction file

A share acquisition should be managed as a project. Start with a clear chronology: first discussions, offer, documents received, questions raised, seller responses, contract versions and unresolved points. Documents should then be classified by subject and retained in dated versions.

For payments, retain bank transfer evidence, payment instructions, receipts and documents explaining the reason for each transaction. If documents are issued outside Turkey, formalities such as apostille, legalisation or translation may be required depending on the document and intended use. These requirements should be confirmed before a closing date is fixed.

The buyer should also identify the key people involved in the transaction: seller, accountant, legal adviser, bank, landlord and strategic commercial partners where relevant. A business acquisition is rarely limited to a single buyer-seller relationship.

Important information should be converted into documentary evidence or contractual language. If a point affects the buyer’s decision, a telephone assurance should not remain only a telephone assurance. It should be confirmed in writing and, where necessary, incorporated into the final agreement.

What due diligence changes for the investor

A properly structured review should allow the investor to choose between three rational outcomes: buy, buy on different terms or do not buy.

“Buy on different terms” is often the practical result. The opportunity remains, but the contractual structure changes how the risk is allocated. The parties may use warranties, escrow, conditions precedent, purchase price adjustments or stronger governance rights.

For an entrepreneur entering the Turkish market, this approach can also reduce the risk of becoming operationally blocked after closing because bank access is unavailable, key agreements cannot continue, a shareholder dispute emerges or a liability appears that was not identified beforehand.

For a minority investor, the period before closing is also the main opportunity to negotiate information rights, governance protection and an exit route. Once the investment has been made, obtaining those rights may become much more difficult.

A well-organised transaction file can also assist with banks, co-investors and business partners. Clear documents and a coherent explanation of the investment may make compliance and internal approvals easier to manage.

International investment, financial flows and immigration

Cross-border transactions often become difficult at the interfaces between different systems: bank transfers, opening accounts, source-of-funds checks, company documents and coordination between advisers. Each transfer of funds and each change in control should be capable of being explained through supporting documents.

A foreign investor may therefore prepare a compliance file containing identification, source-of-funds evidence, explanation of the investment, transaction documents and payment records. This information may be useful both in Turkey and in the investor’s country of residence.

If the buyer invests through a holding company or another corporate structure, the appropriate arrangement should be reviewed separately with legal and tax advisers. The consequences depend on residence, nationality, ownership structure, dividend plans, future sale strategy and other circumstances.

If the investment is part of a relocation plan, the relationship with an ikamet, meaning a Turkish residence permit, or a work permit should be considered early. See documents to prepare for residence connected with investment in Turkey. Administrative requirements and practice may change and should be confirmed when the application is prepared.

Points to check for current practice
Banking KYC and AML requirements, which vary by institution and may change.
Regulated sectors, including licences, authorisations or restrictions affecting foreign investment.
Translation, apostille and legalisation requirements according to the document, destination authority and country of origin.
Immigration conditions linked to the investor’s personal situation.

How an English-speaking lawyer in Turkey can assist

An English-speaking lawyer can structure the legal review, prepare targeted document requests, identify risks and convert due diligence findings into contractual protection. Legal assistance can also help bridge differences between international commercial expectations and Turkish corporate formalities.

Depending on the transaction, the legal review may be coordinated with an accountant for financial matters or with a sector specialist where the target operates under a regulatory regime. The aim is to reduce uncertainty and help the investor make a documented decision. In some cases, that decision may be not to proceed.

Due diligence should not be treated as an academic audit. Its purpose is to identify issues capable of affecting value, control, liabilities or the ability to operate the company after closing. Even where no major problem is identified, the process can clarify the seller’s responsibilities and provide a structured post-closing action list.

How Blay’s Office assists investors

Blay’s Office assists foreign investors and entrepreneurs considering buying shares in Turkey. Depending on the transaction, the work may include corporate verification, contract review, risk mapping, due diligence coordination, negotiation of conditions precedent, warranties and governance arrangements.

The appropriate scope depends on the company, sector, percentage being acquired and level of control sought. An initial document review may already reveal whether the file appears straightforward or whether stronger contractual protection is required.

Book a consultation before signing

If you are considering an investment in a Turkish company, prepare the company name, proposed percentage acquisition, any draft agreement already received and the issues that concern you most, such as the lease, bank debt, key customers, existing shareholders or outstanding liabilities.

Contact Blay’s Office for a consultation before signing or making a substantial payment. An initial review can help define the due diligence scope and identify the documents that should be requested from the seller.

FAQ: Buying Shares in Turkey

Is due diligence mandatory when buying shares in Turkey?

Due diligence is not necessarily a formal legal requirement for every share purchase, but it is strongly recommended. Buying shares means acquiring an interest in an existing company with its history and potential liabilities. The review allows the buyer to identify those risks and negotiate appropriate protection before completion.

What documents should I request before signing?

The minimum documents usually include current corporate records, articles of association, shareholding information, signing authorities, material contracts, key tax and employment records and information concerning litigation. The exact list depends on the sector, transaction size and level of control being acquired.

Is buying shares less risky than buying the company’s assets?

Not necessarily. An asset purchase may allow certain liabilities to remain outside the acquired perimeter, while a share purchase gives the buyer an interest in the company that already holds its assets and liabilities. The preferable structure depends on the business and risks identified.

How can the purchase price be protected?

Payment protection depends on the transaction. Possible mechanisms include conditional payment, escrow, retention, staged payments or other arrangements linked to completion events. The payment structure should remain consistent with the share transfer formalities, and complete transfer evidence should be retained.

What should I negotiate if I become a minority shareholder?

Information rights, reserved decisions, protection against dilution, governance rights and exit mechanisms should be reviewed before completion. Without these protections, the minority shareholder may depend heavily on the majority shareholder’s cooperation.

Can the share purchase agreement be signed in English?

An English agreement may be used between international parties depending on the transaction, but Turkish corporate formalities and documents may still require Turkish-language records or translations. Where several language versions exist, the agreement should state which version prevails.

What red flags should make me suspend the transaction?

Typical red flags include inconsistent ownership records, unclear signing authority, persistent refusal to provide essential documents, unexplained major litigation or complete dependence on an unsecured licence, lease or customer relationship. The buyer should either obtain adequate contractual protection or reconsider the transaction.

Can a lawyer perform the entire due diligence without an accountant?

A lawyer can review corporate structure, contracts, litigation, governance and legal compliance. A qualified accountant or financial adviser may be needed for detailed financial, accounting or tax analysis depending on the size and nature of the transaction. Coordination between the advisers is important so that financial findings are reflected in the legal terms of the deal.

This article provides general legal information and does not replace advice based on the specific company, transaction, investor or sector.

Last updated: April 2026

Buying Shares in Turkey: Legal Due Diligence Guide