Turkey’s corporate legal landscape has matured significantly over the past decade, with the 2012 Turkish Commercial Code (TCC), the Capital Markets Law (Law No. 6362), and the increasingly rigorous Anti-Money Laundering (AML) framework producing a regulatory environment that is materially more demanding than it was even five years ago. Foreign investors entering the Turkish market through M&A must understand the legal requirements at every stage.

The Legal Framework Governing M&A in Turkey

Turkish M&A transactions are governed by:

• Turkish Commercial Code No. 6102 (mergers, demergers, share transfers, and corporate restructuring)
• Capital Markets Law No. 6362 and CMB communiqués (for public company transactions)
• Competition Law No. 4054 and Turkish Competition Authority (TCA) merger control rules
• Foreign Direct Investment Law No. 4875 (general principles of foreign investment)
• Sector-specific laws for regulated industries (banking, energy, telecoms, media)

Share Transfers and Asset Acquisitions

Foreign investors typically acquire Turkish businesses through either a share purchase (hisse devri) or an asset purchase (aktif devri). The legal consequences differ materially:

Share Purchase

The acquirer buys the target company’s shares and assumes all legal liabilities of the entity — including historical tax liabilities, employment obligations, regulatory violations, and pending litigation. This makes legal due diligence on the target company’s records, regulatory standing, financial statements, employment contracts, and litigation history essential.

Asset Purchase

The acquirer purchases specific assets (intellectual property, contracts, equipment, inventory) without assuming the seller’s liabilities, unless expressly agreed. Asset purchases are cleaner from a liability perspective but are more complex to structure, particularly where contracts require third-party consent to assignment.

Legal Due Diligence: The Foundation of Any M&A Transaction

Turkish M&A legal due diligence covers:

• Corporate records — Articles of association, Trade Registry certificates, board and general assembly minutes
• Ownership and encumbrances — share register review, pledge or lien searches
  Regulatory standing — sector licences, permits, compliance status
• Employment — employment contracts, union agreements, termination obligations, social security compliance
• Tax — tax return history, outstanding assessments, pending disputes with the Revenue Administration
• Litigation — ongoing or threatened proceedings at enforcement offices (icra dairesi) and civil courts
• Material contracts — customer and supplier agreements, lease terms, change-of-control provisions

A comprehensive due diligence report by Turkish legal counsel is a standard deliverable in any cross-border acquisition and is expected by international lenders and co-investors.

Turkish Competition Authority (TCA) Merger Control

Transactions meeting defined turnover thresholds must be notified to and approved by the Turkish Competition Authority (TCA / Rekabet Kurumu) before completion. The current thresholds (set under Communiqué No. 2010/4, as amended) require notification where the combined Turkish turnover of the parties exceeds TL 750 million and at least two parties each have Turkish turnover above TL 250 million. There are also sector-specific notification requirements for energy, media, and financial services. Completion without TCA approval carries substantial fines and potential transaction unwinding.

AML Compliance in Turkey

Turkey’s AML framework is governed by Law No. 5549 (Prevention of Laundering Proceeds of Crime) and implemented by the Financial Crimes Investigation Board (MASAK). Turkey has committed to FATF compliance, and recent amendments have significantly strengthened reporting obligations. For foreign investors and Turkish corporate entities, the practical obligations include:

• Customer due diligence (CDD) and beneficial ownership identification for corporate clients
• Suspicious transaction reporting (STR) to MASAK where required
• Record retention for a minimum of eight years
• Risk-based AML policies and internal controls for regulated entities
• Enhanced due diligence (EDD) for politically exposed persons (PEPs) and high-risk jurisdictions

Foreign investors acquiring Turkish companies must conduct AML-standard due diligence on the target and its beneficial ownership chain. Banks, law firms, and notaries in Turkey are obligated parties under Law No. 5549 and will conduct their own CDD before facilitating a transaction.

Board Governance, General Assembly, and Share Transfer Mechanics

Post-acquisition governance of a Turkish AŞ or LTD requires compliance with the Turkish Commercial Code’s mandatory governance provisions: board composition and meeting frequency, general assembly convening obligations, statutory audit requirements above defined thresholds, and profit distribution mechanics. Share transfers in a LTD must be approved by a general assembly resolution and registered at the Trade Registry to be valid against third parties. Transfers in an AŞ depend on whether shares are bearer or registered.

Conclusion

Mergers and acquisitions in Turkey require a legal team with direct command of Turkish corporate, competition, tax, and AML law. Due diligence, deal structure, regulatory filings, and post-acquisition governance are all areas where errors create liability that outlasts the transaction. For foreign investors entering the Turkish market through M&A, Turkish legal counsel is the first engagement, not the last.