Buying a Company in Turkey: Step-by-Step Guide for Foreign Investors (2025 Update)

Buying a Company in Turkey: Step-by-Step Guide for Foreign Investors (2025 Update)

Introduction: Why Consider Buying a Company in Turkey?

Turkey sits at the crossroads of Europe, Asia, and the Middle East, offering investors access to a dynamic market, competitive labor costs, and a gateway to 1.5 billion consumers. Buying a company in Turkey allows you to skip the administrative complexity of establishing a new entity while leveraging an existing market presence and operational structure.

This guide will walk you through the entire acquisition process, covering due diligence, legal and tax considerations, and key risks to manage for a successful deal.

1. Why Buy Instead of Incorporate?

• Speed: Acquiring an existing company can take 2-3 months, whereas incorporation plus organic growth takes significantly longer.

• Existing Licenses: Many sectors require specific operating licenses, which are often tied to the entity.

• Local Workforce: Avoids the complexities of immediate hiring and onboarding.

• Market Presence: Access to existing customers and supplier relationships.

• Residency Benefits: Purchasing a company may support your Turkish residency applications under certain conditions.

2. Types of Companies Foreigners Can Acquire in Turkey

Foreigners can fully acquire:

• Limited Liability Companies (LLC) (Ltd. Şirket)

• Joint Stock Companies (JSC) (Anonim Şirket)

• Sole proprietorships (with restructuring)

There are no general restrictions on 100% foreign ownership, except in specific regulated sectors like defense and certain media.

3. Step-by-Step Acquisition Process

Step 1: Define Your Target Criteria

• Sector (manufacturing, technology, e-commerce, etc.)

• Location (Istanbul, Izmir, Anatolian cities)

• Revenue, profitability, and staff size

• Regulatory compliance status

Step 2: Initial Research and Contact

• Use local brokers, CPAs, and M&A lawyers

• Sign NDAs before accessing sensitive data

Step 3: Due Diligence

• Financial review: debts, tax liabilities, assets

• Legal compliance: licensing, employee obligations

• Tax compliance: past declarations and potential risks

• Operational risks: customer and supplier dependencies

Step 4: Negotiation and Agreement

• Agree on the valuation (often EBITDA multiples)

• Draft the Share Purchase Agreement (SPA)

• Determine payment schedule and transitional management support

Step 5: Regulatory Approvals (if applicable)

• Competition Authority approvals if thresholds are met

• Sector-specific ministry approvals (energy, finance, etc.)

Step 6: Closing and Transfer

• Share transfer at the Notary

• Update trade registry records

• Notify tax office, SGK, and relevant authorities

4. Tax Implications for Foreign Investors

• Corporate Tax: 25% in 2025 (subject to changes under new fiscal policies)

• VAT: 1%, 10%, 20% depending on the sector and transaction

• Dividend Withholding Tax: 10% (subject to treaty reductions)

• Capital Gains Tax: Payable on the seller side but consider negotiation impacts

Tax due diligence is essential as past liabilities can transfer to the buyer unless structured carefully.

5. Costs and Timeline

• Due Diligence Fees: USD 3,000-10,000 depending on complexity

• Legal Fees: USD 5,000-20,000 depending on deal size

• CPA and Advisory Fees: USD 2,000-10,000

• Total Timeline: 2-4 months on average

6. Risks and How to Mitigate Them

• Undisclosed Liabilities: Perform thorough due diligence.

• Staff and Labor Law Issues: Review employment contracts and compliance.

• Regulatory Issues: Check for sector-specific hidden restrictions.

• Integration Risks: Plan post-acquisition management carefully.

Working with an experienced CPA and local M&A lawyer can significantly reduce these risks.

7. Frequently Asked Questions (FAQ)

Can foreigners own 100% of a Turkish company?
Yes, except for restricted sectors.

Do I need to reside in Turkey to own a company?
No, but residency may be beneficial for operational management.

Is buying better than starting a company from scratch?
If speed, market access, and licensing are priorities, buying is often advantageous.

Can I get residency by purchasing a company?
Company ownership alone does not automatically grant residency, but it can support your application.

How do I find companies for sale in Turkey?
Through local CPA firms, law firms, M&A brokers, and business networks.

CTA: Ready to Acquire a Company in Turkey?

If you are considering buying a company in Turkey to accelerate your market entry, reduce risks, and optimize tax planning, our CPA and legal advisory team can guide you throughout the process.

Contact us for a confidential consultation to evaluate your options and structure your acquisition efficiently.

info@ozmconsultancy.com