Legal Structuring of Investments and Suitability Assessment

What Is Assessed in the Legal Structuring of an Investment?

An investor establishing a company directly in Türkiye, becoming a partner in an existing company, a foreign company opening a branch in Türkiye, or establishing a liaison office solely for certain representation and coordination activities each give rise to different legal consequences.

The appropriate entry model is determined by assessing together the purpose of the investment, the planned commercial activity, the partnership structure, any need for personnel or a physical organization in Türkiye, and the relevant sector-specific regulations.

Foreign investors may establish a company in Türkiye by choosing the appropriate one of the company types regulated under the Turkish Commercial Code, or may become a partner in an existing company.

When choosing the company model, the partnership structure, the capital and management arrangements, representation and signature authorities, the financing of the investment, share transfers and the legal relationships between investors should be planned together.

Explore Company Formation

A foreign company may operate in Türkiye by opening a branch. A branch does not have a legal personality separate from the head office, and its field of activity is tied to the head office's field of activity.

When assessing the branch model, the decision-making and representation structure of the foreign head office, the branch representative in Türkiye, trade registry procedures and obligations tied to the field of activity should be taken into account.

Foreign companies may establish a liaison office in Türkiye, provided that they do not engage in commercial activity in Türkiye and subject to the permission of the relevant Ministry.

A liaison office may be considered for market research, representation, coordination and other permitted activities. If direct income-generating commercial activity in Türkiye is planned, a structure other than a liaison office must be chosen.

The chosen investment model is reviewed with respect to company law, foreign investment legislation, the contractual structure and special regulations relating to the field of activity.

If the field of activity is subject to a special permit, license or administrative approval, it is important to identify these requirements before the investment begins and to build the corporate structure accordingly.

Where an investment is also intended to acquire Turkish citizenship, the commercial investment model and the investment conditions under citizenship legislation must be assessed separately.

Having established a company or made a commercial investment is not, on its own, sufficient for a citizenship application. If the investment has a citizenship purpose, the type of investment chosen must also be suitable for the relevant citizenship route.

The legal relationship that investors will establish among themselves or with local partners may be regulated, in addition to the company's articles of association, by a shareholders' agreement, an investment agreement, and financing and other commercial contracts where necessary.

Matters such as capital obligations, management and voting rights, representation, share transfers, exit mechanisms, confidentiality, competition and dispute resolution are planned contractually according to the nature of the investment.

Explore Commercial Contracts

Not every investment is completed by a trade registry procedure alone. Depending on the field of activity, municipal licenses, sector-specific permits, operating certificates or notifications to be made to the relevant authorities may arise.

Identifying these obligations before the investment activity begins ensures that the company structure and contracts are set up in line with the required permit process.

Explore Business Premises, Work Licenses and Operating Permits

The Basic Difference Between a Company, a Branch and a Liaison Office

A company conducts commercial activity in Türkiye as a separate legal entity. A branch is the extension of the foreign head office in Türkiye and has no separate legal personality. A liaison office operates within the scope of a permit and cannot engage in commercial activity in Türkiye.

For this reason, the choice should be made not merely according to ease of formation, but according to which activities the investor will carry out in Türkiye and the investor's long-term commercial plan.

What Do We Check Before an Investment?

Tax calculation, tax return, accounting and customs brokerage procedures are not carried out by the law firm; where necessary, legal coordination is provided with an independent financial advisor, tax advisor or customs broker.

How the Process Works

Does Your Investment Have a Turkish Citizenship Purpose?

Where an investment is made for the purpose of Turkish citizenship, establishing the commercial structure and fulfilling the citizenship investment conditions are treated as separate legal processes. The relevant citizenship route must be reviewed separately before the investment model is determined.

Do You Want to Restructure Your Existing Investment?

For investors who already have a company, branch or commercial activity in Türkiye, when the partnership, representation, contracts, operating permits or company structure need to be changed, the existing structure can be reviewed legally and the appropriate restructuring path can be determined.