Legal Process of Appointing a Foreign Director in a Turkish Company

Foreign Director Appointment in Turkish Company - Turkish Law Firm

Appointing a foreign national as a director in a Turkish company has become increasingly common in modern corporate structures, particularly among multinational companies, foreign investors, or international holding entities with operations in Turkey. However, despite the growing practice, the legal steps to validly appoint a non-Turkish citizen to a company’s board or as a company manager remain complex and require detailed legal planning. Failure to comply with formalities—especially in trade registry procedures, tax identification, and notarization—can result in appointments being declared invalid or unenforceable.

This guide, prepared by the experienced corporate team of ER&GUN&ER Law Firm, provides a structured overview of the appointment process for foreign directors under the Turkish Commercial Code (TCC). Whether your company is a Joint Stock Company (A.Ş.) or a Limited Liability Company (Ltd. Şti.), you must follow specific procedures to ensure the director’s appointment is valid, legally binding, and recognized by the Turkish Trade Registry and tax authorities. As English speaking Turkish lawyers, we support foreign shareholders, entrepreneurs, and corporate counsel through each step of this legally sensitive process.

Legal Framework for Director Appointment in Turkey

Turkey does not impose a nationality restriction on who may act as a director or company manager, except in certain regulated sectors. The key legal instruments are:

  • Turkish Commercial Code No. 6102 (TCC): Governs corporate structure, duties, and director liability.
  • Trade Registry Regulation: Provides detailed procedural rules for board changes, manager appointments, and company representation.
  • Tax Procedure Law and Social Security Legislation: Sets forth obligations for tax number registration, signature declarations, and residency considerations.

While the law permits the appointment of foreign nationals, practical implementation often faces bureaucratic delays and procedural errors. This is particularly true in cases where the foreign person does not reside in Turkey or lacks a valid Turkish tax identification number. Engaging a Turkish Law Firm at the planning stage prevents such issues from escalating into regulatory problems or rejected filings.

Differences Between LTD and A.Ş. Structures

The process and documentation required vary depending on whether the Turkish entity is a Limited Liability Company (Ltd. Şti.) or a Joint Stock Company (A.Ş.). Below are key differences:

1. Limited Liability Company (Ltd. Şti.)

In a Ltd., company management is carried out by one or more “müdür” (managers), who may be partners or third parties. A foreign individual may be appointed as a sole or co-manager. The appointment must be registered with the Trade Registry, and the individual must declare acceptance of duty before a Turkish notary. If the person resides abroad, the notarization must occur via a Turkish consulate or be legalized with an apostille. Additionally, a Turkish tax number is mandatory before registration is accepted.

2. Joint Stock Company (A.Ş.)

In an A.Ş., the company is managed by a Board of Directors, which may include foreign nationals. Each director must accept their appointment in writing and submit notarized signature declarations. The board must be appointed by a General Assembly resolution, and any change must be registered and published in the Turkish Trade Registry Gazette. A foreign board member does not need to be a shareholder unless the Articles of Association require it, but they still must obtain a Turkish tax ID and, in some cases, provide proof of address.

Step-by-Step Procedure for Appointing a Foreign Director

Appointing a foreign director requires strict adherence to procedural steps. These steps must be executed in order and supported by the proper documentation to ensure registration with the Trade Registry and recognition by tax authorities. Below is a typical legal roadmap:

  1. Resolution Drafting: The shareholders (Ltd.) or General Assembly (A.Ş.) must adopt a formal resolution indicating the appointment of the foreign director.
  2. Tax Identification Number: The foreign director must apply for and receive a Turkish tax ID number. This is mandatory even if they reside outside of Turkey.
  3. Signature Declaration: The director must issue a notarized signature declaration (imza beyannamesi) either at a Turkish notary in Turkey or via a Turkish consulate abroad.
  4. Declaration of Acceptance: The appointed director must submit a notarized acceptance of the directorship duty. This document confirms their willingness to assume legal responsibility.
  5. Registration and Publication: All documents must be submitted to the Trade Registry Directorate, which will then publish the appointment in the Trade Registry Gazette.
  6. Optional Social Security Notification: If the director will reside and work in Turkey, notification to the Social Security Institution (SGK) is necessary.

Missing any of these steps may result in the rejection of the registration application, causing delays or even the need for a full re-submission. Additionally, the timeline for registration varies by jurisdiction and workload at the local Chamber of Commerce. Companies should work proactively and seek legal coordination in advance of shareholder meetings. As a best lawyer in Turkey for corporate procedures, our firm manages the full process from document collection to trade registry finalization, ensuring that foreign director appointments are executed without error or delay.

Common Issues and Legal Risks

Many companies underestimate the complexities of foreign director appointments, leading to common errors such as incomplete documents, invalid notarizations, or ambiguous role definitions. A frequent issue arises when foreign directors do not have a registered address in Turkey, and their signature declarations fail to meet notarization rules. Another recurring challenge occurs when the Articles of Association are not updated to reflect foreign management or dual-language appointment requirements. Without proper legal review, such omissions can lead to disputes over signing authority or render the director’s actions invalid in banking or legal contexts.

Another overlooked risk is liability exposure. Directors, including foreign nationals, can be held personally liable for tax debts, unlawful company acts, or regulatory violations under Turkish law. Appointing a foreign individual without clearly defining their scope of authority or ensuring compliance with statutory duties can expose both the director and company to administrative penalties and lawsuits. Our English speaking Turkish lawyers conduct legal risk assessments, review governance documents, and ensure all company records comply with director liability regulations.

Documentation Checklist

To streamline the process, below is a checklist of key documents typically required for foreign director appointment in Turkey:

  • Tax Identification Application Form (Vergi Kimlik Numarası)
  • Notarized Signature Declaration (Imza Beyannamesi)
  • Declaration of Acceptance of Duty
  • Board or General Assembly Resolution
  • Director's Passport Copy (Translated and Notarized if needed)
  • Proof of Address (if required by Trade Registry)
  • Power of Attorney (if appointment process is handled by legal counsel)

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Conclusion: Legal Clarity Is Key in Foreign Director Appointments

The appointment of a foreign director in a Turkish company is legally permissible but procedurally intensive. From tax number registration to notarial certification and trade registry filings, the process is multi-layered and error-prone if not properly managed. The risks—both legal and operational—are too significant to ignore. A defective appointment may lead to invalid contracts, shareholder disputes, or personal liability for the appointed director. In cross-border corporate governance, formality is not optional—it is foundational.

At ER&GUN&ER Law Firm, we provide end-to-end legal support for appointing foreign nationals to director and managerial roles in Turkish companies. Our English speaking Turkish lawyers ensure compliance with the Turkish Commercial Code, tax procedures, and trade registry rules, offering practical legal solutions and strategic corporate advice. Whether you are incorporating a company or restructuring your board, our expertise ensures your governance structure stands on solid legal ground.