For foreign companies investing or operating in Turkey, strong corporate governance and legal compliance are not just obligations—they are competitive advantages. Navigating Turkish commercial law, regulatory structures, and internal control mechanisms requires expert legal guidance. At ER&GUN&ER, a highly regarded Turkish Law Firm, our English Speaking Turkish Lawyers provide corporate governance consultancy and compliance audits tailored for international clients. This in-depth guide offers strategic insights into legal obligations, governance frameworks, and risk mitigation practices under Turkish law.
Understanding Corporate Governance in Turkey
Corporate governance refers to the system of rules, practices, and processes by which a company is directed and controlled. In Turkey, corporate governance standards are primarily based on:
- Turkish Commercial Code No. 6102 (TCC)
- Capital Markets Law No. 6362 (for public companies)
- Corporate Governance Communiqués issued by the Capital Markets Board (CMB/SPK)
- OECD Corporate Governance Principles
Legal Compliance Obligations for Companies in Turkey
Legal compliance involves ensuring that a company’s operations, contracts, records, and governance structures conform to Turkish law and regulatory standards. Key areas include:
- Commercial registration and updates at the Trade Registry
- Corporate documentation: Articles of Association, board resolutions, share ledger
- Tax compliance and financial statement filing
- Labor law compliance and employment contracts
- Data protection obligations under KVKK (Turkish GDPR)
- Sector-specific regulations (banking, energy, telecom, pharma)
Corporate Governance Structures Under Turkish Law
1. General Assembly of Shareholders
Highest decision-making body; must convene annually to approve financials, elect board members, and decide on dividends.
2. Board of Directors (BoD)
Responsible for managing the company, implementing strategy, and representing the company in legal matters. Duties include fiduciary responsibility, conflict-of-interest management, and internal oversight.
3. Independent Auditors and Committees
Joint stock companies and listed firms must appoint auditors and may be required to form committees on audit, risk, or corporate governance.
Governance Requirements for Foreign-Owned Companies
Foreign shareholders must ensure that their Turkish companies observe local governance rules, including:
- Maintaining updated corporate books
- Filing of share transfers with the Trade Registry
- Proper appointment of BoD members and company managers
- Power of attorney filings for foreign owners
- Use of bilingual corporate resolutions when necessary
Best Practices for Legal Compliance in Turkey
- Annual legal audit of corporate documents
- Review of contracts and internal procedures for regulatory exposure
- Establishment of internal compliance officer or liaison
- Implementation of board policies on ethics, transparency, and reporting
- Training of key personnel on evolving Turkish legal obligations
Sanctions for Non-Compliance
- Administrative fines from regulatory bodies (SPK, BTK, MASAK)
- Tax penalties and loss of investment incentives
- Shareholder disputes or derivative lawsuits
- Invalidation of board actions or contracts
- Criminal liability for managers in severe breaches
How ER&GUN&ER Supports Foreign Investors
- Governance diagnostics and full corporate compliance audits
- Drafting of internal regulations and board policies
- Representation before regulatory authorities (SPK, TTB, BDDK)
- Training and legal briefings for executive teams
- Remote legal management via power of attorney
Related Legal Services
Frequently Asked Questions (FAQs)
- Is corporate governance mandatory for small companies? Yes. While simplified, all companies must maintain proper governance under the TCC.
- Can a foreign shareholder sit on the Turkish board? Yes. Foreign nationals may serve as board members or directors.
- What happens if a company fails to hold its General Assembly? Fines and possible shareholder litigation may follow. Some decisions may be invalidated.
- Do compliance obligations apply to branch offices? Yes. Branches must file reports and maintain internal records.
- Can corporate governance obligations be managed remotely? Yes. Via power of attorney, our English Speaking Turkish Lawyers can manage the entire process.
Conclusion: Governance Excellence is a Strategic Asset
Compliance is no longer just about avoiding penalties—it is a cornerstone of business credibility and investor trust. Partnering with the Best Lawyer in Turkey and a proactive Turkish Law Firm ensures that your company meets all legal and governance standards with confidence. Let our English Speaking Turkish Lawyers guide your board and management toward regulatory strength and global best practice.