Initial Public Offering (IPO) in Turkey refers to the legal process by which a joint stock company (anonim şirket) offers its shares to the public for the first time in accordance with the Capital Markets Law. This enables investors to become shareholders and provides companies with financing and enhanced market credibility.
Benefits of IPOs in Turkey
IPOs provide both the company and investors with several benefits:
- Access to new capital for expansion and growth
- Enhanced market reputation and credibility
- Increased brand visibility and trust
- Discounted share prices for investors during the offering
Legal Framework for IPOs in Turkey
The IPO process is regulated by the Capital Markets Board (CMB) of Turkey and supported by provisions in the Turkish Commercial Code. The CMB ensures transparency, investor protection, and regulatory compliance throughout the IPO process.
Key Requirements for an IPO
- Company must be at least 2 years old
- Minimum public float: 25% of total capital
- Minimum market value: 100 million TL
- Profitability in the last 2 years
- Equity-to-capital ratio of at least 1.25
- Legal and operational compliance confirmed by an independent legal expert
IPO Process in Turkey
- Appointment of a CMB-licensed intermediary institution and independent auditor
- Amendment of the company’s articles of association as required by the CMB
- Preparation of application documents including a prospectus and legal report
- Filing the application with the CMB
- Approval of the offering and listing on Borsa Istanbul
Our English-speaking lawyers in Turkey at Istanbul Lawyer Firm help clients prepare the legal documentation, ensure regulatory alignment, and manage risks during IPOs.
IPO Methods
- Capital Increase: New shares are issued; funds go directly to the company
- Sale of Existing Shares: Existing shareholders sell part of their holdings
- Combination: A mix of new and existing share sales
Challenges and Considerations
IPOs in Turkey are regulated by multiple communiqués and updates from the CMB. Challenges include:
- Legal complexity and evolving regulatory framework
- High procedural costs (legal, audit, marketing, brokerage)
- Need for comprehensive due diligence and legal review
Our Turkish corporate lawyers support both domestic and international clients in navigating IPO complexities, ensuring a smooth and compliant offering process.
Read our previous article: How to Open a Liaison Office in Turkey