A share purchase agreement in Turkey runs on different legal rails depending on whether the target is a joint stock company (anonim şirket, "A.Ş.") or a limited liability company (limited şirket, "Ltd. Şti."). The rules are not parallel. They are different in form, different in substance, different in the registration mechanics, and different in the consequences if the form is not respected. This is the single biggest distinction that legacy SPA guides on the internet flatten by treating "share transfer in Turkey" as a single concept. It is two concepts, and the buyer's first decision — when receiving an information memorandum from the seller — is to confirm which company form the target is, because the entire deal mechanics flow from that determination.
The framework is in the Turkish Commercial Code (Law No. 6102, "TTK"): Articles 489-501 govern joint stock company shares (registered, bearer, and unbonded), Articles 595-596 govern limited liability company shares, and Articles 492-493 govern transfer restrictions in articles of association. Around the TTK sit the tax rules under the Income Tax Law (Law No. 193) and the Corporate Tax Law (Law No. 5520), the Competition Authority's notification regime under Law No. 4054 and Communiqué No. 2010/4, the Foreign Direct Investment Law (Law No. 4875), the Capital Markets Law (Law No. 6362) where the target is publicly held, and the Code of Obligations (Law No. 6098) governing the contractual mechanics of price, conditions, warranties, and remedies. ER&GUN&ER Law Firm advises foreign and Turkish buyers, sellers, and investors on share transfers covering all of these layers — from term sheet through due diligence, SPA negotiation, regulatory clearances, closing, post-closing filings, and any indemnification claims that arise after the deal closes.
Two Different Regimes: A.Ş. and Ltd. Şti. Share Transfers Are Not the Same
Joint stock company shares transfer through one of three mechanisms depending on the form of the share. Bearer share certificates (hamiline yazılı pay senetleri) under TTK Article 489 transfer through delivery of possession of the certificate plus mandatory notification to the Central Securities Depository (Merkezi Kayıt Kuruluşu A.Ş., "MKK") under the regime introduced by Law No. 7262 effective 5 April 2021 — without the MKK notification, the transferee cannot exercise shareholder rights against the company. Registered share certificates (nama yazılı pay senetleri) under TTK Articles 490-491 transfer through endorsement of the certificate plus delivery plus entry in the share register (pay defteri). Unbonded shares (çıplak paylar, the most common situation in private Turkish A.Ş.s where no certificates have been printed) transfer through a written assignment agreement under the general rules of the Code of Obligations and entry in the share register; the Court of Cassation's settled case law treats the written form as a validity requirement, not just an evidentiary requirement.
Limited liability company shares transfer through a wholly different procedure. Article 595 of the TTK requires the share transfer agreement to be in writing and the signatures of the transferor and transferee to be notarised. Article 595/2 then requires the consent of the general assembly of shareholders, unless the articles of association explicitly waive that requirement. Article 598 requires the transfer to be registered with the Trade Registry and announced in the Trade Registry Gazette. Each of these steps is constitutive of the transfer, not merely procedural — a Ltd. Şti. share transfer that fails any of them is not a transfer in law. This is why the same SPA template cannot be used for an A.Ş. target and a Ltd. Şti. target without significant adjustment.
The practical consequence of the regime difference is that A.Ş. transactions can close at the buyer's office or in counsel's conference room with the assignment agreement and share register update, while Ltd. Şti. transactions require everyone (or their attorneys-in-fact under Turkish-form notarised powers of attorney) to physically attend a Turkish notary on closing day. The notarial appointment becomes the timing constraint, the city of the notary becomes a logistics question, and powers of attorney for foreign signatories need to be apostilled and translated weeks in advance. Practice may vary by authority and year on whether some notaries permit electronic signing through the e-notary system; we test the available channels case by case rather than assume uniformity across notarial offices.
Joint Stock Company Share Transfers: The Bearer Share Reform of 2021
The most important change to A.Ş. share transfers in the last decade is the bearer share reform introduced by Law No. 7262 (published 31 December 2020, effective 5 April 2021). Before the reform, bearer shares transferred by simple delivery of possession, with no central record of who held them at any given time. This created a transparency problem that Turkey addressed by amending TTK Article 489 to require any bearer share transfer to be notified to the MKK by the company, with the transferee's identity, the number of shares, and the transfer date. Until the notification is made, the transferee cannot exercise shareholder rights against the company — voting, dividend collection, attendance at general assembly meetings, and inspection rights are all suspended.
The notification regime applies to all bearer share transfers regardless of size, and the company is the obligated party. The buyer's protection in an SPA acquiring bearer shares is to make the MKK notification a condition precedent to closing, with the seller obligated to procure the company's notification before the closing payment is released. We routinely include this as a separate condition in bearer-share SPAs, supported by a closing-day evidence of the MKK transaction registration. Failures here translate into the buyer holding shares in legal terms but unable to use them in operational terms.
Registered share transfers under TTK Articles 490-491 are the cleaner regime in practice. The transfer happens through endorsement of the certificate (the seller signs the back of the certificate in favour of the buyer, with the form prescribed by the TTK), delivery of the endorsed certificate, and entry of the buyer's name in the share register maintained by the company. The share register update is the company's obligation, but the buyer's protection is again to require evidence of the entry as a closing deliverable. Where the target's articles of association restrict transfer (TTK Article 492), the company can refuse to register the transfer on the grounds permitted by the articles, which is why we review the articles in due diligence before executing the SPA, not after.
Limited Liability Share Transfers: The Notarial Step Is Constitutive
Ltd. Şti. share transfers under TTK Article 595 require the written share transfer agreement to be signed before a Turkish notary, with the signatures notarised. The notary verifies the identity of the parties, witnesses the signing, and applies the notarial seal that converts the document from a private agreement into a notarised instrument. The notarisation is constitutive: a Ltd. Şti. share transfer agreement signed without notarisation is void as a transfer of legal title, even if the parties have subjectively reached agreement on every term and have already moved the consideration.
The general assembly consent under TTK Article 595/2 is the second step. Unless the articles of association explicitly say the consent is not required (a deviation that is permissible but not common in Turkish Ltd. Şti. articles), the share transfer must be approved by the general assembly. The consent is given by ordinary majority unless the articles require a higher threshold. We schedule the general assembly to coincide with the notarial signing day where logistics permit, or to follow it within a few days where they do not. Without the consent, the transfer is not effective even if the notarial step is complete.
The Trade Registry registration under TTK Article 598 is the third step. The transferee's name and the transferred share count are submitted to the Trade Registry, the registration is processed, and the change is published in the Trade Registry Gazette. The full transfer chain — notarised agreement, general assembly consent, Trade Registry registration — typically runs three to fifteen business days from start to finish, depending on the workload of the local Trade Registry. The buyer's economic risk during the gap between the notarisation and the registration is real, because legal title passes only on registration; we manage this through escrow of the consideration with release tied to registration confirmation, or through a closing structure where the consideration is paid into a notarised escrow only on registration.
Transfer Restrictions in Articles of Association
TTK Articles 492-493 permit the articles of association of an A.Ş. to restrict the transfer of registered shares on defined grounds. The articles can require the company's approval before a transfer is registered, with the company entitled to refuse approval only on grounds explicitly listed in the articles. Common grounds include: a pre-existing pre-emption right in favour of other shareholders, a competing buyer offer matching the proposed terms, a sector or competitor exclusion, or a violation of articles-prescribed shareholder qualifications. Where the company refuses to register a transfer on a permitted ground, the seller can either retain the shares or proceed with the company's nominee buyer at the proposed terms.
Pre-emption rights (ön alım hakkı) require the seller to offer the shares to existing shareholders before transferring them to a third party. The articles set the procedure: the form of the offer notice, the duration of the response period (typically 30 to 60 days), the calculation of the pre-emption price (the third-party offer price, or a formula prescribed in the articles), and the consequences of a contested exercise. We review the pre-emption mechanics in due diligence and reflect the seller's compliance with them in the SPA representations and conditions precedent.
Tag-along (birlikte satış hakkı) and drag-along (birlikte satışa zorlama hakkı) rights are not directly regulated in the TTK and are instead embedded in shareholders' agreements (pay sahipleri sözleşmesi or SHA) that operate alongside the articles. A buyer acquiring a controlling stake in a Turkish A.Ş. or Ltd. Şti. needs to verify the existence and scope of these rights in the existing SHA, because tag-along rights can convert what was structured as a 51% acquisition into a mandatory 100% acquisition at the same per-share price, and drag-along rights from the seller's side can compel the buyer to acquire minority shares it had not budgeted for. The SHA review is therefore a separate due diligence stream from the articles review, run in parallel.
Due Diligence: What Buyers Actually Find in Turkish Targets
Legal due diligence on a Turkish target covers the standard territory — corporate records, material contracts, employment, real property, intellectual property, regulatory compliance, litigation, tax — with several Turkey-specific overlays that experienced practitioners pay particular attention to. The first is the share register integrity: pay defteri entries that are missing, out of order, or inconsistent with the Trade Registry filings are a recurring problem in family-owned targets that have not professionalised their corporate housekeeping. We reconstruct the share history from the founding to the present in every Turkish target diligence, because the buyer's title is only as good as the chain of recorded transfers.
The second is employment and severance accruals. Turkish labour law under Law No. 4857 grants severance pay (kıdem tazminatı) on most forms of termination, calculated at one month's gross salary per year of service capped at the statutory ceiling that adjusts twice yearly. Turkish targets typically carry a substantial severance accrual that may or may not be reflected in the financial statements at full economic value. The buyer's accounting due diligence should quantify the accrual against the statutory formula, and the SPA should include a specific representation on the severance liability and an indemnity for shortfalls discovered post-closing.
The third is tax reconciliation, particularly transfer pricing for groups and indirect tax for retail and trading targets. The Revenue Administration has tightened transfer pricing scrutiny since 2018, and Turkish targets owned by foreign parents often have legacy transfer-pricing exposure that a buyer inherits through the share acquisition. We review the target's last three years of corporate tax returns, transfer pricing documentation, and any tax inspection correspondence, and we map identified exposure into the SPA's tax indemnity. Practice may vary by authority and year on the documentation accepted to support transfer pricing positions; the OECD-aligned local file / master file regime under the General Communiqué on Transfer Pricing has been the working framework since 2017 with periodic refinements.
Competition Board Notification: The Closing Conditions Most Buyers Forget
Share acquisitions exceeding the notification thresholds in Communiqué No. 2010/4 of the Turkish Competition Authority require pre-closing notification to the Competition Board (Rekabet Kurulu) and clearance before closing. The current thresholds — last revised in 2022 and effective from 4 May 2022 — apply when the combined Turkish turnover of the parties exceeds TRY 750 million and at least two of the parties each have Turkish turnover exceeding TRY 250 million, or alternatively when the Turkish turnover of the target exceeds TRY 250 million and the worldwide turnover of at least one of the acquiring parties exceeds TRY 3 billion. A separate, lower threshold applies to acquisitions in technology-enterprise targets active in or affecting Turkey, where the standard turnover thresholds for the target are not required.
The notification is filed by the acquirer through the Competition Authority's electronic system, with a complete documentation set including the SPA (or the relevant economic terms in redacted form), the parties' financial statements, market share data, and a description of the affected markets. The Competition Board has 15 calendar days for a Phase I review, which can be extended into a 90-day Phase II review where the transaction raises substantive competition concerns. Closing without clearance is a material breach of Article 11 of Law No. 4054 and exposes the parties to fines of up to 0.1% of annual turnover and an order to unwind the transaction.
The SPA architecture for a notifiable transaction puts the Competition Board clearance among the conditions precedent to closing. The seller and buyer share the burden of preparing the notification, with the buyer typically taking the lead because the notification is filed in the buyer's name as the acquiring party. We start the notification preparation as soon as the SPA is signed, because the documentation set is substantial and the 15-day Phase I clock does not start running until the notification is accepted as complete. Practice may vary by authority and year on which transactions trigger close scrutiny; sectors with active investigations (digital platforms, food retail, pharmaceuticals, energy) have historically attracted longer review timelines than the statutory baseline.
Sectoral Foreign Ownership Restrictions
Foreign Direct Investment Law No. 4875 establishes the principle of national treatment in Article 3: foreign investors enjoy the same rights as Turkish investors in respect of investment activity in Turkey. This is the default rule, and it means that for most sectors, a foreign buyer can acquire 100% of a Turkish A.Ş. or Ltd. Şti. without sector-specific clearance beyond the Competition Board notification described above.
The exceptions are sector-specific and material. Aviation activities under Law No. 2920 require the operator to be majority Turkish-owned with effective control held by Turkish nationals, restricting foreign acquisition to minority stakes in airline targets. Maritime cabotage under Law No. 815 reserves coastal shipping to Turkish-flagged vessels owned by Turkish nationals. Broadcasting activities under Law No. 6112 and the Radio and Television Supreme Council (RTÜK) regulations cap foreign ownership at 50% in radio, television, and on-demand broadcasting media services, and limit foreign-owned shareholders to a maximum of two such investments. Mining activities under Law No. 3213 and certain energy activities have specific licensing reviews where foreign control affects licence validity. Real estate acquisitions by foreign-owned Turkish companies are subject to the Land Registry's reciprocity-and-security review under Land Registry Law No. 2644 amendments.
Practice may vary by authority and year on which sectoral consents apply to a specific target; the regulatory pipeline updates regularly, particularly in defence, energy, and digital sectors where Turkey has actively legislated post-2020. We run a sectoral check at the term sheet stage, before the buyer commits to the SPA, because a sectoral restriction that surfaces at closing-day diligence can either kill the deal or force a structural restructuring at significant cost. An English speaking lawyer in Turkey running this check for a foreign acquirer prepares a regulatory memo identifying any sector-specific clearances required, the timeline for each, and the consequences if any are not obtained.
Tax Treatment of the Sale: Personal vs Corporate, Resident vs Non-Resident
The seller's tax position depends on whether the seller is a Turkish-resident individual, a Turkish-resident corporation, or a non-resident, and on whether the shares are A.Ş. shares (and within that, whether they have been held for at least two years) or Ltd. Şti. shares.
For Turkish-resident individual sellers of A.Ş. shares, Repeated Article 80/1 of the Income Tax Law treats the gain as a value increase gain (değer artış kazancı) but exempts the gain from income tax where the shares have been held for at least two years. The two-year exemption applies to A.Ş. shares only, and it is one of the principal reasons why Turkish private equity structures use A.Ş. rather than Ltd. Şti. for portfolio holdings: the personal-side exit tax is zero after two years for A.Ş., while Ltd. Şti. share gains are always taxable at the progressive personal income tax rates regardless of holding period. For publicly traded A.Ş. shares, the withholding regime under Provisional Article 67 of the Income Tax Law applies, with the rate set by Presidential Decree (currently 0% for resident individuals on most listed share gains, with periodic adjustments).
For Turkish-resident corporate sellers, Article 5/1-e of the Corporate Tax Law provides a 75% exemption on the capital gain from the sale of participation shares held for at least two continuous years, subject to the special-fund-account discipline (the exempt portion must be allocated to a passive-side fund account for five years) and the prohibition on dealers in securities. The remaining 25% is taxed at the standard 25% corporate rate, producing an effective tax burden of approximately 6.25% on the headline gain. For non-resident corporate sellers (foreign companies selling Turkish shares), the position depends on whether the seller has a permanent establishment in Turkey: without a PE, the gain is generally outside the Turkish tax net subject to treaty relief considerations, and with a PE, the standard corporate rules apply with treaty relief available where applicable.
For non-resident individual sellers, the tax treatment depends on the specific double taxation treaty and on whether the gain is from a substantial shareholding triggering source-state taxation under the relevant treaty article. Practice may vary by authority and year on the documentation accepted to evidence treaty residency; tax residency certificates (mukimlik belgesi) from the seller's home jurisdiction, apostilled and translated, are the standard documentation, and the form requirements have been refined multiple times since 2018.
Stamp Duty and the Drafting Workaround
The Stamp Duty Law (Law No. 488) imposes stamp duty on a wide range of contractual documents at 0.948% of the contract value, capped at the statutory annual ceiling that adjusts each year. Share purchase agreements fall within the scope of stamp duty in principle, and the duty can be a non-trivial deal cost on large transactions even with the cap.
Two structural points reduce the stamp duty exposure in well-drafted SPAs. First, share purchase agreements that do not specify a fixed contract value (because the price is determined by formula, by working capital adjustment, or by earn-out) have been treated by the Revenue Administration as not triggering stamp duty at the headline level, with the duty arising only on the determinable amounts as they are agreed. Second, the agreement can be executed in foreign currency and outside Turkey, which historically reduced stamp duty exposure under the rule that documents executed abroad do not trigger Turkish stamp duty unless they are used in Turkey for legal effect; recent rulings have tightened this position where the document is intended for use in Turkey, but the planning point retains some force in cross-border transactions.
The Ltd. Şti. notarial step generates separate notarial fees calculated on the share value, which are not stamp duty but operate similarly as a deal-cost line item. The Trade Registry registration generates registration fees. The accumulated indirect-tax cost on a Ltd. Şti. share transfer at meaningful values can reach low single-digit percentages of the deal value, depending on structure. We model the indirect tax cost in every SPA at the term sheet stage, because it can reshape the negotiation on price-bearing-of-tax allocation. Practice may vary by authority and year on stamp duty enforcement; the Revenue Administration has issued circulars since 2020 that have changed the operational reading of certain exemption claims.
Earn-Outs, Escrow, and Conditional Payment Mechanisms
Conditional payment mechanisms — earn-outs tied to post-closing performance, escrow holdbacks securing indemnification claims, working capital adjustments at closing — are governed by the contractual rules of the Code of Obligations (Law No. 6098), with no SPA-specific statutory framework. The drafting freedom this creates is broad, but the Turkish-law overlay imposes specific discipline points that foreign-style SPA precedent often misses.
Earn-out provisions need to be objectively measurable to avoid the determinability challenge under Article 27 of the Code of Obligations, which voids contractual obligations whose subject matter is impossible or insufficiently determined. Earn-outs tied to "achievement of business objectives" or "satisfactory performance" without measurable benchmarks have been challenged successfully in Turkish courts, and a deal lawyer drafting the earn-out clause builds in the calculation methodology, the reference accounting principles, the audit rights, and the dispute resolution mechanism for any disagreement on the calculated amount. We typically use TFRS-aligned EBITDA or revenue measures, with a clean reference to the post-closing financial statements certified by an agreed auditor.
Escrow arrangements in Turkey run through bank trust accounts under bank-issued escrow agreements, or through notarial escrow under the Notary Law. The bank route is more flexible commercially and supports cross-border transactions where the escrow agent needs to interact with foreign correspondent banks. The notarial route has stronger legal weight in Turkish enforcement proceedings but is procedurally heavier and less common in M&A practice. The escrow agreement is a separate contract from the SPA, with the bank or notary as a tripartite party, and the release conditions tracking the SPA's conditions for distribution. We draft the SPA and the escrow agreement together to ensure the release triggers in one match the post-closing milestones in the other; misalignment between the two documents is the most common reason for post-closing escrow disputes.
Dispute Resolution: ISTAC, ICC, and Enforcement of Foreign Awards
SPA dispute resolution clauses for Turkish targets typically choose between Turkish commercial court litigation, Istanbul Arbitration Centre (ISTAC) arbitration under Law No. 6570 of 29 November 2014, or international arbitration before the ICC, the LCIA, or the SCC. The choice depends on the parties' nationalities, the size of the transaction, the nature of the likely disputes, and the enforcement profile.
Turkish commercial courts are the default venue under MÖHUK (Law No. 5718 on International Private and Procedural Law) where the parties have not chosen otherwise. The Turkish commercial courts are competent, but the timeline to a final binding judgment after appeals can extend beyond five years, which is unattractive for time-sensitive M&A disputes. ISTAC arbitration runs on a quicker timeline (typical award within 12-18 months from notice of arbitration), produces an award enforceable in Turkey under Article 18 of Law No. 6570 without further procedural steps, and operates under rules aligned with international arbitration practice. ICC and other international arbitration produces an award enforceable in Turkey under the New York Convention of 10 June 1958, to which Turkey acceded by Law No. 3731 effective 25 September 1991.
For SPAs where the buyer is foreign and the target is in Turkey, we typically recommend ISTAC arbitration with the seat in Istanbul, applying Turkish substantive law to the SPA, with the arbitration in English where the parties' counsel teams justify the choice. This produces an award that is enforceable in Turkey directly and enforceable abroad under the New York Convention, and it avoids the procedural unfamiliarity of foreign forums for the Turkish-side participants. ICC remains the right choice for very large transactions where the buyer's institutional preference outweighs the procedural advantages of ISTAC. Practice may vary by authority and year on enforcement nuances; the Constitutional Court's case law on arbitration award annulment has refined what counts as a public-policy ground for refusing enforcement, and a watching brief on this jurisprudence is part of every cross-border SPA we close.
Closing Mechanics and Post-Closing Filings
Closing day for an A.Ş. share transfer involves: execution of the share assignment agreement (in writing for unbonded shares, or endorsement of certificates plus delivery for registered shares); payment of the purchase price (or release from escrow); update of the share register; resolution of any board changes the SPA contemplated; execution of any ancillary documents (employment agreements, transitional services agreements, non-compete undertakings); and notification to relevant counterparties (banks, key suppliers, regulators where required by sector). For bearer shares, MKK notification by the company is added to this list as a critical post-closing item.
Closing day for a Ltd. Şti. share transfer adds the notarial appointment, the general assembly meeting and approval, and the Trade Registry filing to the standard closing list. The notarial step typically runs first, followed by the general assembly within hours or days, followed by the Trade Registry filing. Where the buyer's funds are released from escrow on registration, the timing gap between notarisation and registration is the buyer's residual exposure, mitigated by escrow release conditions and (where the seller agrees) by transfer of voting and economic rights from notarisation under the SPA terms.
Post-closing filings vary by deal but commonly include: corporate income tax notification of the change in ownership, VAT registration adjustments where the entity's tax position changes, SGK notifications of any employment changes, sectoral regulator notifications where the target operates under licences requiring change-of-control approval, capital movements reporting under Decree No. 32 where foreign currency entered Turkey for the acquisition, and E-TUYS reporting under the Foreign Direct Investment Implementation Regulation where the buyer is foreign. We maintain a closing checklist that runs through these post-closing items in the 30 days after closing, because a missed filing here can trigger administrative penalties or, in some sectors, suspension of the licence the target depends on.
Frequently Asked Questions
- Are share transfer rules the same for A.Ş. and Ltd. Şti.? No. A.Ş. share transfers run under TTK Articles 489-491 (bearer or registered certificates, or unbonded shares); Ltd. Şti. share transfers run under TTK Articles 595-598 (notarised written agreement, general assembly consent, Trade Registry registration).
- Do A.Ş. share transfers require notarisation? No. A.Ş. share transfers do not require notarisation in the TTK sense. Bearer share transfers require MKK notification by the company; registered share transfers require endorsement, delivery, and entry in the share register; unbonded share transfers require a written assignment agreement and entry in the share register.
- Do Ltd. Şti. share transfers require notarisation? Yes. TTK Article 595 requires the share transfer agreement to be in writing with notarised signatures of the transferor and transferee. The notarial step is constitutive — without it, the transfer is not legally effective.
- What is the MKK notification for bearer shares? Under TTK Article 489 as amended by Law No. 7262 effective 5 April 2021, transfers of bearer share certificates must be notified to the Central Securities Depository by the company. Until the notification is made, the transferee cannot exercise shareholder rights against the company.
- When does Competition Board notification apply? When the parties' Turkish turnovers exceed the thresholds in Communiqué No. 2010/4 (currently TRY 750 million combined Turkish turnover with at least two parties exceeding TRY 250 million each, or TRY 250 million Turkish target turnover with TRY 3 billion worldwide acquirer turnover). Closing without clearance is a material breach.
- How long does Competition Board review take? 15 calendar days for Phase I review; up to 90 additional days for Phase II review where substantive competition concerns arise. The 15-day clock starts only when the notification is accepted as complete.
- Are there foreign ownership restrictions in Turkish M&A? Most sectors are open to 100% foreign acquisition under Law No. 4875. Sectoral restrictions apply to aviation, maritime cabotage, broadcasting (50% foreign ownership cap), and certain mining and energy activities.
- How is the seller's gain taxed? Turkish-resident individuals: A.Ş. shares held for at least two years are exempt under Repeated Article 80/1 of the Income Tax Law; Ltd. Şti. shares are always taxable at progressive rates. Turkish-resident corporations: 75% exempt under Article 5/1-e of the Corporate Tax Law for shares held for at least two years, subject to fund-account discipline. Non-residents: depends on permanent establishment and treaty relief.
- Does stamp duty apply to SPAs? Yes, in principle, at 0.948% of the contract value, capped at the annual ceiling. Practical drafting (formula-based pricing, foreign-currency execution, abroad signing) can reduce or defer the exposure subject to recent Revenue Administration interpretations.
- Can SPAs include earn-out clauses? Yes, subject to the determinability requirement of Article 27 of the Code of Obligations. Earn-outs must be objectively measurable, with a defined calculation methodology, audit rights, and dispute resolution mechanism.
- Are escrow arrangements available? Yes, through bank trust accounts or notarial escrow. Bank escrow is more flexible commercially; notarial escrow has stronger enforcement weight but is heavier procedurally.
- What dispute resolution forums work for SPAs? Turkish commercial courts under MÖHUK; ISTAC arbitration under Law No. 6570; or international arbitration (ICC, LCIA, SCC) with awards enforceable under the New York Convention 1958.
- Is the Turkish version of a bilingual SPA controlling? Not as a matter of law for A.Ş. share transfers, where the parties can choose the governing language. For Ltd. Şti. share transfers, the notarised text is in Turkish by procedural necessity, and the English version (where prepared) operates as a translation rather than as the binding instrument.
- What post-closing filings apply? Trade Registry update for Ltd. Şti.; share register update for A.Ş.; tax authority notification of ownership change; SGK notifications for employment changes; sectoral regulator notifications where applicable; capital movements reporting under Decree No. 32 for foreign-currency inflows; E-TUYS reporting under the FDI Implementation Regulation for foreign acquirers.
- Where does ER&GUN&ER Law Firm support SPA matters? Term sheet negotiation, due diligence (legal, employment, tax, regulatory, IP), SPA drafting and negotiation, Competition Board notifications, sectoral regulatory clearances, closing logistics, post-closing filings, and indemnification or earn-out disputes after closing.
Author: Mirkan Topcu is an attorney registered with the Istanbul Bar Association (Istanbul 1st Bar), Bar Registration No: 67874. His practice focuses on cross-border and high-stakes matters where evidence discipline, procedural accuracy, and risk control are decisive.
He advises foreign and Turkish buyers, sellers, and investors across Mergers and Acquisitions, Share Purchase Agreements, Corporate and Commercial Law, Competition Law, Tax Law, Foreign Direct Investment, and cross-border documentation matters where procedural accuracy and evidence discipline are decisive.
Education: Istanbul University Faculty of Law (2018); Galatasaray University, LL.M. (2022). LinkedIn: Profile. Istanbul Bar Association: Official website.