Foreign ownership restrictions / limitation of foreign investments and equity in corporations in Turkiye

1) Are there any restrictions on foreign ownership in companies?

In general, there are no restrictions on foreign ownership in companies established in Turkiye. Foreign investors may hold 100% ownership, except in certain regulated sectors such as defense, energy, or media, where specific limitations or prior approvals may apply.

However, foreign real persons and Turkish legal entities with foreign capital are subject to different legal regimes in terms of real estate ownership. If a Turkish company with foreign shareholders intends to acquire real estate in Turkiye, the acquisition must comply with the company’s registered business activities stated in its Articles of Association and applicable sectoral restrictions.

If the property is located within a military or special security zone, separate approvals must be obtained from the relevant military and security authorities.

On the other hand, foreign legal entities incorporated outside Turkiye are generally not permitted to acquire real estate in Turkiye unless explicitly authorized by specific legislation such as the Petroleum Law, the Tourism Promotion Law, or the Law on Organized Industrial Zones.

2) Is government approval required for foreign investment in local companies?

Foreign investors have equal rights with Turkish investors, and there is no requirement to obtain prior approval for establishing a company, acquiring shares, or entering into partnerships.

However, in regulated sectors such as defense, aviation, energy, media, and telecommunications, certain types of investments may require prior approval or clearance from the relevant public authorities.

In addition, if a foreign-capital company intends to acquire real estate in Turkiye, the acquisition must align with the company's registered field of activity, and additional permits may be required depending on the location of the property.

3) Which sectors are subject to special rules or restrictions for foreign investors?

Sectors subject to special rules or restrictions for foreign investors include defense and military industries, aviation and aerospace, energy (particularly electricity generation and distribution), media and broadcasting, telecommunications, and mining and natural resources. In these sectors, foreign investments may be subject to prior approval, special licensing, or ownership limitations under Turkish law.

4) Can foreign persons own 100% of a limited liability company or joint-stock company?

Foreign natural or legal persons can generally own 100% of a limited liability company or a joint-stock company in Turkiye. Turkish legislation grants foreign investors full ownership rights in local companies. 

However, there may be restrictions on ownership or operations and requirements for prior approval in certain regulated sectors such as defense, energy, media, and telecommunications.

5) Are beneficial ownership rules applicable to foreign participants?

Beneficial ownership rules also apply to foreign participants in Turkiye. Turkish legislation requires the identification of the ultimate beneficial owners in companies and other commercial entities. These rules aim to ensure transparency of ownership structures for both domestic and foreign investors. 

In particular, ownership information of foreign natural and legal persons must be reported to the relevant authorities as part of measures to prevent money laundering and terrorist financing.

6) Are there any quotas or thresholds on foreign ownership in strategic companies?

In some strategic companies, there are quotas or limits on foreign ownership. The foreign ownership quotas in strategic sectors are generally as follows:

• Up to 49% in defense industries (subject to Ministry of National Defense approval);
• 25% to 50% in media companies (according to Radio and Television Supreme Council regulations);
• 50% in telecommunications;
• Variable thresholds in the energy sector as determined by the Energy Market Regulatory Authority (EPDK).

These thresholds may vary depending on the type of activity, project licensing requirements, or sector-specific legislation. If the foreign capital share exceeds the applicable limits, prior approval from the relevant public authorities or compliance with additional requirements may be necessary.

7) Is disclosure of foreign shareholders/participants required when registering a company?

Disclosure of foreign shareholders or participants is mandatory during company registration. During the establishment of the company, the identity details and share percentages of all partners are recorded in official registers. 

Additionally, the identification and reporting of ultimate beneficial owners is a legal requirement. This ensures transparency of the company’s ownership structure.

8) Are there any restrictions on the acquisition of real estate by foreign legal entities?

Foreign legal entities are subject to legal restrictions when acquiring real estate in Turkiye.

Foreign companies incorporated outside Turkiye may acquire real estate only in exceptional cases permitted by special laws such as the Petroleum Law, the Tourism Promotion Law, or the Law on Organized Industrial Zones.

Turkish legal entities with foreign shareholders (foreign-capital companies established in Turkiye) may acquire property in line with their registered fields of activity, provided the acquisition does not fall within restricted military or security zones.

For acquisitions in sensitive areas such as military or special security zones, prior approval must be obtained from the relevant military or provincial authorities. These restrictions do not apply to acquisitions in Organized Industrial Zones, Technology Development Zones, or Free Zones.

9) Are there any business or office localization requirements for foreign investors?

In general, there is no mandatory requirement for foreign investors to establish a local office or workplace. 

However, certain sectors or specific activities may impose obligations to have a local office or representative, especially in licensed industries or cases requiring official permits.

10) Are sanctions or other restrictions applied to investors from specific countries?

Sanctions or restrictions may apply to investors from certain countries. These measures are usually implemented in line with international sanctions regimes, embargoes, or foreign policy decisions of the Republic of Turkiye.

In particular, United Nations Security Council sanctions are directly binding on Turkiye. Additionally, the Turkish authorities may impose restrictions on investors from certain countries as part of compliance with anti-money laundering (AML), counter-terrorism financing (CTF), or national security frameworks.

Nevertheless, the general legal principle in Turkiye is to ensure equal treatment for all foreign investors, and any restrictions are applied only in specific, justified cases.

Authors: Kaan Gök, Gülendam Tüylüoğlu