Mergers and Acquisitions in Turkey for Foreign Investors

Mergers and acquisitions in Turkey have surged to the forefront of cross-border deal-making as multinational corporations, private equity funds, and high-net-worth individuals seek strategic entry into one of the world’s most dynamic emerging markets. With a domestic consumer base exceeding 85 million, a geographic position bridging Europe and Asia, and a regulatory framework that has undergone significant reform in early 2026, Turkey presents compelling — yet complex — opportunities for foreign acquirers. The Turkish Competition Board’s February 2026 amendment to the merger control communiqué has fundamentally recalibrated notification thresholds, making it essential for every foreign investor to understand the new landscape before committing capital.

For C-level executives evaluating acquisition targets in Istanbul, Ankara, or Izmir, the stakes extend far beyond purchase price. Turkish M&A transactions implicate competition law clearances, sector-specific regulatory approvals, tax structuring imperatives, employment transfer obligations, and — increasingly — data protection compliance under KVKK. Istanbul Attorneys, through our corporate and commercial law practice, advises foreign acquirers on the competition, tax, employment and data protection aspects of a Turkish transaction alongside the corporate documentation.

Key Takeaways: M&A in Turkey for Foreign Investors

• The February 2026 amendment to Communiqué No. 2010/4 (Communiqué No. 2026/2, in force since 11 February 2026) raised the combined Turkish turnover threshold to TRY 3 billion, the individual thresholds to TRY 1 billion and the worldwide-turnover limb of the alternative test to TRY 9 billion.

• Where the target is a technology undertaking established in Türkiye, the TRY 1 billion thresholds apply as TRY 250 million on the target side (Article 7(2) of the Communiqué as amended).

• Foreign investors may acquire 100% of Turkish companies in most sectors under the Foreign Direct Investment Law (Law No. 4875), with no general foreign ownership caps.

• Sector laws add their own approvals: acquiring 10% or more of a bank’s capital needs permission under Article 18 of Banking Law No. 5411, and total direct foreign capital in a broadcaster is capped at 50% under Article 19 of Law No. 6112.

• Under Article 10 of Law No. 4054 the Competition Board has 15 days from notification to clear the deal or open a final examination; if it does neither, the transaction takes legal effect 30 days after notification. A final examination follows the investigation rules, and Article 43 sets six months for an investigation, extendable once by up to six months.

The Regulatory Framework for M&A Transactions in Turkey

Turkish Competition Law and Merger Control

Turkey’s merger control regime is governed by the Competition Law (Law No. 4054) and Communiqué No. 2010/4 on Mergers and Acquisitions Requiring the Approval of the Competition Board. Granting permission for mergers and acquisitions is one of the Competition Board’s statutory duties (Article 27(d) of Law No. 4054). A transaction that meets the thresholds needs the Board’s permission in order to acquire legal validity (Article 7 of the Communiqué), and until the Board has decided, expressly or tacitly, it cannot acquire legal validity (Article 10(4)). Closing without permission also exposes the parties to an administrative fine under Article 16 of Law No. 4054.

Communiqué No. 2026/2, published in the Official Gazette on 11 February 2026 and in force on publication, replaced Article 7 of Communiqué No. 2010/4. The individual Turkish turnover threshold rose from TRY 250 million to TRY 1 billion, the combined Turkish turnover threshold from TRY 750 million to TRY 3 billion, and the worldwide-turnover limb of the alternative test from TRY 3 billion to TRY 9 billion. Notification is now mandatory where either (a) the parties’ combined Turkish turnover exceeds TRY 3 billion and at least two parties each have Turkish turnover above TRY 1 billion, or (b) the Turkish turnover of the acquired assets or business (in a merger, of at least one party) exceeds TRY 1 billion and the worldwide turnover of at least one other party exceeds TRY 9 billion.

Foreign Direct Investment Law

Article 3 of the Foreign Direct Investment Law (Law No. 4875) provides that, unless international agreements or special laws say otherwise, foreign investors are free to make direct investments in Türkiye and receive the same treatment as domestic investors. The Law itself sets no general approval step for inbound acquisitions; restrictions come from sector-specific laws. Foreign entities may establish wholly-owned subsidiaries, acquire existing Turkish companies outright, or enter joint ventures without prior government approval in most sectors.

However, sector laws add their own approvals. Under Article 18 of Banking Law No. 5411, acquiring shares that represent 10% or more of a bank’s capital, or that take a shareholder above 10%, 20%, 33% or 50%, requires the permission of the Banking Regulation and Supervision Board (BDDK). Article 9 of Insurance Law No. 5684 applies a similar permission rule to acquisitions that reach or exceed 10%, 20%, 33% or 50% of an insurer’s capital. In broadcasting, Article 19(1)(f) of Law No. 6112 caps total direct foreign capital in a media service provider at 50% of paid-in capital and allows a foreign person to be a direct shareholder in no more than two providers. Energy, telecommunications and other licensed activities have licensing regimes of their own, and a change of control of a licence holder should be checked against the relevant sector law before signing.

Due Diligence Requirements for Foreign Acquirers in Turkey

Legal and Corporate Due Diligence

Comprehensive legal due diligence is the cornerstone of any successful M&A transaction in Turkey. Foreign acquirers must verify the target company’s corporate records at the Turkish Trade Registry (Ticaret Sicili), confirm share ownership structure, review board and general assembly resolutions, and examine all material contracts for change-of-control provisions. As we discussed in our guide to company formation in Turkey for foreign investors, the choice between limited liability company (LLC) and joint-stock company (JSC) structures has direct implications for share transfer mechanics and minority shareholder protections in M&A contexts. Where existing co-owners will stay on after closing, the governance terms usually have to be renegotiated at the same time: our guide to shareholder agreements for foreign investors in Türkiye covers the reserved matters, pre-emption and exit clauses that come up in that negotiation.

Tax and Financial Due Diligence

Tax due diligence must examine the target’s corporate income tax compliance, VAT exposure, withholding tax obligations on cross-border payments, transfer pricing documentation, and any pending tax disputes or inspections. Turkey’s 25% corporate income tax rate under Article 32(1) of Corporate Tax Law No. 5520, together with the domestic minimum corporate tax in Article 32/C — added by Law No. 7524 in 2024, under which the corporate tax computed cannot be less than 10% of corporate income before deductions and exemptions — creates specific structuring considerations for acquisition vehicles. Foreign acquirers should evaluate whether the transaction should be structured as an asset purchase or share purchase based on available tax amortization benefits and potential successor liability exposure.

Employment and Labour Due Diligence

Where a workplace or part of it is transferred by a legal transaction, Article 6 of the Labour Law (Law No. 4857) moves the employment contracts existing on the transfer date to the transferee with all their rights and obligations. The transferee must count service from the employee’s original start date, and transferor and transferee are jointly liable for debts that arose before the transfer and are due on that date, the transferor’s liability being limited to two years from the transfer. In a share purchase the employer itself does not change, so the contracts stay with the target. Severance pay is governed by Article 14 of the former Labour Law No. 1475, which Law No. 4857 kept in force: 30 days’ wage for each full year of service, calculated on the last wage together with the monetary benefits provided to the employee, and payable when the contract ends in the cases that Article lists. The annual amount is capped at the maximum retirement bonus payable for one year of service to the highest-ranking civil servant. Accrued severance remains one of the most material hidden liabilities in Turkish M&A transactions.

Common questions about this topic

Do foreign investors need Competition Board approval for M&A in Turkey?

Yes, where the turnover thresholds in Article 7 of Communiqué No. 2010/4 (set out in the next answer) are met. Under the Competition Law (Law No. 4054) and the Communiqué, such a merger or acquisition needs the permission of the Competition Board (Rekabet Kurulu) to acquire legal validity, and until the Board decides it cannot acquire legal validity.

What are the 2026 merger notification thresholds in Turkey?

Under Article 7 of Communiqué No. 2010/4 as amended by Communiqué No. 2026/2 (in force since 11 February 2026), notification is mandatory when (i) the parties’ combined Turkish turnover exceeds TRY 3 billion and at least two parties each have Turkish turnover above TRY 1 billion, or (ii) the Turkish turnover of the acquired assets or business (in a merger, of at least one party) exceeds TRY 1 billion and the worldwide turnover of at least one other party exceeds TRY 9 billion. Where a technology undertaking established in Türkiye is acquired, or merges, the TRY 1 billion thresholds apply as TRY 250 million on the target side.

How long does the M&A approval process take in Turkey?

Article 10 of Law No. 4054 gives the Competition Board 15 days from notification to either clear the transaction or take it into final examination (Phase II). If the Board does not respond or act in time, the transaction takes legal effect 30 days after notification. In a final examination the investigation rules in Articles 40 to 59 of the Law apply to the extent compatible, and under Article 43 an investigation is completed within six months, with a one-off extension of up to six months. A notification that is incomplete or incorrect is treated as made only on the date it is completed or corrected.

Are there restricted sectors for foreign acquisitions in Turkey?

The Foreign Direct Investment Law (Law No. 4875) gives foreign investors the same treatment as domestic investors unless international agreements or special laws provide otherwise, so the restrictions come from sector laws. Banking (Article 18 of Law No. 5411: BDDK permission for acquisitions of 10% or more), insurance (Article 9 of Law No. 5684) and broadcasting (Article 19 of Law No. 6112: 50% cap on direct foreign capital) are examples; other licensed sectors should be checked against their own laws before signing.

What due diligence is required for M&A transactions in Turkey?

Comprehensive M&A due diligence in Turkey should cover corporate records and share structure, real estate title deed (TAPU) verification, tax compliance history, employment obligations and severance liabilities, environmental permits, intellectual property registrations, pending litigation, regulatory licenses, and KVKK (data protection) compliance. Foreign investors should also compare the target’s Trade Registry records with what the seller has disclosed.

Can foreign companies acquire 100% of a Turkish company?

Yes. Under Turkey’s Foreign Direct Investment Law (Law No. 4875), foreign investors may acquire 100% ownership of Turkish companies in most sectors without requiring special permission. There are no general foreign ownership caps. However, sector laws can limit this: in broadcasting, for example, total direct foreign capital in a media service provider cannot exceed 50% of paid-in capital (Article 19 of Law No. 6112). The acquisition must still comply with Competition Board notification requirements if applicable thresholds are met.

This guide is general information on Turkish law, not legal advice on your own matter. Rules and practice change; check the position before you act.