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 and the Lexin Legal strategic alliance spanning 40+ countries, provides the full-spectrum legal architecture that sophisticated cross-border acquirers demand.

Key Takeaways: M&A in Turkey for Foreign Investors

• The Turkish Competition Board’s February 2026 amendment raised cumulative local turnover thresholds to TRY 3 billion and individual thresholds to TRY 1 billion — a fourfold increase from prior levels.

• Technology sector acquisitions retain a lower notification threshold of TRY 250 million for Turkish-established targets, reflecting heightened regulatory scrutiny of digital economy consolidation.

• 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.

• Strategic sectors including defence, energy, telecommunications, banking, and media require sector-specific regulatory approvals beyond Competition Board clearance.

• Phase I Competition Board review typically concludes within 30 calendar days; Phase II in-depth investigations can extend up to 6 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. The Turkish Competition Authority (TCA) exercises exclusive jurisdiction over merger clearance, and no transaction that meets notification thresholds may be completed without prior approval. Transactions closed without mandatory clearance are deemed legally void — a risk that no sophisticated foreign investor can afford to take.

The February 2026 amendment to Communiqué No. 2010/4 represents the most significant overhaul of Turkish merger control thresholds in over a decade. The revision quadrupled the individual Turkish turnover threshold from TRY 250 million to TRY 1 billion, while cumulative Turkish turnover thresholds rose from TRY 750 million to TRY 3 billion. These increases reflect both Turkish lira depreciation and the TCA’s policy objective of focusing enforcement resources on transactions with genuine competitive significance.

Foreign Direct Investment Law

Under the Foreign Direct Investment Law (Law No. 4875), Turkey maintains an open investment regime with national treatment for foreign investors. There are no general screening mechanisms for inbound acquisitions — a notable contrast to the increasingly restrictive foreign investment review frameworks in the EU and United States. 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-specific regulations impose additional approval requirements in banking (BDDK approval for 10%+ acquisitions), insurance (SEDDK), energy (EPDK), telecommunications (BTK), and broadcasting (RTÜK, which caps foreign ownership at 50%). Defence sector transactions may trigger national security reviews under separate legislation.

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.

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, combined with the newly introduced minimum corporate tax regime effective January 2026, 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

Turkish labour law imposes automatic transfer of employment relationships in the event of a business transfer under Article 6 of the Labour Law (Law No. 4857). All existing employment contracts, accrued severance entitlements, and collective bargaining agreements transfer to the acquirer by operation of law. Severance liability — calculated at approximately one month’s gross salary per year of service with no statutory cap on accrual — represents 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. Under the Turkish Competition Law (Law No. 4054) and the Communiqué No. 2010/4, mergers and acquisitions that exceed specified turnover thresholds require prior approval from the Turkish Competition Board (Rekabet Kurumu). As of February 2026, the revised thresholds require notification when cumulative Turkish turnover exceeds TRY 3 billion or individual Turkish turnover exceeds TRY 1 billion. Transactions completed without mandatory approval are deemed legally invalid.

What are the 2026 merger notification thresholds in Turkey?

Following the February 2026 amendment to Communiqué No. 2010/4, mandatory merger notification is triggered when (i) the combined Turkish turnover of transaction parties exceeds TRY 3 billion with at least two parties each exceeding TRY 1 billion, or (ii) in acquisitions, the Turkish turnover of the transferred assets or business exceeds TRY 1 billion and the worldwide turnover of at least one party exceeds TRY 3 billion. A lower threshold of TRY 250 million applies to technology undertakings established in Turkey.

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

The Turkish Competition Board operates a two-phase review system. Phase I review takes approximately 30 calendar days from complete notification. If the Board identifies potential competition concerns, it initiates a Phase II in-depth investigation, which can extend up to 6 months. Most straightforward foreign investor acquisitions are cleared in Phase I within 4-6 weeks.

Are there restricted sectors for foreign acquisitions in Turkey?

While Turkey generally applies equal treatment to foreign and domestic investors under the Foreign Direct Investment Law (Law No. 4875), certain strategic sectors impose additional regulatory requirements. Defence, energy, telecommunications, banking, insurance, and media sectors require sector-specific regulatory approvals beyond Competition Board clearance. The Banking Regulation and Supervision Agency (BDDK) must approve acquisitions of 10% or more in Turkish banks.

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 verify that the target company has no undisclosed liabilities registered with the Turkish Trade Registry.

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-specific restrictions apply in broadcasting (maximum 50% foreign ownership), aviation, and certain energy concessions. 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.