A joint venture lawyer in Turkey structures the agreement that decides who controls a jointly owned Turkish company, how it is funded, and how the partners separate.
Oznur & Partners advises foreign investors and international companies on joint ventures with Turkish partners: choice of vehicle, shareholders’ agreements, articles of association, board and voting structure, funding obligations, deadlock, competition clearance and exit. Most of the work happens before incorporation, because after incorporation the leverage has already moved.
A joint venture agreement is read carefully twice: once when it is signed, and once when the partners stop agreeing. The second reading is the one it has to survive.
Investors negotiating their first Turkish venture usually start from the same place. Which structure should we use, a company or a contract? A contractual joint venture is quick to form and slow to unwind. It needs no incorporation, no capital procedure and no registry file, so a construction consortium can be running within days (which is exactly why it keeps being chosen for the wrong projects); but because it creates no separate legal person, the partners can carry direct and potentially joint and several liability toward third parties long after the project itself has ended. A company costs more time at the start and far less at the end.
Timing is the second question, and it is usually asked too late. When should the exit and deadlock terms be settled? While the partners still expect the venture to succeed. Exit provisions are drafted fairly only in the period when neither side knows which of them will want to leave, and the moment one side does know, every clause becomes a negotiation about that specific person. Ventures that postpone the exit conversation to keep the mood positive are the ones that separate badly.
Control is the question foreign shareholders ask in the sharpest terms. What actually gives a foreign shareholder control of a Turkish company? Not the percentage on its own. Control comes from board nomination rights attached to a share group, voting privileges within the limits of the Turkish Commercial Code No. 6102, a reserved matters list that requires the foreign shareholder’s consent, and signature authority that matches the board bargain. A 60 per cent shareholder without those mechanisms can be outvoted on everything that matters in practice.
Funding is where good ventures break quietly. How do we deal with a partner who does not put in the money? The agreement has to say so in advance: default interest, dilution of the defaulting shareholder at a defined formula, loss of board nomination rights, or a call option over the defaulting stake. A funding clause that only records the obligation, without stating the consequence of breaching it, gives the other shareholder a claim rather than a remedy.
This page covers ventures where two or more partners will own and run a Turkish business together. A straight purchase of an entire existing Turkish company is a share acquisition rather than a joint venture, and is handled through our mergers and acquisitions practice.
⚖️ What Counts as a Joint Venture Under Turkish Law?
Turkish law has no single statute that governs all joint ventures. The legal character of the arrangement follows the structure the parties select, and that choice decides legal personality, liability, governance, taxation, transferability and whether competition or sector approvals are needed. Three routes cover almost everything seen in the Turkish market.
The equity joint venture is the standard vehicle for an operating business. The partners incorporate a Turkish commercial company, or subscribe to shares in one, and the company holds its own assets, contracts, licences and liabilities. It suits continuing operations, regulated activities, businesses with employees and any venture where the parties expect a future share sale.
The contractual joint venture is usually built as an ordinary partnership (adi ortaklık) under Articles 620 and following of the Turkish Code of Obligations No. 6098. It creates no separate legal person. Construction consortia, tender bids and defined-scope infrastructure projects use it because it forms quickly and dissolves with the project. What it does not give is a liability shield, and that absence is the single most expensive surprise in cross-border JV work.
The acquisition of a stake in an existing Turkish company turns a going business into a jointly owned one. The investor gets immediate access to operations, personnel, contracts, licences and customers, and at the same time inherits the company’s entire legal history. That is why due diligence is not a formality in this route; it is the route’s main risk control.
The distinction that decides everything else is liability. A foreign company that enters a contractual joint venture without incorporating does not stand behind a corporate shield, and depending on how obligations are undertaken and how the venture is represented toward third parties, the partners can be pursued directly. The liability analysis belongs at structuring stage, not after the first claim arrives.
⚖️ Do You Need a Turkish Partner to Do Business in Turkey?
No, not as a general rule. The Foreign Direct Investment Law No. 4875 is built on equal treatment of foreign and domestic investors, and in ordinary non-restricted sectors a foreign investor may hold the entire share capital of a Turkish company. When a foreign group takes a local partner, it is buying market access, distribution, sector knowledge or operational capacity, and that is a commercial decision rather than a legal condition.
The freedom is real, but it is not unqualified. Four checks belong in the structuring phase, before the shareholding ratio is written into a term sheet.
Sector restrictions. Broadcasting, maritime transport, civil aviation, private security and several other regulated activities carry their own ownership caps, nationality conditions, licensing requirements or management criteria. A structure that is perfectly ordinary in manufacturing can be unworkable in a licensed sector. Sector work runs through our business formation and licensing practice and, for regulated energy ventures, our energy practice.
Foreign investment reporting. Companies within the foreign direct investment framework report electronically through the E-TUYS system. Annual activity information is filed by the end of May each year, while capital payments and share transfers involving foreign shareholders are notified within one month of the transaction. These duties should be assigned by name in the venture’s compliance calendar; routine bookkeeping services do not automatically cover them, and the venture only discovers the gap when it needs a clean corporate record for a bank or a buyer.
Management and work permits. Owning shares in a Turkish company and being authorised to represent it do not give a foreign individual the right to work in Turkey. Where the foreign shareholder intends to place expatriate executives or technical personnel on the ground, the work permit route is planned alongside the corporate structure rather than after it. Our corporate immigration practice handles this in parallel with incorporation.
Banking. Turkish banks run know-your-customer, beneficial ownership and source-of-funds checks, and they run them harder where the shareholder chain includes foreign corporate entities or several layers. Account opening therefore sits on the transaction timetable as a real step with its own lead time (two to six weeks is a realistic planning assumption), not as paperwork to be handled the week after registration.
⚖️ Company or Contract: Which Structure Fits the Deal
The choice between an incorporated venture and a contractual one is usually framed as a speed question. It is really a liability and duration question: how long the relationship will last, and who answers to third parties while it does.
| Feature | Equity JV (company) | Contractual JV (adi ortaklık) |
|---|---|---|
| Legal personality | Separate legal entity | No separate legal personality |
| Partner liability | Generally limited at shareholder level, subject to company type and statutory exceptions | No corporate shield; direct and potentially joint and several liability may arise depending on the obligation and representation |
| Formation | Incorporation and registration through MERSİS and the competent trade registry | Contractual formation; tax and administrative registrations depend on structure and activity |
| Taxation | Corporate taxation at company level | Depends on the legal and tax classification of the arrangement |
| Transfer of interest | Governed by the rules applicable to the company type and share type | Subject to the partnership agreement and the Turkish Code of Obligations |
| Duration | Open-ended or fixed purpose | Usually tied to a project or defined objective |
| Typical use | Operating businesses, investment platforms, regulated and IP-based ventures | Construction consortia, tenders, defined-scope projects |
Where a contractual venture genuinely is the right vehicle, the agreement has to do the work a corporate structure would otherwise do. It allocates responsibilities, defines contributions, establishes management and representation authority, regulates funding and default, fixes how profit and loss are shared, and sets out a termination and winding-up procedure that can be executed without a court.
One limit is worth stating plainly, because international templates often obscure it. Allocating liability between the partners does not by itself stop a third party from exercising rights that arise under applicable law against any of them. Internal risk allocation and external liability are two separate analyses, and only the first one is inside the partners’ control.
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⚖️ Joint Stock or Limited Liability: Choosing the JV Company
Both the joint stock company (anonim şirket) and the limited liability company (limited şirket) are open to foreign investors, subject to restrictions applying to particular regulated sectors. For a joint venture the decision rarely turns on capital. It turns on how much of the governance bargain can be written into the company’s own constitutional structure rather than left as a promise between shareholders.
| Criterion | Joint Stock Company | Limited Liability Company |
|---|---|---|
| Minimum capital | 250,000 TRY; 500,000 TRY initial and issued capital for non-public JSCs in the registered capital system | 50,000 TRY |
| Share transfer | Mechanics depend on share type, whether certificates have been issued, and statutory or articles-based restrictions | Written agreement with notarised signatures, general assembly approval as a rule, plus registry formalities |
| Exposure to unpaid public debts | Shareholders generally not personally liable by reason of share ownership; separate rules apply to directors and legal representatives | Shareholders may be liable for certain uncollectable public receivables in proportion to shareholding |
| Share groups and privileges | Wider room for share groups, voting privileges and board nomination rights within statutory limits | Comparatively limited |
| Management | Board of directors; board membership does not require share ownership | One or more managers; at least one shareholder must hold management and representation authority |
| Financing flexibility | Broader, including instruments unavailable to an LLC | Narrower |
For substantial joint ventures the joint stock company is usually preferred, and the reason is governance rather than prestige. Within the mandatory provisions of the Turkish Commercial Code No. 6102, a joint stock company can carry share groups, voting privileges and board nomination rights, which means the control bargain lives inside the company’s own architecture instead of existing only as a contractual undertaking between shareholders.
Liability profiles also differ in a way that matters to a minority foreign investor. In a limited liability company, a shareholder can be pursued personally, in proportion to its shareholding, for certain public receivables that cannot be collected from the company itself. A joint stock company shareholder does not carry that exposure by reason of shareholding alone, which changes the calculation for an investor taking a minority position in a business it does not run day to day.
The two forms are compared in detail in our limited and joint stock company guide, and the registration procedure is set out on our company formation page.
⚖️ Who Puts In What: Capital Contributions and Funding
Initial contributions to a Turkish joint venture company may be cash or, subject to Turkish corporate law requirements, eligible assets contributed in kind. Contributions in kind bring valuation and registration procedures with them (valuation is where most in-kind contributions lose weeks), which take time and can affect the closing timetable. Assets intended as capital should therefore be reviewed before the capital table is fixed in the term sheet rather than after signature.
Not every commercial contribution can be treated as corporate capital. Personal services, labour and commercial reputation are not freely transferable assets capable of being contributed as capital to a capital company, and a partner whose real contribution is technology, know-how or trademarks faces a specific choice: transfer ownership of those assets to the venture, or license them to it. Most cross-border ventures license, because the foreign group rarely wants its background intellectual property sitting inside a jointly owned Turkish entity.
The agreement then has to answer what happens when the company needs more money than the founding round provided. The points that decide this are:
- whether further shareholder funding is mandatory or optional, and who may call for it
- the form of that funding: equity, shareholder loans, third-party finance or a combination
- the consequence of a shareholder failing to fund, including default interest, dilution at a stated formula, loss of nomination rights or a call option
- pre-emption rights and the effect of a capital increase on the agreed control ratio
- approval thresholds for external borrowing, guarantees and security
- transfer pricing and thin capitalisation consequences of shareholder financing
Joint ventures incorporated before the current minimum capital rules took effect need a separate check in 2026. Under Provisional Article 15 of the Turkish Commercial Code, added by Law No. 7511, companies whose capital remains below the statutory minimum must raise it by 31 December 2026, and companies that miss the deadline are deemed dissolved. The minimum is 250,000 TRY for a joint stock company and 50,000 TRY for a limited liability company; a non-public joint stock company in the registered capital system that does not reach 500,000 TRY by the same date is treated as having left that system.
Ventures that have run for years on shareholder loans while keeping registered capital at the old statutory floor are exactly the profile this rule catches. Compliance is a general assembly decision followed by registration and announcement, and both steps take calendar time, so the position is worth verifying well before December. Our guide to Turkish company capital compliance in 2026 sets out the process, and the statutory text is published on mevzuat.gov.tr.
⚖️ The Shareholders’ Agreement and the Articles of Association
A shareholders’ agreement binds the parties who sign it. It governs the commercial relationship between them and can regulate funding, governance commitments, transfer economics, exit rights, confidentiality, non-compete obligations, warranties and dispute resolution, with the governing law and forum the parties choose.
The articles of association do something different. They form part of the company’s constitutional framework and operate inside the mandatory rules of Turkish corporate law. Under Article 340 of the Turkish Commercial Code No. 6102, the articles of a joint stock company may depart from the Code only where the Code expressly permits it, which sets a real ceiling on what can be engineered into a Turkish company’s constitution.
The practical consequence for a foreign shareholder is that a promise recorded only in a shareholders’ agreement does not automatically produce a corporate result. If the other shareholder votes in breach of that promise, the vote may still be corporately effective, and the injured party is left with a contractual claim for damages rather than the outcome it bargained for (a claim that has to be pursued, funded and won, long after the decision has taken effect). That gap is where most disappointed JV investors discover the difference between the two documents.
The allocation therefore looks like this:
- The shareholders’ agreement carries the wider commercial bargain: business plan, funding, transfer economics, exit rights, confidentiality, non-compete, representations and warranties, governing law and dispute resolution.
- The articles of association carry the corporate mechanisms Turkish law allows to be built in: share groups and their rights, voting privileges, board nomination rights, meeting and decision rules, and permitted transfer restrictions.
The two documents are drafted together, not in sequence by two different teams. A protection that cannot produce its intended corporate effect is worth identifying before closing, because after a dispute begins the only available remedy is the one already written down. Our shareholder agreement practice handles this coordination specifically.
⚖️ Governance and Reserved Matters
Governance decides how economic ownership converts into actual influence. The question becomes acute where one shareholder funds most of the capital while the other brings market access, licences, technology or management, because the capital ratio and the value ratio are not the same number.
In a Turkish joint stock company, voting privileges are one of the available levers, and they have a statutory ceiling. Under Article 479 of the Turkish Commercial Code, voting privilege is created by giving shares of equal nominal value different numbers of votes, and no share may carry more than fifteen votes, save for the limited statutory exceptions where a court may permit more. Board representation is handled separately, through share groups that hold the right to nominate directors under the articles.
Two limits shape any reserved matters list. Article 408 of the Turkish Commercial Code lists powers that belong exclusively to the general assembly, and Article 375 lists duties that cannot be taken away from the board. A reserved matters clause that tries to move a decision across either of those lines will not work at corporate level, however clearly the shareholders agreed it.
A workable list for a Turkish joint venture usually covers:
- amendment of the articles of association
- capital increases and reductions, and changes to share rights
- approval or material amendment of the annual budget and business plan
- borrowing, guarantees and security above agreed thresholds
- acquisition or disposal of material assets, real property or shares in other companies
- appointment and removal of senior management
- dividend policy and material changes to profit distribution
- related-party transactions with either shareholder or its affiliates
- material litigation, settlement and arbitration decisions
- entry into new business lines or territories
- major intellectual property transactions
- mergers, demergers, liquidation and changes of corporate form
Calibration matters more than length. Too few reserved matters leave a minority investor unprotected; too many make ordinary trading impossible, because every routine decision becomes a negotiation. Each reserved matter is also a potential deadlock, which is why the reserved list and the deadlock mechanism are designed in the same sitting. Board authority, representation and signature circulars are covered through our corporate governance practice.
⚖️ What Happens When a 50/50 Joint Venture Stops Agreeing
A 50/50 venture looks balanced because neither shareholder can be overruled. The same symmetry is what stops the company acting when the partners disagree, so equal ownership calls for more governance drafting than a majority structure, not less. The deadlock mechanism is the part of the agreement that decides whether a disagreement costs a month or a year.
A staged mechanism works better than a single remedy, because most disputes are resolvable if they reach the right people in time.
Escalation. The disputed matter goes from operational representatives to named senior executives or principals for a defined negotiation period, commonly 30 days (short enough to matter, long enough to be used). The clause is procedural rather than dramatic, and it resolves a surprising share of disputes simply by moving the conversation above the people who are already invested in the argument.
Independent input. Depending on the business, an independent director, expert determination for technical or valuation questions, or a narrowly defined casting mechanism can break the tie. A casting vote drafted without limits quietly converts a 50/50 venture into a controlled one, so the scope of any casting right is defined by subject matter, not left general.
Buy-sell mechanisms. Where cooperation cannot continue, the agreement provides put and call options, a valuation-based buy-out or a sealed bid procedure. Valuation method, trigger events, expert appointment, funding period and payment mechanics are agreed at the outset. Shotgun clauses deserve particular caution between partners of unequal financial strength, because the partner able to fund an immediate purchase holds a structural advantage regardless of who is in the right.
Judicial remedies. Under Article 531 of the Turkish Commercial Code, shareholders representing at least one tenth of the capital of a non-public joint stock company may ask the competent commercial court to dissolve the company for just cause. The court is not limited to dissolution: it may instead order payment of the real value of the claimant’s shares and remove that shareholder from the company, or adopt another acceptable solution. Litigation is the backstop, and treating it as the primary deadlock plan means accepting a timetable the partners do not control.
⚖️ Intellectual Property, Technology and Distribution
Where the foreign partner contributes technology, trademarks, software, know-how or products, the joint venture agreement is only one document in the package. The licence agreement is the one that decides what the foreign group still owns when the venture ends.
A licence agreement separates intellectual property owned before the venture from intellectual property created during it, and allocates ownership and permitted use of improvements, derivative works, software modifications, technical developments and data generated by the venture’s activities. Ventures that leave improvements unallocated usually find that the most commercially valuable output of the partnership is the part nobody agreed on.
These clauses do their real work at termination. The parties should already know whether the company may keep using the technology after separation, whether licences end immediately or after a transition period, and who owns improvements developed with the venture’s own personnel and budget.
Trademark protection is filed before market entry, not after it. Trademark rights are territorial, so a registration held elsewhere does not protect the venture in Turkey; under Industrial Property Law No. 6769 a Turkish registration runs for ten years and is renewable, and a mark that is not genuinely used for five years becomes vulnerable to revocation. Registration and enforcement run through our intellectual property practice.
A distribution or supply agreement is usually needed alongside, where one shareholder supplies the venture or the venture becomes the exclusive distributor of a shareholder’s products. Pricing, territory, exclusivity, minimum purchase commitments, quality standards, termination rights and the effect of that shareholder leaving the venture all belong in that agreement rather than in the shareholders’ agreement.
Exclusivity, territorial restrictions and resale conditions are reviewed under Turkish competition law as well as contract law. General drafting runs through our commercial contracts practice, and franchise-based structures are addressed in our franchise law in Turkey guidance.
⚖️ How Partners Get Out: Transfer Restrictions, Tag, Drag and Buy-Sell
Exit provisions are negotiated while both partners still expect success, and they are the provisions most often left to the end of the drafting process. The order should be reversed, because exit terms are the only part of the agreement whose fairness depends on nobody yet knowing who will use them.
A complete exit structure normally includes:
- Lock-up: no transfers during an agreed initial period, commonly two to three years.
- Right of first refusal or first offer: the non-selling shareholder gets the chance to buy before or alongside a third-party transfer.
- Tag-along: a minority shareholder can join a sale by the other shareholder on the same terms.
- Drag-along: a sale of the whole company can proceed where the agreed conditions are met.
- Put and call options: one party can require a purchase or sale on defined trigger events.
- Default transfers: serious breach, insolvency or a prohibited change of control moves the shares.
- Valuation: how price is calculated, who appoints the expert, and whether a discount or premium applies.
Each of these has to be tested against Turkish corporate law rather than imported unchanged from an English-law precedent. Enforceability and corporate effect depend on the company type, the nature of the shares, what the articles say and how the underlying obligation is drafted, and a drag-along that works perfectly in one structure can be unenforceable in another.
In a limited liability company the statutory transfer formalities become part of the exit timetable. The transfer is made by written agreement with notarised signatures and, as a rule, requires general assembly approval; where the general assembly does not reject an application within three months, approval is deemed given. An exit mechanism that assumes a share transfer can complete in days will not survive contact with that procedure.
Exit routes and repatriation mechanics for foreign shareholders are covered in our guide to exit strategies for foreign investors.
⚖️ Due Diligence Before Signing
Where the joint venture is formed by investing into an existing Turkish company, the investor acquires the company’s past as well as its future. Turkish commercial books and records must be retained for ten years, which sets the practical depth of a corporate review, and the findings of that review are what give the investor something to negotiate with.
A legal due diligence exercise typically covers:
- corporate records, articles of association and share ledger
- ownership and validity of shares
- board and general assembly resolutions
- representation and signature authority
- real property and material assets
- material contracts and their change-of-control provisions
- financing, security and guarantees
- licences, permits and regulatory approvals
- employment, senior management and severance exposure
- tax and social security matters, with tax advisers
- pending litigation, arbitration and enforcement proceedings
- intellectual property ownership and licences
- data protection compliance
- foreign investment reporting and corporate filings
The output is not a list of historical defects. Findings convert into conditions precedent, warranties, indemnities, price adjustment, remediation obligations or specific closing deliverables, and a due diligence report that does not change a single line of the transaction documents has not been used properly. Our method is described on the legal due diligence page.
Even a venture incorporated from scratch justifies a review of the proposed partner. Corporate authority to enter the venture, financial standing, existing exclusivity commitments, licences, litigation history and contractual restrictions can all decide whether that partner is capable of performing the business plan it has just signed.
⚖️ Competition Clearance and Regulatory Approvals in 2026
A joint venture falls within Turkish merger control where it creates an entity performing, on a lasting basis, all the functions of an autonomous economic entity. That full-function test comes first: a venture that merely pools specific activities of its parents is assessed differently from one that operates independently in the market with its own resources, management and access to customers.
Turkey raised its notification thresholds through Communiqué No. 2026/2, published in the Official Gazette of 11 February 2026 and amending Communiqué No. 2010/4. A transaction requires notification where either limb is met:
- the combined Turkish turnover of the transaction parties exceeds 3 billion TRY and the Turkish turnover of at least two transaction parties each exceeds 1 billion TRY; or
- in an acquisition, the Turkish turnover of the acquired asset or business, or in a merger the Turkish turnover of at least one transaction party, exceeds 1 billion TRY, and the worldwide turnover of at least one other transaction party exceeds 9 billion TRY.
Technology targets sit under a lower threshold. Where the party being acquired is a technology undertaking active in Turkey or with users or research and development operations in Turkey, the 1 billion TRY Turkish turnover figure applies as 250 million TRY. A technology joint venture that would be comfortably below the general thresholds can therefore be notifiable, and this is the point most often missed in cross-border structuring.
The 2026 amendments went beyond the numbers, revising the definition of transaction party, the criteria applied in substantive assessment and the parameters used when reviewing joint ventures. The Competition Authority updated its merger and acquisition guidelines to match, and the current texts, including the revised notification form, are published on rekabet.gov.tr.
Coordination between the parents is a second, separate analysis. Where the parent companies stay active in the same market, or in upstream, downstream or closely neighbouring markets, the Competition Board examines whether setting up the venture is likely to eliminate competition between them. Non-compete clauses, exclusivity, information exchange arrangements and territorial splits are reviewed as part of the same file.
Closing before clearance is the expensive mistake. A notifiable transaction implemented without approval is legally invalid until it is cleared, and under Law No. 4054 on the Protection of Competition the parties face an administrative fine calculated at one thousandth of their annual gross revenue. Regulated sectors add a further approval layer, with banking, payments, capital markets, energy, insurance, civil aviation and electronic communications each carrying their own consent or notification requirements that belong in the conditions precedent.
⚖️ Tax Structure of a Turkish Joint Venture
An incorporated Turkish joint venture is taxed as a resident company. The general corporate income tax rate is 25 per cent, rising to 30 per cent for banks, financial institutions, insurance and certain other regulated undertakings, and reduced rates apply to defined categories such as qualifying export and manufacturing income. The rate applicable to a particular venture is confirmed for the relevant fiscal period and sector rather than assumed.
Distributions to foreign shareholders carry their own layer. Dividend withholding was increased from 10 per cent to 15 per cent with effect from 22 December 2024, and a double taxation treaty may reduce that rate where the shareholder qualifies and the treaty conditions are documented. Treaty relief is claimed, not automatic (the certificate of residence is the document that decides it in practice), and the documentation requirement is usually what determines whether it is obtained.
Contractual ventures need a separate classification. An ordinary partnership and an arrangement qualifying as a business partnership (iş ortaklığı) for Turkish tax purposes are not interchangeable, and the classification follows the legal documentation and the nature of the activity. Choosing the structure without settling the tax classification means the partners discover their filing position after the project has started.
Three cross-border issues shape most JV tax structuring:
- Transfer pricing. Management fees, royalties, financing and supply arrangements between the venture and its shareholders or their group companies must meet Turkish transfer pricing rules and be documented accordingly.
- Thin capitalisation. Shareholder and related-party debt is tested against the statutory limits, and amounts above them are treated adversely for tax purposes.
- Permanent establishment. Personnel, service providers or representatives of a foreign shareholder operating in Turkey can create a taxable presence for that shareholder independently of its shareholding in the venture.
The efficient structure depends on shareholder jurisdictions, funding model, expected distribution policy, intellectual property arrangements and the contemplated exit. These questions are worked through with our tax practice and, where relevant, our double tax treaty guidance.
⚖️ Arbitration and Dispute Resolution
Cross-border joint ventures generally choose arbitration because it allows the parties to fix the seat, the language, the institution and, within the applicable rules, the tribunal. Turkey has been a party to the 1958 New York Convention since 1992, so a foreign award can be enforced here through the recognition and enforcement procedure rather than relitigated on the merits.
Four decisions carry most of the weight in the clause:
- Institution. The Istanbul Arbitration Centre (ISTAC) is the established domestic option for Turkey-related disputes; international ventures also consider the ICC and other institutions depending on the parties and the enforcement profile.
- Seat. The seat fixes the procedural law and the supervisory courts. An arbitration seated in Turkey with a foreign element falls under International Arbitration Law No. 4686, which is a materially different framework from a foreign seat.
- Language and tribunal. Three arbitrators suit substantial disputes; a sole arbitrator is proportionate for smaller claims, and the choice should track the value of the venture rather than the habits of the template.
- Interim protection. Urgent measures, asset preservation, misuse of intellectual property and confidentiality breaches need a route that works before a tribunal is constituted.
The arbitration clause and the deadlock mechanism answer different problems. Arbitration determines contractual rights; it does not decide that two shareholders should stop operating a business together. A venture that relies on arbitration as its separation plan converts a commercial disagreement into proceedings that can outlast the commercial opportunity.
Our arbitration practice advises on clause drafting and proceedings, and disputes heading for the Turkish courts are handled through our commercial litigation practice.
⚖️ How Our Joint Venture Practice Works
Oznur & Partners acts for foreign companies, investors and business groups across the full life cycle of a Turkish joint venture, from structuring through to separation.
Structuring. We review the proposed business, the contribution of each party, the ownership ratio, company type, governance structure, regulatory position and intended exit before the transaction documents are drafted, because the vehicle decides what the documents can achieve.
Term sheet. The commercial understanding is recorded in a term sheet that separates immediately binding provisions, such as confidentiality, exclusivity and costs, from provisions subject to definitive documentation. Getting that separation right prevents arguments about what was already agreed.
Due diligence. Where the transaction involves an existing company, assets, licences or a substantial local partner, we run or coordinate the legal and regulatory review and convert the findings into contractual protection.
Documentation. Depending on the deal, the package covers the joint venture or shareholders’ agreement, articles of association, share purchase or subscription documents, intellectual property licences, distribution and supply agreements, management arrangements, financing documents and security instruments.
Clearances. Where required, the timetable incorporates Competition Board notification and any sector-specific approvals, which are built into the conditions precedent rather than added at the end.
Formation and closing. We coordinate incorporation or share acquisition, corporate approvals, trade registry formalities, powers of attorney, capital procedures and the closing documents, together with our corporate law team.
After closing. Ongoing work includes board and general assembly support, capital increases, changes in representation authority, corporate compliance, commercial agreements and work permits for foreign executives. Continuing obligations are tracked through our corporate compliance practice.
Most corporate procedures can be handled without the foreign investor travelling to Turkey, using properly drafted powers of attorney. Documents executed abroad need authentication: Turkey has been a party to the 1961 Hague Apostille Convention since 1985, so an apostille suffices for documents from member states, while documents from other countries require consular legalisation. Turkish translation and local notarisation are separate requirements for use before registries, authorities and banks.
Our Istanbul team works with investors across Europe, the Gulf, Asia and North America, and the wider framework for international businesses is set out on our Turkish law for foreign investors page. Joint venture instructions are led by Fatih Oznur, founding and managing partner.
⚖️ Speak to a Joint Venture Lawyer in Istanbul
If you are negotiating a joint venture in Turkey, considering a partnership with a Turkish company, buying into an existing business or reviewing terms already on the table, the structure can be assessed before capital and control are committed. Our work covers the whole transaction: vehicle selection, term sheet, due diligence, shareholders’ agreement, articles of association, governance, funding, intellectual property, clearances, incorporation or acquisition, ongoing corporate support, deadlock and exit.
Send us the proposed ownership structure, the term sheet, the draft agreement or a short outline of the investment. We can identify the Turkish-law issues that matter and tell you which protections need to be in place before signature. If the structure looks right on paper but something about it feels unresolved, that feeling is usually worth acting on.
Schedule a Legal Consultation
Whether you are choosing between a company and a contractual venture, reviewing a shareholders’ agreement drafted by your partner, or facing a deadlock in an existing venture, our Istanbul corporate lawyers can assess the position and set out the available options.