An exit strategy for foreign investors in Turkey is the legal route, a share sale, asset sale or liquidation, that ends an investment and moves proceeds abroad.
Most foreign investors spend months planning how to enter Turkey and an afternoon thinking about how they will leave. The entry is negotiated, documented and celebrated. The exit is assumed: the shares will be sold one day, or the company will be closed, and the money will follow. Then the day arrives, and the investor discovers that the articles of association require the other shareholders’ consent, that the tax office still has a claim on a period three years back, that the liquidator must be a Turkish resident, and that the buyer’s lawyers have found the one document that was never filed.
None of these are exotic problems. They are the ordinary mechanics of Turkish company law, tax collection law and labour law, and they apply to every foreign shareholder whether the investment was a two-person limited company or a regional subsidiary. The difference between a clean exit and a costly one is rarely the law itself. It is whether the law was read before the exit began.
What does exiting an investment in Turkey actually involve? Three separate things that are often treated as one. The ownership has to change hands or end, which is a question of company law. The liabilities attached to the investment have to be closed or allocated, which is a question of tax, labour and contract law. And the proceeds have to leave the country, which is a question of foreign exchange and withholding tax. An exit that solves the first and ignores the other two is not finished.
Which exit route costs the least? The route that looks cheapest on paper often turns out to be a costly saving. Liquidating a company avoids the discount a buyer will demand, but it takes months, requires a Turkish resident liquidator, and exposes every unpaid liability to creditors. A share sale moves faster and transfers the history to the buyer, which is precisely why the buyer prices that history into the offer. The cheapest route depends on what the company carries, not on what the route costs.
When should an exit be planned? The right moment to plan the exit is the day you enter. The company type you choose, the transfer restrictions you accept in the articles, the clauses you sign in the shareholders’ agreement and the way you document the original capital all decide how easily you will leave, years before leaving is on the agenda. An exit planned at the end can only work with the structure it inherits.
How long does it take to get the money out? From a few weeks for a clean share sale to six months or more for a liquidation. The transfer itself is not the slow part: Foreign Direct Investment Law No. 4875 allows sale and liquidation proceeds to be transferred abroad freely through banks. What takes time is everything that must be true before a bank will send the money: a registered transfer, a closed tax position, and documents that match.
This page covers the exit of a solvent investment: selling shares, selling the business, or closing the company voluntarily. Insolvent companies, restructuring and bankruptcy follow different procedures and are covered on our page for the bankruptcy lawyer in İstanbul, and the buy-side process is set out on our page for the mergers and acquisitions lawyer in Turkey.
⚖️ Which Exit Route Fits: Share Sale, Asset Sale or Liquidation?
The route follows the company, not the investor’s preference, and every exit strategy for foreign investors in Turkey starts by reading what the company carries.
A share sale transfers the company itself, with its history, contracts, employees, licences and liabilities, to a new owner. The investor leaves; the company stays. A share sale fits a business that is operating, has value as a going concern, and has a buyer who wants the whole of it, including the parts that cannot easily be moved, such as permits, an incentive certificate, or a lease on favourable terms.
An asset sale transfers what the company owns, not the company. The investor keeps the corporate shell, sells the factory, the real estate, the brand or the customer contracts, and then closes the shell or keeps it. An asset sale fits when the buyer wants the operation but not the history, or when the investor holds assets more valuable than the company that owns them.
A liquidation ends the company. Its assets are turned into money, its debts are paid, and whatever remains is distributed to the shareholders. A liquidation fits when there is no buyer, when the business has run its course, or when the investor wants certainty more than price. It is also the route most often misunderstood, because investors assume a company that stops trading simply ceases to exist. It does not.
In practice, the three routes combine. A foreign parent may sell the operating business as assets, then liquidate the company that sold them. A minority investor may sell shares to the majority partner under a clause that was negotiated years earlier. The question is never only which route, but in which order, and which liabilities each step leaves behind for the investor to answer for.
⚖️ Why Is the Exit Decided When You Enter?
Because the documents that govern the exit are signed at the beginning, when the exit feels distant enough to be ignored.
The choice between a limited liability company (limited şirket) and a joint stock company (anonim şirket) is the first exit decision most investors make without knowing it. Shares in a limited company are transferred by a written agreement with notarised signatures, and the transfer requires the approval of the general assembly unless the articles provide otherwise. Shares in an unlisted joint stock company are transferred more flexibly, by endorsement and delivery for registered shares, subject to whatever restrictions the articles impose. Our comparison of the limited versus joint stock company in Turkey sets out the difference at the stage when it can still be chosen.
The articles of association are the second decision. Transfer restrictions, pre-emption rights and approval requirements that look protective when two partners trust each other become obstacles when one of them wants to leave. A clause that allows the board to refuse a transfer, or the general assembly to withhold approval, is a clause that can hold the departing shareholder in place for as long as the others choose.
The shareholders’ agreement is the third. Tag-along and drag-along rights, rights of first refusal, put and call options, deadlock mechanisms and valuation formulas are exit clauses written in advance. An investor who negotiated them has a route out; an investor who did not has only a negotiation. The drafting of those clauses is covered on our page for the shareholder agreement lawyer, and joint ventures, where deadlock is the usual reason for exit, on our page for the joint venture lawyer in Turkey.
The last entry decision is documentary. The foreign capital that came in must be traceable when the proceeds go out: bank records of the original capital contribution, registration of the capital increase, and the trade registry entries that show who owned what and when. An investor who can produce that trail at exit leaves smoothly. An investor who cannot spends the first weeks of the exit reconstructing it.
Thinking about leaving? Read your articles and agreements before you call a buyer.
Send us your articles of association, shareholders’ agreement and latest trade registry extract, and we will map which exit routes are open to you and what each one leaves behind.
⚖️ Am I Still Liable After I Sell My Shares?
Possibly, and for a shareholder in a limited company, the answer is often yes.
Under Article 35 of Law No. 6183 on the Procedure for the Collection of Public Receivables (Amme Alacaklarının Tahsil Usulü Hakkında Kanun), partners of a limited company are liable, in proportion to their shares, for public receivables that cannot be collected from the company. A partner who transfers their share does not leave that liability behind: the transferring partner remains liable for public receivables relating to periods before the transfer, jointly with the partner who acquired the share.
The practical effect is that a foreign shareholder can sell a limited company stake, transfer the proceeds home, and receive a demand from the Turkish tax office years later for taxes the company failed to pay while that shareholder was a partner. The liability does not depend on fault; it attaches by operation of law once the conditions are met. Courts have limited it in specific situations, such as penalties arising from the company’s later conduct, but the core exposure remains.
The rule is one of the strongest arguments for choosing the company type with the exit in mind. The partner liability under Article 35 is a feature of the limited company. Shareholders of a joint stock company are not exposed in the same way, although directors and legal representatives of both company types can be held liable for unpaid public receivables in their capacity as representatives.
Liability can also outlive the exit through contract and employment. A seller who gives warranties and indemnities in a share purchase agreement remains exposed for as long as the claims period runs. And where the exit is an asset sale that transfers a workplace, the transferring employer remains jointly liable with the buyer for certain employee claims, as set out below. Liability after exit is not an exception to plan around; it is part of the exit.
⚖️ How Do I Sell My Shares in a Turkish Company?
Shares in a limited company are sold by a written share transfer agreement with notarised signatures, followed by approval of the general assembly unless the articles provide otherwise, and registration of the transfer with the trade registry. Under Article 595 of the Turkish Commercial Code No. 6102 (Türk Ticaret Kanunu, TTK), the transfer does not take effect against the company until it is approved.
Approval is the point at which a limited company exit most often stalls. Unless the articles provide otherwise, the general assembly of a limited company may refuse to approve a share transfer, and the articles may set out the grounds and conditions. A foreign shareholder holding a minority stake in a limited company should therefore read the articles before negotiating with a buyer, because a buyer acceptable to the seller may not be acceptable to the remaining partners.
Registered shares in an unlisted joint stock company are transferred by endorsement and delivery of the share certificate, or by assignment where no certificate has been issued, and the transfer is recorded in the share ledger. Where the articles restrict transfer, the board may refuse approval only on the grounds the law permits, including an offer to buy the shares at their real value, under Articles 492 and 493 of the TTK.
A share sale above certain turnover thresholds requires clearance by the Turkish Competition Authority (Rekabet Kurumu) under Article 7 of the Law on the Protection of Competition No. 4054 (Rekabetin Korunması Hakkında Kanun). The thresholds are measured against the Turkish turnover of the parties and are revised from time to time, so whether a particular sale is notifiable is assessed against the communiqué in force at signing. A notifiable transaction closed without clearance is not valid.
The buyer’s due diligence shapes the price. A buyer will examine the trade registry history, tax filings for the open assessment period, employee files, real estate titles, permits and litigation. Every gap the buyer finds becomes either a price reduction, a specific indemnity or a retention from the purchase price. A seller who runs a vendor review before marketing the shares controls that list; a seller who does not lets the buyer write it.
⚖️ Selling the Business Instead of the Company: Asset Sales and Employees
An asset sale transfers individual assets, contracts or the whole commercial enterprise, while the selling company remains in place. Where a business is transferred with its assets and liabilities as a whole, Article 202 of the Turkish Code of Obligations No. 6098 (Türk Borçlar Kanunu) makes the transferee liable to creditors, and keeps the transferor jointly liable for two years.
Employees transfer with the workplace. Under Article 6 of Labour Law No. 4857 (İş Kanunu), when a workplace or part of it is transferred, the employment contracts pass to the new employer with all rights and obligations. The transferring and acquiring employers are jointly liable for debts that arose before the transfer and are due on the transfer date, and the transferring employer’s liability is limited to two years from the transfer.
Severance pay (kıdem tazminatı) is the employee liability that most often surprises foreign sellers. Severance accrues on the whole length of service, and in a workplace transfer the service with both employers is counted together. A buyer of the business will therefore ask who carries the accrued severance for the period before the transfer, and the answer usually becomes a price adjustment rather than a legal question.
Real estate sold as part of an asset sale is transferred at the Land Registry Directorate, and title deed fees are charged on the declared value, customarily at two percent each for buyer and seller. Plant and machinery acquired under an investment incentive certificate (yatırım teşvik belgesi) carry their own conditions: assets that benefited from customs or VAT exemptions may not be freely sold before the incentive conditions are met, and an early sale can trigger repayment of the exempted taxes.
An asset sale leaves the seller with a company that still exists. The company holds the sale proceeds, has to pay corporate tax on any gain, and must then either distribute the money to the shareholders, which triggers withholding tax on the distribution, or be liquidated. An asset sale is therefore rarely a complete exit on its own; it is usually the first half of an exit that ends in liquidation.
⚖️ How Long Does It Take to Close a Company in Turkey?
A voluntary liquidation of a solvent Turkish company usually takes four to eight months from the shareholders’ resolution to deregistration, and the statutory minimum is set by a three month creditor waiting period. Speed depends mainly on the tax office’s final review and on how quickly receivables are collected and assets sold.
Liquidation begins with a resolution of the general assembly to dissolve the company, taken with the majority the law or the articles require, and registration of that resolution with the trade registry. From registration, the company trades under its name with the addition “in liquidation” (tasfiye halinde), and its purpose narrows to winding up its affairs. The company’s legal personality continues until deregistration.
A liquidator is appointed in the same resolution. Under Article 536 of the TTK, at least one liquidator must be a Turkish citizen resident in Turkey. A foreign shareholder with no Turkish resident in the company’s management must therefore appoint a local liquidator, often a lawyer or an accountant, who takes on personal responsibility for the conduct of the liquidation.
The liquidator prepares an opening balance sheet and calls the creditors. Under Article 541 of the TTK, known creditors are notified by registered letter, and other creditors are called by three announcements, published at one week intervals in the Turkish Trade Registry Gazette (Türkiye Ticaret Sicili Gazetesi), on the company’s website and as the articles require. Amounts owed to creditors who do not come forward are deposited with a bank.
Under Article 543 of the TTK, the remaining assets may not be distributed to the shareholders until three months have passed from the third call to creditors. The period was reduced from six months by Law No. 7341, published in the Official Gazette on 6 November 2021. The court may allow distribution before the three months expire where there is no danger to creditors.
The liquidator files the final tax returns, the tax office closes the company’s tax registration, and the final liquidation balance sheet is approved by the general assembly. The company is then deregistered from the trade registry. If an asset or a claim is discovered after deregistration, Article 547 of the TTK allows the company to be re-registered by court order for a supplementary liquidation.
⚖️ Can I Just Leave the Company Dormant?
A dormant company is not a closed company. A Turkish company that stops trading remains registered, remains a taxpayer, and remains under the obligation to keep books, file returns and hold general assemblies, and its partners and representatives remain exposed to the liabilities that attach to those obligations.
Investors who leave a company dormant usually do so to avoid the cost of liquidation. The saving is temporary. Every year of dormancy adds filing obligations, accounting fees and the risk of penalties for missed filings, and those penalties accrue to a company whose partners, in the case of a limited company, carry personal exposure for uncollected public receivables under Article 35 of Law No. 6183.
Provisional Article 7 of the TTK allows the trade registry to remove certain inactive companies from the register without a liquidation, after a notification procedure. Removal of a dormant company by the registry is not a planned exit for the investor. Assets left in a removed company are dealt with under the law rather than by the shareholders, and creditors and other interested parties may apply to court for the company to be revived.
A dormant company also leaves the proceeds problem unsolved. Money left inside a Turkish company cannot be repatriated to the shareholders without a distribution or a liquidation, and each of those steps has its own tax treatment. An investor who wants the money abroad needs one of those steps sooner or later; dormancy only postpones the moment and adds the cost of waiting.
⚖️ Can I Send the Money Home?
Yes. Under Article 3 of Foreign Direct Investment Law No. 4875 (Doğrudan Yabancı Yatırımlar Kanunu), foreign investors may freely transfer abroad, through banks, net profits, dividends, proceeds from the sale or liquidation of all or part of the investment, compensation, and amounts arising from licence and similar agreements.
The freedom to transfer covers the money, not the tax. Dividends paid by a Turkish company to a non-resident shareholder are subject to withholding tax, raised from 10 percent to 15 percent by Presidential Decision No. 9286, published in the Official Gazette on 22 December 2024 (No. 32760) and applicable to dividends distributed from that date. A double tax treaty between Turkey and the shareholder’s country of residence may reduce the rate where its conditions are met.
Sale proceeds paid by a buyer reach the seller directly and do not pass through the company, so the withholding on dividends does not apply to them. Liquidation proceeds are different: the part of a liquidation distribution that represents retained profits is treated in a way comparable to a profit distribution, while the return of paid-in capital is not. The split between the two is one of the first calculations in any liquidation plan.
Proceeds are paid in Turkish lira when the buyer or the company holds Turkish lira, and are converted through a bank before transfer. Banks will ask for the documents that link the money to the investment: the share transfer agreement and its registration, the liquidation balance sheet and deregistration, or the dividend resolution and the withholding tax return. A transfer request that arrives with those documents is routine; one that arrives without them is not.
The text of Foreign Direct Investment Law No. 4875 is published on the official legislation portal, and the provisions on transfers abroad have remained in force without material change since the law was adopted in 2003. Treaty rates for dividends and capital gains are set out country by country on our page for the double tax treaty in Turkey.
⚖️ Tax on the Way Out: Who Pays on a Sale and When
The tax on an exit depends on who sells. A Turkish resident company selling shares in another Turkish company it has held for at least two years may benefit from a partial corporate tax exemption under Article 5, paragraph 1, subparagraph (e) of the Corporate Tax Law No. 5520 (Kurumlar Vergisi Kanunu), subject to conditions on holding the exempt portion.
A foreign company selling shares in a Turkish company directly is in a different position. The gain may be taxable in Turkey under Turkish domestic law, but most double tax treaties allocate the right to tax gains on shares to the seller’s country of residence, with exceptions for companies whose value derives mainly from Turkish real estate. Whether a given sale is taxable in Turkey is therefore a treaty question first and a domestic question second.
The choice between distributing profits before a sale and selling with retained earnings in the company is a tax decision. A distribution before the sale is subject to the 15 percent dividend withholding unless a treaty reduces it; leaving the earnings in the company increases the share price and moves the tax question to the gain on the sale. The arithmetic differs for every structure and every treaty, and it is worth running before the price is agreed.
An asset sale is taxed at the company level. The company pays corporate tax on the gain at the general corporate tax rate, and then faces withholding when it distributes the net proceeds to its foreign shareholders. Exemptions for gains on real estate held by companies have been narrowed for property acquired after 15 July 2023, which makes the date of acquisition of each property relevant to the calculation.
The open tax period also travels with the company. The tax office may assess taxes for prior years within the statutory limitation period, which in most cases runs for five years from the beginning of the year following the year in which the tax arose. A buyer will price that window into a share deal; a liquidating seller will see it reflected in the time the tax office takes to close the registration. Our page for the tax lawyer in Turkey covers assessments and disputes in detail.
⚖️ Share Sale, Asset Sale and Liquidation Compared
The three exit routes differ in speed, in the liabilities they leave with the investor, and in how the proceeds are taxed. The table summarises the differences for a solvent company with a foreign shareholder, assuming no insolvency proceedings and no dispute between the shareholders.
| Criterion | Share sale | Asset sale | Liquidation |
|---|---|---|---|
| What changes hands | The company, with its history | Selected assets or the business | Nothing; the company ends |
| Typical duration | Weeks to a few months | One to several months, then a distribution or liquidation | Usually four to eight months; minimum 3 month creditor period |
| Approvals | General assembly (limited company) or board under the articles; competition clearance above thresholds | Corporate approvals; land registry for real estate; third party consents for contracts | General assembly resolution; Turkish resident liquidator |
| Liability left with the seller | Warranties; for limited company partners, pre-transfer public receivables (Law 6183, Art. 35) | Two years joint liability on business transfer (Code of Obligations, Art. 202) and workplace transfer (Labour Law, Art. 6) | Liquidator responsibility; supplementary liquidation if assets appear later |
| Tax on proceeds | Gain taxed according to seller type and treaty | Corporate tax on gain, then withholding on distribution | Corporate tax on liquidation profit; distributed profits treated comparably to dividends |
| Fits when | The business is operating and a buyer wants all of it | The buyer wants the operation without the history | There is no buyer, or certainty matters more than price |
The table shows why a route chosen for speed alone can cost the most. A share sale is the fastest exit, but for a limited company partner it leaves a public receivables exposure that a liquidation would have closed. A liquidation is the slowest exit, but once the company is deregistered, the investor answers only for what the liquidation itself got wrong.
⚖️ Exiting an Investment That Supports Turkish Citizenship
An investor who acquired Turkish citizenship through a fixed capital investment or through real estate held for the program has made a three year commitment, and an exit inside those three years is not only a commercial decision. The eligibility of a citizenship acquired by investment depends on the investment being held for the period the program requires.
For the real estate route, an undertaking that the property will not be sold for three years is annotated in the land register at registration. A company cannot hold the qualifying property for its shareholder’s application, so the real estate route rarely overlaps with a corporate exit; the overlap arises where an investor holds both a qualifying property and a company that uses it.
For the fixed capital investment route, the investment certified for citizenship is the company’s capital or assets, and a share sale or liquidation inside the commitment period goes to the heart of the eligibility. The 2026 cancellations of citizenship decisions on a large scale, analysed on our page on Turkish citizenship revoked in 2026, show that files approved years earlier can still be reviewed.
An investor in that position should sequence the exit around the commitment date rather than around the buyer’s timetable. A sale signed before the commitment period ends and completed after it, or an asset sale structured so that the certified investment remains in place, can preserve the position that a straightforward early sale would put at risk. That is a decision to take with both the corporate and the citizenship file in view.
⚖️ The Exit Was Written at the Entry
Every exit from Turkey reads documents that were signed at the beginning: the company type, the articles of association, the shareholders’ agreement, the record of the capital that came in. By the time an investor decides to leave, most of the decisions that determine how the exit will go have already been made, often without anyone noticing that they were exit decisions at all.
What remains to be decided in an exit strategy for foreign investors in Turkey is sequence: which route, in which order, with which liabilities closed first and which allocated to the buyer. An exit that is sequenced around the law, rather than around the buyer’s timetable or the cost of a liquidator, leaves the investor with the proceeds abroad and nothing left in Turkey that can still reach them.
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Whether you are selling your shares to a partner or a third party, selling the business and closing the company, or winding down an investment that no longer fits, our Corporate and Investment Lawyers in İstanbul can map your exit before you commit to a route.