Share transfer in a Turkish Ltd. with a foreign partner: notary, trade registry, bank and tax

Changing a partner in a Limited Şirket is a formal procedure: a notarised contract, usually a general assembly decision, entries in the share ledger and the trade registry, and then an update at the bank. A foreign seller or buyer adds identity, apostille and translation steps. This guide follows the order in which the steps happen and says where a point must be confirmed with the notary or an accountant.

What the Commercial Code requires

Transfers of shares in a Limited Şirket are governed by Article 595 of the Turkish Commercial Code (Law No. 6102). The transfer agreement must be in writing and the parties’ signatures must be certified by a notary. Without that form the agreement is not valid, and the same form applies to a preliminary contract to transfer.

• Read the articles of association first: they may ban transfers or add pre-emption and buy-back rights.
• General assembly approval is required unless the articles say otherwise (Art. 595/2).
• If the assembly does not refuse within three months of the application, approval is treated as given (Art. 595/7).

Shares that pass by inheritance, marital property regime or enforcement follow Article 596: no approval is needed, but the company may reject the acquirer within three months of learning of it. A sale between foreign parties follows the same rule as a domestic one; nationality changes the paperwork, not the law.

Foreign seller or buyer: signing and documents

A foreign individual normally signs before a Turkish notary in person, with a passport and, in practice, a Turkish tax number. Ask the notary in advance which identity and tax-number documents it needs, because practice can differ between notary offices.

If the foreign party cannot attend, it can sign a power of attorney (vekâletname) abroad. A document signed before a foreign notary needs an apostille from the issuing country and a Turkish sworn translation. Turkey accepts apostilles under the 1961 Hague Convention; documents from non-member states go through consular legalisation.

A foreign company as seller or buyer acts through its representative, who follows the steps above. The company additionally provides the papers below. Allow time for the apostille and translation before the notary appointment, and bring originals together with the translations:

• a certified extract from its home registry showing that it exists;
• a document naming who may sign for it and the decision approving the deal;
• an apostille on each paper, then a sworn translation.

Share ledger and trade registry

After the contract is signed and approved, the company records the transfer in its share ledger (pay defteri) under Article 594. The managers then apply to the trade registry (ticaret sicil müdürlüğü) within 30 days under Article 598 and Article 103/1 of the Trade Registry Regulation, so that the new partner appears in the registry and in MERSİS.

• the notarised share transfer agreement;
• the notarised copy of the general assembly approval, unless the articles say otherwise;
• a copy of the relevant page of the share ledger.

If the managers do not file within 30 days, the departing partner may ask the registry to remove their name (Art. 598). If the number of partners falls to one, the managers must be informed in writing within seven days and register the single-partner status (Art. 574/2). Processing time depends on the registry.

Informing the bank and updating KYC

A registry change does not reach the bank on its own. Tell each bank where the company holds an account, in writing, that the shareholder has changed. The bank will usually ask for the new trade registry extract or gazette, an updated signature circular if signatories change, and the new shareholder’s passport.

Under the anti-laundering rules (Law No. 5549 and its measures regulation) the bank re-identifies every natural person holding more than 25 percent (gerçek faydalanıcı). It may ask for the purchase price, the source of the buyer’s funds and, for a corporate buyer, the ownership chain up to the individual.

• Notify the bank before the next payment, not after.
• Withdraw the departing partner’s authority if they were a signatory.
• Keep the bank’s written acknowledgement.

Tax points to check before signing

A transfer agreement with a stated price may be subject to stamp tax (damga vergisi). Confirm the position with the notary and the accountant; we do not quote rates here because rates and ceilings change. The seller’s gain, if any, is taxed differently for an individual and for a company, and differently for a Turkish tax resident and a non-resident.

Check three things before signing: how long the seller held the shares, whether a double tax treaty between Turkey and the seller’s country applies, and how the price compares with the nominal capital and book value. Keep the contract, payment proof and valuation together in one file.

Tax is decided by the Revenue Administration (gib.gov.tr) under the law in force on the date of sale. Have a licensed accountant (SMMM) confirm the result in writing before the notary appointment. Keep that confirmation with the contract, so the answer is ready if the bank asks how the price and the tax treatment were checked.

Sources

• mevzuat.gov.tr — Turkish Commercial Code No. 6102, Articles 574, 594, 595, 596 and 598
• ticaret.gov.tr — Ministry of Trade: trade registry and Trade Registry Regulation
• mersis.gtb.gov.tr — MERSİS, Central Registry Recording System
• gib.gov.tr — Revenue Administration: stamp tax and income/corporate tax information

Questions