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What to do if you want to purchase a company in Turkey?
Many business people from around the world prefer purchasing a company in Turkey rather than start one from scratch.
First of all, if you are interested in starting a company from scratch, you can check out our article about; “Establishing a Company in Turkey” and get the necessary information about the topic.
Many advantages encourage entrepreneurs to invest in Turkey’s economy by purchasing a company there. If you want to buy a limited liability business, a joint-stock company, or even a partnership, you can hire an experienced Turkish lawyer who will provide you all the required information and recommendations, as well as legal assistance.
If you are keen on purchasing a company in Turkey, there is no need to go through the entire registration process. You are required to follow the essential formalities when deciding to buy a company instead of registering a new company. Although many countries allow foreign investors to buy a ready-made company, they are a little bit different from others when it comes to the laws in Turkey.
The economic activity of a company determines its existence. Foreign investors choose ready-made companies when they need to get their business up and running quickly. Investors mostly choose a company that is already well-known in the industry they prefer.
Purchasing a Company in Turkey
As per the Turkish Company Law, a company director must visit Turkey to change the Articles of Association of the company.1 It’s also important to prove to the local tax office that a company is doing a valid business.
If you are curious about the corporate taxation system in Turkey, you check out our article about; “Corporate Taxation in Turkey” and learn more about the matter.
In the past few years, many foreign investors have been shown their interest in purchasing a company in Turkey. One of the main reasons for this interest is the favorable economic environment.
Some of the foreign investors prefer to buy a company in Turkey because they want to engage in the share transfer process for the existing registered company rather than start a new company from scratch, this speeds up the process rapidly.
When it comes to the Turkish Legal System and companies, they are divided into two categories: which are Private Companies and Capital Companies. Private Companies are Collective Companies, whereas Capital Companies are Limited Liability Companies and Joint-Stock Companies. Individual Companies are generally not preferred by foreign investors.
How to legally buy a company in Turkey?
The Turkish Commercial Code is an important legislature that manages the accurate transfer of shares. The parties are required to agree on the new structure of the company before starting the negotiation procedure. It also involves the purpose as well as the assets.
The Letter of Understanding (LOU) and the Share Purchase Agreement (SPA) are the two primary documents involved in the transfer (or acquisition) of the company in Turkey.
The LOU is prepared under specific terms and conditions, and it also comprises the details of the company’s new owner. This also includes the details about the financial statements, purchase payments, access to the company’s accounts, and other vital information.
When you buy a company in Turkey, the bank statements and transactions involved in the process are controlled and analyzed by the Banking Regulatory Supervision in Turkey.
At the same time, it’s vital to take the help of an expert when buying a company in Turkey. The expert must know the legal framework for Mergers and Acquisitions (M&A) transactions in Turkey. The significant legal matters hold the control of the company you are going to buy. Experts can also assist in determining the implications of the agreements for the company’s main directors.
What are the tax aspects when buying a company in Turkey?
Tax aspects play a significant role when buying a company in Turkey. So, the hired M&A advisor must know everything about how tax matters affect buying a Turkish business.2 The advisor must be knowledgeable of the tax framework for M&A transactions in Turkey.3
The best idea is to set up the acquisition in a tax-friendly way so that you won’t have to deal with any surprise due to tax issues at a later stage.
What are the characteristics of an existing company in Turkey?
Buying a ready-made company in Turkey attracts various investors. This is due to some of the following:
- These companies are already incorporated, and they need just a few modifications to start their economic activities.
- Even if these companies have had an economic activity before, the new owner can change the purpose of these companies.
- These companies are available with tax identification and VAT numbers. Also, they don’t require tax registration.
- Though these companies can be used for any economic activity in the country, they can also be run as offshore companies.
- These companies are available with bank accounts, but these accounts can be changed along with other alterations.
- Most of these companies are registered as Private Limited Liability, which means they are offering various benefits to the owner/investor.
Purchasing a company in Turkey is a simple process that can be completed in a matter of days. In Turkey, there are company registration agencies who can assist you in buying a company swiftly.
Why do investors prefer to purchase a ready-made company in Turkey?
Buying a registered company in Turkey means you will get its trading background as well as the staff that is already aware of how things run in the company. This also helps in having access to the database of clients. This way, you don’t need to start looking for new clients because the company already has its own client portfolio.
Already registered business in Turkey is an excellent investment with numerous benefits. With the help of the companies history, you can quickly analyze if there is any change required or improve certain areas to understand the necessities of the company better.
For foreign investors, it’s recommended to hire a local accountant who can help you analyze the business’s value and assets before making any decision. They can also help with VAT registration in Turkey. It’s also advised to take the help of an experienced lawyer or an expert about purchasing a company in Turkey.
