Initiatives to improve the investment environment in Turkey


The Law Amending Certain Laws for the Purpose of Improvement of the Investment Environment, Law No: 6728 has been published in the Official Gazette dated 9 August 2016 and numbered 29796 (“Amending Law”). It amends several laws including the (i) Stamp Duty Law No: 488, (ii) Law of Fees No: 492, and (iii) provisions of the Turkish Commercial Code Law No: 6102 on the incorporation of entities. With these amendments, the Turkish government aims to reduce the cost of foreign direct investment in Turkey.

Probably the most important change brought by the Amending Law that is expected to have a significant effect on mergers and acquisitions is the abolishment of applicable stamp duty and other fees (such as notary fees for limited liability companies’ share transfers) on share purchase agreements concerning the shares of joint stock and limited liability companies. The previous practice was that each copy of a share purchase agreement signed by the parties was separately subject to stamp duty at a rate of 0.948% calculated over the highest monetary amount set forth in the document, subject to a cap of TRY 1,797,117.30 (applicable in 2016 and re-evaluated on an annual basis). Other commercial agreements shall still be subject to stamp duty ranging from 0.189% to 0.948%, unless there is an exemption defined under the Stamp Duty Law. However, if these agreements are executed in multiple copies, only one copy shall now be subject to stamp duty.

The Amending Law is also beneficial for banks and other financial institutions as it has extended the current exemption under the Stamp Duty Law which covered loans and loan repayments to include an exemption for the transfer of loans and loan receivables by banks and financial institutions.

The Amending Law also offers less bureaucracy and costs in terms of establishing a joint stock or limited liability company in Turkey. Investors will no longer be required to (a) submit a founders’ declaration[1], or (b) have notarised signature specimens of the individual authorised representatives of an entity (to the extent that such individuals sign written declarations before the trade registry officers), or (c) have the initial articles of associations notarised (to the extent that this is signed by the founders before trade registry officers). Additionally, with the changes brought by the Amending Law, even if the articles of associations are notarised, such document shall be exempt from certain notarial fees.

As a separate note, the Amending Law also brings novelties to the postponement of bankruptcy procedures. In this regard, it details the provisions regarding the content and timing of the postponement of bankruptcy plan to be submitted to the court; amends the court proceedings and provides legal remedies that the debtors and other stakeholders can take against the postponement of bankruptcy. However, during the term of the state of emergency, which began on 21 July 2016 for an initial period of 3 months, motions from joint stock companies, limited liability companies and cooperatives for the postponement of bankruptcy shall not be accepted by courts. As a result, these new rules will only become effective after this restriction is lifted.



[1] A founders’ declaration was one of the necessary documents to incorporate an entity where founders explain their interest in the company, relationship between themselves and other group company (to the extent the newly-formed company belongs to a company group) and details on the capital in kind to be invested in the company, if any.