Due Diligence in Turkey for Foreign Buyers

What a Turkey due diligence review should cover

Start by defining the transaction perimeter: the buyer, seller, target entities, Turkish branches, subsidiaries, material assets and the business activities included in the deal. A share acquisition leaves the buyer with the target entity and its existing liabilities, subject to the transaction documents and applicable law. An asset transaction raises different questions about title, transfer formalities, contracts, employees, licences and liabilities. The review should follow the structure actually being negotiated.

Core legal workstreams

• Corporate status and authority. Confirm the target’s legal form, registration details, capital, current shareholders, directors, signing powers, constitutional documents, shareholder and board approvals, branches and material filings. Check whether the proposed seller owns the interests it proposes to transfer and whether transfer restrictions, pre-emption rights or required consents apply.
• Commercial contracts. Review key customer, supplier, distribution, franchise, loan, lease, service and technology agreements. Look for change-of-control clauses, assignment restrictions, exclusivity, minimum purchase commitments, termination rights, renewal dates, foreign-law clauses, dispute clauses, guarantees and contractual penalties.
• Disputes and regulatory exposure. Request a schedule of court cases, arbitration, enforcement proceedings, administrative investigations, notices and threatened claims. Verify licences and permits with the responsible authority where possible. For a transaction that may trigger merger control, check the Turkish Competition Authority’s current rules and guidance before signing or closing.
• Employees and social security. Review employment terms, senior management arrangements, wage and leave records, benefits, workplace rules, active disputes, termination risks and the status of any foreign employees. Identify obligations that may transfer or require action at closing.
• Assets and intellectual property. Confirm title or usage rights for real estate, equipment, trademarks, patents, software, domains and other critical assets. Check registrations, licences, security interests, co-ownership, renewal dates and whether the target has the rights it needs to continue operating after closing.
• Data protection and information security. Map the personal data the target holds, its purposes and recipients, retention practices, processors, security incidents and cross-border data flows. Limit data-room access to what is necessary and use appropriate safeguards for personal or commercially sensitive information.
• Tax, customs and sector rules. Coordinate with tax and financial advisers on tax filings, audits and exposures. Depending on the business, also review customs, product, environmental, competition, consumer, financial-services or other sector-specific requirements.

Initial document request checklist

How to test a finding

A document-room statement is a lead, not always proof. Compare it with the underlying agreement, registry record, approval, payment evidence or correspondence. Ask who prepared the document, whether it is current, whether it is complete and whether another entity in the group is the actual contracting party. Where a record cannot be independently verified, identify that limitation rather than treating the issue as cleared.

Turn findings into deal protection

Classify findings by likelihood, financial exposure, urgency and whether they can be fixed before closing. A missing approval may call for a condition or consent; a quantifiable liability may affect the price or be covered by a tailored indemnity; a continuing compliance issue may require a post-closing covenant. An escrow can secure a defined obligation only if the holder, release triggers, claim procedure and expiry are clearly agreed. See our guide to escrow agreements for those mechanics.

For the buyer-side work beyond the investigation, see our Türkiye M&A transaction advisory guide, covering deal structure, negotiation and closing.

Do not use a general warranty or a broad holdback as a substitute for understanding a specific risk. Match each protection to the identified facts, set a clear claim notice process, and check that the contractual remedy works with the governing law and dispute-resolution clause.

Practical sequence for an international buyer

1. Agree the transaction perimeter, review scope, data-room protocol and confidentiality protections.
2. Collect current corporate and ownership records, then verify the seller’s authority and any transfer restrictions.
3. Review material contracts, disputes, workforce, assets, permits and compliance against the buyer’s planned use of the business.
4. Escalate gaps for targeted follow-up and coordinate legal findings with financial, tax and technical diligence.
5. Convert verified findings into closing steps, price mechanics, warranties, indemnities or post-closing actions.

The Ministry of Trade explains how the Turkish trade registry operates through its official Trade Registry information and MERSİS. Buyers should also check the Competition Authority’s current merger and acquisition guidance and the Personal Data Protection Authority’s English translation of Law No. 6698 where those subjects are relevant.