Holding Company in Turkey
"Why establish a holding company in Turkey, and what are the tax and legal advantages?"
Quick Answer
A holding company in Turkey is typically set up as an A.Ş. or Ltd. to hold shares in subsidiaries; it can centralize governance and, subject to statutory conditions, may benefit from participation exemptions for dividends and certain capital gains—making it a common structure for group companies and cross-border investment planning.
Holding Company in Turkey: Legal Structure and Group Company Rules
In Turkey, a “holding company” is usually an operating or non-operating company whose main function is to hold shares in one or more subsidiaries. The Turkish Commercial Code sets the framework for corporate governance and, for group structures, addresses issues such as control, reporting, related-party transactions, and potential liability in parent–subsidiary relationships—points that should be reflected in the articles of association and internal governance documents.
Key Points to Remember
- Legal forms: A.Ş. or Ltd. (holding shares in subsidiaries)
- Group company considerations under the Turkish Commercial Code (control/related-party transactions)
- Tax planning: participation exemptions may apply to dividends/capital gains subject to conditions
- Corporate governance: board/shareholder resolutions, reporting, and audit obligations may apply
Practical Considerations for Businesses
For foreign investors, the practical design of a Turkish holding structure often depends on the investment roadmap (M&A vs. greenfield), financing and dividend flows, shareholder arrangements, IP/contract allocation within the group, and exit planning. A properly structured holding company can simplify future acquisitions, reorganizations, and share transfers, but it must be aligned with Turkish corporate governance and tax compliance requirements to avoid enforceability and audit risks.
Need Expert Legal Guidance?
We advise international groups on establishing a holding company in Turkey, including corporate formation, shareholder structuring, group governance, and tax-sensitive planning (including participation exemption considerations, where applicable).
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