Amendments to the Turkish Commercial Code (2024–2025)
In 2024, significant amendments to the Turkish Commercial Code (Law No. 7511, published in the Official Gazette on May 29, 2024, No. 32560) came into effect, continuing the reform of corporate governance and financial reporting initiated in 2011. These changes align with EU standards and simplify business procedures, which is particularly relevant for foreign investors, including Russian entrepreneurs relocating to Turkey.Key Changes:
1. Increased Minimum Share Capital:The minimum capital for joint-stock companies (Anonim Şirket, A.Ş.) was raised from 50,000 to 250,000 Turkish liras, and for limited liability companies (Limited Şirket, Ltd. Şti.) from 10,000 to 50,000 liras. Companies registered before 2024 must comply by December 31, 2026. This may impact small businesses but facilitates access to global capital markets for larger firms.
2. Corporate Governance:
New rules mandate that the chairman and vice-chairman of the board of directors are elected for up to three years, ensuring management stability. Non-transferable duties of directors, such as strategic planning and financial oversight, have been clarified, enhancing accountability to shareholders.
3. Simplification for SMEs:Small and medium enterprises (SMEs) with assets below 75 million liras, net sales below 150 million liras, or fewer than 150 employees are exempt from mandatory independent audits, reducing operational costs.
4. Digitalization:The amendments promote integration with digital platforms like MERSIS (Central Registry System), streamlining company registration and reporting processes in line with global digitalization trends.
Practical Implications for Businesses:
For Russian companies establishing branches or new entities in Turkey, the increased capital requirements necessitate additional initial investments. However, audit exemptions for SMEs and digitalized processes ease operations, particularly for startups in technology and trade sectors. Businesses should review their founding documents to ensure compliance.
Recommendations:
- Verify your company’s capital structure and plan for increases by 2026.
- Engage local legal firms to update corporate documents and register with MERSIS.
- For SMEs: Assess eligibility for audit exemptions to reduce costs.