Due Diligence in Türkiye: A Practical Checklist for Foreign Investors (2026)
If you are considering an acquisition, minority investment, joint venture, or strategic partnership in Türkiye, a well-structured due diligence process is the difference between a confident deal and an expensive surprise.
Türkiye is a dynamic market with strong industrial depth, regional access, and a sophisticated legal framework. At the same time, deal outcomes often hinge on details like hidden liabilities, regulatory permits, tax exposures, or contract risks.
This guide provides a practical, investor-focused due diligence checklist for 2026, organized by workstream, with notes on what matters most in Türkiye.
1) Start with the deal structure (share deal vs asset deal)
Before requesting documents, align the scope with the transaction type:
- Share deal (equity purchase): You acquire the company and typically assume historical liabilities unless limited by contract. Corporate, tax, employment, and regulatory diligence becomes critical.
- Asset deal: You acquire selected assets and contracts. This may reduce legacy risk, but you must confirm transferability, permit continuity, employee transfers, and VAT/stamp duty implications.
Practical note: In Türkiye, the cleanest structure depends on the sector, licensing regime, and whether the target has legacy tax or employment exposures. Structure decisions should be made early because they affect timelines and negotiation leverage.
2) Corporate and ownership due diligence (the foundation)
Confirm who owns what, and whether the company can legally be sold.
Corporate records and governance
- Trade registry records (MERSİS / trade registry gazette announcements)
- Articles of association and amendments
- Share ledger / capital structure history
- Board and general assembly resolutions (especially for share transfers, debt, pledges)
- Signature circulars (authorized signatories and limits)
Ownership and encumbrances
- Share pledges, liens, usufruct rights, options, convertible instruments
- Any shareholder disputes, pre-emption rights, tag/drag clauses, or veto rights
- Related-party transactions and shareholder loans (terms, maturity, security)
Red flags to watch
- Informal side agreements not reflected in corporate minutes
- Share transfers executed but not properly registered
- Material decisions made without required corporate approvals
3) Contracts and commercial due diligence (where value is created or lost)
Review contracts that drive revenue, costs, and operational continuity.
Revenue and customer risk
- Top customer contracts (termination rights, price adjustment, change-of-control clauses)
- Concentration analysis: reliance on a small number of customers
- Key accounts receivable aging and dispute history
Supplier and operational risk
- Key supplier agreements (exclusivity, minimum purchase commitments)
- Distribution/agency arrangements and territory restrictions
- Logistics and warehousing agreements
Finance-related contracts
- Bank facilities, covenants, guarantees, and security packages
- Leasing contracts and factoring arrangements
Change-of-control and assignment
- In Türkiye, many contracts restrict transfer or allow termination upon a share sale. Identify these early to avoid closing delays.
4) Regulatory and licensing (sector-specific, high-impact)
This workstream is often the critical path.
- Operating licenses and permits (scope, renewal dates, compliance status)
- Sector regulators (industry-specific approvals)
- Import/export registrations and customs compliance
- Product compliance documentation (where applicable)
- Notifications/approvals for foreign investors in regulated sectors
Competition law (merger control)
- Assess whether the transaction triggers Turkish Competition Authority filing thresholds.
- Build filing timelines into the SPA and closing plan.
Practical note: Even when global filings exist, Türkiye may require a separate filing depending on turnover thresholds and transaction type.
5) Tax due diligence (identify historical exposures and optimize the deal)
Tax diligence in Türkiye should cover both historic compliance and deal tax planning.
Core tax areas
- Corporate income tax filings and assessments
- VAT position (refunds, carryforwards, risk of disallowed input VAT)
- Withholding taxes (dividends, interest, royalties, service fees)
- Stamp tax exposure (contracts, financing documents)
- Transfer pricing policies and related-party transactions
Audit and dispute history
- Past tax inspections, settlements, ongoing disputes
- Potential assessments for underreported tax bases
Practical tax questions investors ask
- Are there tax incentives being used (and are they compliant)?
- Are there tax losses carried forward (and are they usable)?
- Are intercompany fees properly documented to avoid withholding challenges?
6) Employment and HR due diligence (liabilities can be significant)
Employment liabilities can materially impact valuation.
- Headcount, org chart, key employee dependency
- Employment contracts and executive arrangements
- Compensation structure (salary, bonuses, commissions, benefits)
- Overtime practices and working time compliance
- Termination exposure and severance reserves
- Unionization status and collective bargaining agreements
- Work permits for foreign staff (status and renewals)
Red flags
- High use of contractors who function like employees
- Unrecorded overtime or misclassified roles
- Material disputes at labor courts
7) Litigation, disputes, and compliance
A strong legal diligence process should map all current and potential disputes.
- Litigation docket: civil, commercial, labor, administrative
- Arbitration clauses in major contracts
- Government investigations, penalties, or compliance warnings
- Anti-corruption policies, gifts/hospitality practices, third-party risk
8) Data protection and IT (often under-done, increasingly costly)
Türkiye has a comprehensive personal data protection regime.
- Data mapping: what personal data is processed and where
- Consent and disclosure documentation
- Data retention and deletion policies
- Cross-border transfer mechanisms
- Cybersecurity controls and incident history
- Software licenses, SaaS subscriptions, and intellectual property ownership
Practical note: If the business serves EU customers, you may also need to align with GDPR expectations depending on operations and data flows.
9) Intellectual property (brand, software, and know-how)
- Trademark registrations (Turkey and international)
- Patents/design rights (if applicable)
- Domain names and control of social media accounts
- Software code ownership (employee/contractor assignments)
- Open-source software usage and compliance
10) Real estate and environmental (location and permits matter)
- Title deeds, zoning status, and encumbrances
- Lease terms, renewal rights, and termination conditions
- Building permits and occupancy licenses
- Environmental permits, waste management, and any contamination risk
11) Financial and operational due diligence (quality of earnings)
Beyond the financial statements, investors want to know whether earnings are sustainable.
- Quality of earnings and normalization adjustments
- Working capital trends and seasonality
- Cash conversion cycle and debt-like items
- CAPEX needs and maintenance costs
- Related-party transactions and one-off revenues
- FX exposure, pricing currency, and hedging practices
12) Deliverables: what you should get at the end
A well-run diligence process should produce clear outputs you can negotiate against:
- A consolidated risk register (severity, probability, remediation plan)
- SPA and SHA inputs: reps/warranties, indemnities, specific disclosures
- Closing conditions (licenses, consents, merger control, debt releases)
- Post-closing action plan (compliance fixes, contract renewals, HR alignment)
Common mistakes foreign investors make in Türkiye
- Starting diligence too late (and discovering licensing or consent issues after signing)
- Relying only on financial statements instead of legal, tax, and regulatory reality
- Ignoring change-of-control clauses in key customer or supplier contracts
- Underestimating employment liabilities and litigation timelines
- Not aligning the deal structure with risks (share vs asset purchase)
How FDI Consultancy supports your investment process
At FDI Consultancy, we help foreign investors navigate the full investment lifecycle in Türkiye:
- Pre-deal structuring and investment planning
- Legal, tax, and operational due diligence coordination
- SPA/SHA negotiation support (risk allocation and closing mechanics)
- Establishment of holding structures and post-closing compliance
If you are planning an acquisition, investment, or JV in Türkiye, contact our team to discuss your timeline and priorities.