Recovering Company Receivables in Turkey: Enforcement and Litigation Process for Foreign Investors

As of 2026, for the thousands of foreign-capital companies operating in Turkey, a late-paying customer or supplier is not merely a cash-flow problem, it is the start of a legal process that, if not handled correctly, can result in the loss of your rights. Under Law No. 2004 (the Enforcement and Bankruptcy Law), the deadline to object to a payment order served on the debtor is only 7 days, and this short window makes it essential to structure the process correctly from the very start.

Take Marie, a French investor who set up a textile export company in Istanbul: her Turkish distributor has not paid for a delivered shipment in 3 months. Marie has a few options ahead of her: reaching an amicable settlement, initiating enforcement proceedings, or filing a lawsuit directly. In this article, we explain, step by step, how foreign investors can recover their company’s receivables in Turkey through legal channels.

Why Is Debt Recovery Different for Foreign Investors?

The debt recovery process for a company established in Turkey is legally subject to the same rules as companies owned by Turkish citizens. However, several practical obstacles make things harder for foreign investors: the language barrier, correctly tracking service-of-process addresses, properly preparing powers of attorney and corporate documents, and, at times, the fact that the debtor or the creditor is located abroad.

For foreign investors who have already completed company formation in Turkey and are up and running, supporting commercial relationships with contracts and written documentation makes a major difference at this stage. As in Marie’s case, a creditor holding invoices, delivery notes, and correspondence records is in a far stronger position throughout the enforcement and litigation process.

First Step: Formal Notice (İhtarname) and Attempted Settlement

Before turning to legal proceedings, the first step is often to send a formal notice, known in Turkish as an ihtarname. This is a written notification that formally reminds the debtor of the outstanding debt and requests payment within a specified period, sending it through a notary strengthens its evidentiary value.

Marie’s lawyer sent the distributor a notarized ihtarname requesting payment within 10 days. This step keeps the door open for a settlement while also creating a document showing, for any future lawsuit, that the creditor granted the debtor a reasonable period to pay.

In some cases, the debtor may propose a payment plan after receiving the notice. At this stage, signing a written protocol prevents later disputes over whether an oral agreement was reached. If no settlement is reached, the next step is enforcement proceedings.

Initiating Enforcement Proceedings: Steps and Process

If no settlement is reached, the creditor can initiate enforcement proceedings without a prior court judgment through the enforcement office. The process begins with an application to the enforcement office located where the debtor resides or where the company’s headquarters is based, after which a payment order is served on the debtor.

In Marie’s case, when payment still did not arrive despite the ihtarname, her lawyer initiated proceedings at the enforcement office covering the distributor’s headquarters and attached the invoices and shipping documents to the file. The more concrete, dated documentation you have at this stage, the stronger the process moving forward.

If the Debtor Objects: Action for Annulment of Objection

If the debtor objects to the enforcement proceedings within the 7-day period, the proceedings are automatically suspended. At this point, the creditor has two options: applying for removal of the objection before the enforcement court (a faster, document-based route), or filing an action for annulment of objection before the Commercial Court of First Instance, a more comprehensive lawsuit.

Marie’s distributor objected, claiming the goods had been delivered defective. In this situation, her lawyer must file the action for annulment of objection within 1 year of being served the objection, otherwise the right to sue is forfeited. During the proceedings, delivery documents, quality control reports, and correspondence were submitted as evidence.

This stage is the most time-consuming part of the process and, depending on the court’s caseload, can take months or even years. For this reason, many foreign investors choose to reduce this risk from the outset by including an arbitration clause or clear payment terms at the contract stage.

Collecting From Debtors Located Abroad: Additional Challenges

In some cases, the roles are reversed and the party owing money to a company in Turkey is based abroad. For example, Ahmet, an investor who manufactures furniture in Istanbul, has a customer in Germany that has not paid for delivered goods.

In this situation, enforcing a Turkish court judgment in Germany requires bilateral agreements between the two countries or international recognition and enforcement (tenfiz) procedures. This process can be far longer and more costly than proceedings confined to a single country, which is why it is essential that contracts with foreign parties clearly specify the competent court and governing law from the outset.

In practice, if the debtor holds any assets in Turkey (a bank account, real estate, company shares), initiating enforcement proceedings directly in Turkey is usually the faster and more practical route. For this reason, it is worth assessing whether the debtor has any connection to Turkey at the time the contract is signed.

Statute of Limitations and Deadline Tracking: What to Watch For

One of the most commonly overlooked issues in debt recovery is the statute of limitations. Under the Turkish Code of Obligations, the general limitation period is 10 years, but for commercial receivables this is reduced to 5 years in most cases, the exact period can vary depending on the type and basis of the claim.

For example, an investor who forgets about an invoice issued two years ago may lose the right to claim the debt if the deadline passes, even if legally in the right. For this reason, it is advisable to track the due date of every invoice and contract and, where necessary, send an ihtarname that interrupts the limitation period.

While Marie’s case was ongoing, her lawyer tracked every deadline in the file (the objection period, the filing deadline, and service periods) on a calendar, and no statutory deadline was missed. This kind of disciplined tracking is especially important for foreign investors managing multiple files.

How do I know if my receivable is time-barred?

This requires a calculation that varies depending on the type of receivable (invoice, contract, promissory note, etc.) and its due date, so the safest approach is to have your specific case assessed by a lawyer.

Is enforcement proceedings costly?

The fees and costs of enforcement proceedings are set by law and are generally recovered from the debtor at the end of the process, but it is advisable to get up-to-date guidance from a lawyer before starting.

Each step of the process can vary depending on the type of receivable, the debtor’s location, and the documentation you hold. You can find the current legislation on the Enforcement and Bankruptcy Law via mevzuat.gov.tr, and general process information on the official website of the Ministry of Justice.