Exit of a Foreign Investor from a Turkish Company: Share Transfer and Valuation Process

A significant portion of foreign investors who become shareholders in a company established in Turkey find themselves needing to exit the partnership by transferring their shares within just a few years. As of 2026, this process turns on two central questions: to whom the shares will be transferred and at what valuation. Missteps at this stage can lead not only to lost time but also to significant financial losses.

In this article, we walk through the share transfer process under the Turkish Commercial Code (TCC), the valuation methods used, and the key points foreign investors should keep in mind at every step.

What Is a Share Transfer and How Is It Carried Out?

In a Turkish limited liability company (limited şirket), a share transfer is carried out through a notarized transfer agreement under Article 595 of the TCC, and unless the articles of association provide otherwise, it requires approval by the general assembly of shareholders. The rules differ for joint stock companies (anonim şirket): registered shares are transferred by endorsement and delivery, while bearer shares are transferred by delivery alone.

For example, when a Germany-based investor wants to transfer their 30% stake in an Istanbul limited liability company to their Turkish partner, they must first check the articles of association for any restrictions and then obtain the other shareholders’ approval. Skipping this step means the transfer cannot be registered with the trade registry.

How Is the Company’s True Value Determined?

The most frequent source of disagreement in a share transfer is the company’s true value. Three methods are commonly used in practice: the net asset value method (deducting liabilities from the assets on the company’s balance sheet), the discounted cash flow method (converting projected future cash flows into present value), and the comparable company method (benchmarking against valuation multiples of similar companies in the same sector).

Suppose a Dubai-based investor wants to exit their 50% stake in an e-commerce company set up in Istanbul. Even if the company’s book value looks modest, if its brand value and growth potential are high, relying solely on net asset value could leave the investor at a loss. In such cases, bringing in an independent valuation expert gives both sides a fair reference point.

Share Transfer Agreement, Notarization, and Trade Registry Procedures

Once the parties agree on the valuation, the process moves on to the formal procedural steps. It generally proceeds in the following order:

In the case of a Syrian investor exiting a food company set up in Beyoğlu, the registration application was delayed by two months because the general assembly resolution was not obtained in time, leaving the company’s operations in limbo during that period. Delays of this kind are especially common in transactions conducted from abroad through a power of attorney.

For more on the official procedures followed when setting up a company, see our guide to company formation in Istanbul; share transfers rely on a similar trade registry mechanism.

Tax Obligations and Special Considerations for Foreign Investors

Gains from a share transfer may be treated as capital gains (değer artış kazancı) under Turkish tax law and, in certain circumstances, subject to income or corporate tax (under the legislation in force as of August 2026). Whether a double taxation treaty exists between Turkey and the investor’s country of residence directly affects the resulting tax burden.

For example, if a UK-resident shareholder transfers their stake in a Turkish company without first reviewing the treaty provisions between the two countries, the resulting calculation could produce a higher tax liability than expected. It is therefore important to work with both a financial advisor and a lawyer before completing the transfer.

Common Pitfalls and How to Avoid Them

The most common problems in the share transfer process include pressure to undervalue the company, the lack of a written agreement between shareholders, and leaving the post-transfer payment schedule undefined. In one case involving a Russian investor, the transfer price was to be paid in installments, but because the agreement contained no provisions for late-payment interest or security, collecting the second installment dragged on for months.

The way to reduce these risks is to prepare a written preliminary protocol before the transfer, have the valuation report confirmed by an independent expert, and secure the payment schedule with collateral provisions.

Is notarization always required for a share transfer?

Yes, for limited liability companies; under Article 595 of the TCC, the share transfer agreement must be in writing and notarized. Different rules apply to joint stock companies depending on the type of share certificate.

Can a share transfer be completed without a valuation report?

It is not a legal requirement, but it is strongly recommended to prevent future disputes between the parties. Where trust between shareholders is limited in particular, a valuation report serves as a decisive point of reference.

Can a foreign investor transfer their shares from abroad?

Yes, the process can be carried out from outside Turkey through a properly executed power of attorney, provided it meets the applicable apostille and translation requirements.

In short, for foreign investors looking to exit a Turkish company through a share transfer, the process comes down to three pillars: accurate valuation, a complete agreement, and timely registration. Careful planning at every step significantly reduces both lost time and the risk of future disputes.