Company Liquidation in Turkey for Foreign Shareholders

How We Help Foreign Shareholders

Closing a company in Turkey is a formal, multi-stage procedure with a fixed order of steps. Missing one — or doing them in the wrong order — is the usual reason a closure that should take a year takes two. Our corporate team runs the whole file for shareholders who are abroad:

• A health check of the company before anything is filed: open tax periods, unfiled returns, social security, unpaid invoices, bank accounts, leases and staff
• Drafting and passing the dissolution resolution, including the apostille and translation route for shareholders outside Turkey
• Acting as, or appointing, the liquidator (tasfiye memuru) and registering the liquidation with the trade registry
• The three creditor notices in the Turkish Trade Registry Gazette and letters to known creditors
• Liquidation-period tax returns, the closing balance sheet and the final liquidation return
• Closing the tax, social security and municipal files, and the company bank account
• Deletion from the trade registry and safekeeping of the books

When Liquidation Is the Right Route

Liquidation is the correct exit when the company is solvent — it can pay its debts — and the shareholders simply no longer want it. It is not the only way out, and it is not always the cheapest:

• Share sale. If the company has a licence, a track record or a clean balance sheet, selling the shares can be faster than liquidation and preserves the entity. We advise on the shareholder side of the transfer.
• Merger. A group with two Turkish entities can fold one into the other; the transferring company is deleted without a liquidation.
• Bankruptcy. If the company cannot pay its debts, liquidation is not available; the route is insolvency under the Enforcement and Bankruptcy Law. See our bankruptcy and foreclosure page.
• Doing nothing. This is the option most shareholders abroad drift into, and it is the most expensive. A company that has stopped trading keeps every filing obligation it had while trading. We explain the exposure in our guide to dormant companies.

The Liquidation Procedure Step by Step

Dissolution resolution

The shareholders resolve to dissolve the company. For a limited liability company (Ltd. Şti.) the Commercial Code requires two-thirds of the votes represented at the meeting together with an absolute majority of the share capital; for a joint stock company (A.Ş.) the ordinary meeting quorum applies unless the articles set a higher one. Shareholders abroad sign before a notary with an apostille, or grant a power of attorney to a Turkish lawyer to attend for them.

Registration and the liquidator

The dissolution and the liquidator are registered with the trade registry and announced in the Turkish Trade Registry Gazette. From that day the company's name carries the suffix tasfiye hâlinde (in liquidation), the directors' powers pass to the liquidator, and the company may act only for the purposes of winding up. At least one liquidator must be a Turkish citizen resident in Turkey; where all shareholders and directors are abroad, we take this role.

Creditor notices and the waiting period

The liquidator publishes three notices in the Gazette, one week apart, inviting creditors to file their claims, and writes to creditors known from the books. The remaining assets cannot be distributed to the shareholders until six months have passed from the third notice, unless a court permits an earlier distribution because no creditor is at risk. A liquidator who distributes earlier answers personally to unpaid creditors.

Closing balance sheet, distribution and deregistration

The liquidator collects receivables, converts assets to cash, pays debts and prepares a closing balance sheet, which the shareholders approve. What remains is distributed in proportion to the shares. The liquidator then applies for deletion of the company from the trade registry. With the deletion the company's legal personality ends; the books and records must be kept for ten years.

Tax and Social Security Closure

The registry and the tax office are two separate procedures, and the second is the one that stalls. From the day the dissolution is registered the company enters a liquidation period for corporate tax purposes: each calendar year in liquidation is a separate tax period, and the liquidation return for each period is due within the ordinary deadline. The final return — covering the last period and closing the file — must be filed within thirty days of the registration of the deletion.

Monthly VAT and withholding returns continue throughout. The tax office will examine the liquidation before it closes the file, and any assessment it raises must be settled before the remaining assets are distributed — liquidators are jointly liable for taxes paid out to shareholders in disregard of this. Social security (SGK) requires the workplace file to be closed once the last employee has left, and the municipality's environmental tax and signage records are closed with a separate application.

We prepare the closing figures with the company's accountant, handle the tax office correspondence in Turkish, and do not file for deregistration until the tax position is clean — because a deletion applied for too early is the most common cause of a reopened file.

Foreign Shareholders: Documents from Abroad

Where the shareholder is a foreign company, the decision to dissolve the Turkish subsidiary is taken by its own competent organ — board or shareholders under the law of its home country — and the resolution reaches Turkey as a notarised, apostilled document with a sworn Turkish translation. Where the shareholder is an individual abroad, the same applies to the resolution or, more practically, to a power of attorney allowing us to attend the meeting and sign on their behalf.

• Resolution or power of attorney: notarised and apostilled (Hague 1961) in the home country, translated by a sworn translator in Turkey and certified by a Turkish notary
• For corporate shareholders: a current extract or certificate of good standing showing who may sign
• Passport copies of the signatories; a Turkish tax number for the liquidator
• Original company documents held abroad — share ledger, signature circular, bank tokens — returned to Turkey or formally replaced

We draft the resolution and power of attorney in a bilingual form that Turkish registries accept, so that a single signing session at a notary abroad is enough.

Closing a Branch or Liaison Office

A branch of a foreign company is deleted from the trade registry on the basis of a resolution of the parent, after its own tax closure; it has no separate liquidation because it has no separate legal personality, but its Turkish tax and social security files must still be closed in full. A liaison office is closed by notifying the Ministry of Industry and Technology within one month of ceasing activity, with the tax office's cessation record; after that date the office may transfer nothing abroad except its closing balance. Both are covered in our guide to closing a branch or liaison office.

What Survives Deregistration

Deregistration ends the company, not every liability connected with it. Public receivables that could not be collected from the company — taxes, tax penalties, social security premiums — can be pursued against the legal representatives of the period concerned and, for a limited liability company, against the shareholders in proportion to their shares. If assets or debts surface after deletion, a creditor or shareholder can ask the court to re-register the company for an additional liquidation. A closure done properly is the only reliable protection against both. We set this out in detail in our guide to liability after closure.

Our Process (Step by Step)

1. 1

   Consultation and Company Health Check

   We review the company's filings, debts, contracts, staff and bank position, and tell you whether liquidation, sale or another route is right — and what it will cost.

2. 2

   Resolution and Registration

   We draft the dissolution resolution and any powers of attorney, handle notarisation and apostille abroad, and register the dissolution and the liquidator.

3. 3

   Creditor Notices and Settlement

   We publish the three Gazette notices, write to known creditors, collect receivables, settle debts and close contracts and accounts.

4. 4

   Tax and Social Security Closure

   We file the liquidation-period returns, manage the tax office's examination, and close the social security and municipal files.

5. 5

   Closing Balance Sheet and Deregistration

   After the waiting period we distribute the remaining assets, file the final return, delete the company from the registry and arrange safekeeping of the books.

Why Choose Bayraktar Attorneys

Frequently Asked Questions