ANALYSIS
What Risks Does a Foreign Investor Assume When Becoming a Shareholder in a Company in Türkiye?
What Risks Does a Foreign Investor Assume When Becoming a Shareholder in a Company in Türkiye?
Every investment opportunity also brings certain legal and commercial risks. For foreign investors planning to become shareholders in an existing company in Türkiye, identifying and assessing these risks in advance is a fundamental element of structuring the investment in a secure and sustainable manner.
19 June 2026
Reading Time: 3 min
Content
- Executive Summary
- Why Is This Topic Important?
- Legal Framework
- The Five Key Risks Assumed by Foreign Investors
- The Most Common Scenarios Encountered in Practice
- The Most Common Mistakes
- Frequently Asked Questions
- The Aetra Legal Perspective
- Conclusion
1. Executive Summary
Becoming a shareholder in an existing company in Türkiye can offer significant advantages over establishing a new business from scratch, including faster market entry, an established customer base, operational continuity, and an experienced management team. However, alongside these advantages, an investor acquires not only the company’s future potential but also its history. Historical tax liabilities, employment disputes, weak corporate governance, management control issues, hidden contractual obligations, or conflicts among shareholders may all result in unexpected costs after the investment has been completed.
For this reason, a successful investment decision depends not only on the company’s valuation, but also on thorough legal due diligence, the selection of the appropriate transaction structure, carefully drafted agreements, and effective risk management.
This guide explains the principal risks that foreign investors may encounter when becoming shareholders in an existing company in Türkiye, how these risks typically arise, and how they are managed in international practice.
Becoming a shareholder in an existing company in Türkiye can offer significant advantages over establishing a new business from scratch, including faster market entry, an established customer base, operational continuity, and an experienced management team. However, alongside these advantages, an investor acquires not only the company’s future potential but also its history. Historical tax liabilities, employment disputes, weak corporate governance, management control issues, hidden contractual obligations, or conflicts among shareholders may all result in unexpected costs after the investment has been completed.
For this reason, a successful investment decision depends not only on the company’s valuation, but also on thorough legal due diligence, the selection of the appropriate transaction structure, carefully drafted agreements, and effective risk management.
This guide explains the principal risks that foreign investors may encounter when becoming shareholders in an existing company in Türkiye, how these risks typically arise, and how they are managed in international practice.
2. Why Is This Topic Important?
A company acquisition or an investment in an existing business is often perceived as a purely financial decision. In international investment transactions, however, what is acquired extends far beyond the company’s shares. Its legal history, commercial relationships, organizational structure, and potential future liabilities all become part of the investment.
For example, a company with strong financial statements may still be subject to an ongoing tax audit. A key customer agreement may automatically terminate upon a change of shareholders. The intellectual property rights to the software used by the company may not actually belong to the company itself. Even after acquiring a majority shareholding, the investor may fail to obtain management control because of privileged rights granted under the articles of association.
Many of these risks only become apparent after the transaction has been completed. At that stage, the investor’s options are often significantly limited. For this reason, experienced investors seek the answer to the following question before focusing on how profitable a company appears:
“What legal and commercial risks could this company transfer to me in the future?”
A well-structured investment process aims to answer this question before the transaction is completed. This enables investors to evaluate not only the opportunities, but also the responsibilities they will assume, allowing them to make informed decisions.
For example, a company with strong financial statements may still be subject to an ongoing tax audit. A key customer agreement may automatically terminate upon a change of shareholders. The intellectual property rights to the software used by the company may not actually belong to the company itself. Even after acquiring a majority shareholding, the investor may fail to obtain management control because of privileged rights granted under the articles of association.
Many of these risks only become apparent after the transaction has been completed. At that stage, the investor’s options are often significantly limited. For this reason, experienced investors seek the answer to the following question before focusing on how profitable a company appears:
“What legal and commercial risks could this company transfer to me in the future?”
A well-structured investment process aims to answer this question before the transaction is completed. This enables investors to evaluate not only the opportunities, but also the responsibilities they will assume, allowing them to make informed decisions.
3. Legal Framework
Türkiye is among the countries that maintain an open investment policy for foreign investors. As a general principle, foreign investors enjoy the same rights and protections as domestic investors. This approach enhances the predictability of the investment environment while encouraging international capital inflows.
However, not every investment is subject to the same legal framework. The applicable regulations may vary depending on the company’s sector of activity, ownership structure, transaction model, and the nature of the investment itself.
During an investment transaction, the following questions are typically considered together:
However, not every investment is subject to the same legal framework. The applicable regulations may vary depending on the company’s sector of activity, ownership structure, transaction model, and the nature of the investment itself.
During an investment transaction, the following questions are typically considered together:
- Will the investment be completed through a share transfer or by way of a capital increase?
- Does the company’s business activity require a specific license or regulatory authorization?
- Is approval from a regulatory authority required for the transaction?
- Do the company’s articles of association contain provisions that may affect the investment?
- Will the change of shareholders have an impact on the company’s existing contracts?
4. The Five Key Risks Assumed by Foreign Investors
Although every investment transaction has its own characteristics, most of the risks encountered in practice can be grouped into five main categories. Managing an investment successfully requires each of these risks to be assessed individually.
While every transaction is unique, the majority of investment-related disputes and losses arise from the same recurring risk areas. For this reason, international investors systematically examine certain aspects of a target company regardless of its size or industry. The objective is to evaluate an investment not only in terms of its opportunities, but also in light of the obligations and liabilities that may accompany it.
1. Historical Liabilities and Legacy Obligations
Acquiring shares in a company does not create a new legal entity free from its past. The company continues to exist with the same legal personality; only its ownership changes. As a result, investors may also inherit legal and commercial risks arising from the company’s previous activities.
These risks are not always visible in financial statements. An ongoing tax audit, potential employment claims that have not yet been filed, contractual liabilities, or the risk of administrative sanctions may emerge months or even years after the investment has been completed.
For example, a manufacturing company may face administrative penalties for environmental compliance violations. A software company may become involved in an intellectual property dispute concerning the source code it uses. A service company may be exposed to substantial social security premium assessments and penalties arising from historical employment practices.
For investors, the key question is therefore not simply how profitable the company is today, but what historical liabilities may materialize in the future.
Although it is rarely possible to eliminate all such risks, comprehensive legal and financial due diligence can identify them before closing. Representations and warranties, indemnification provisions, escrow arrangements, or purchase price adjustment mechanisms incorporated into the share purchase agreement can significantly reduce the investor’s exposure.
2. Management and Control Risk
One of the most common misconceptions among investors is that acquiring a majority shareholding automatically guarantees full control of the company. In practice, corporate control is determined by far more than ownership percentages.
Preferred share rights, board composition, voting rights, veto powers, representation authority, and shareholder agreements may all substantially affect an investor’s actual ability to control the business.
For example, an investor may acquire 60% of the company’s shares, yet still be unable to appoint a majority of the board if such authority belongs to a privileged class of shares. Similarly, if important corporate decisions require a qualified majority, the investor may be unable to exercise the level of control initially expected.
Likewise, the company’s bank accounts, digital infrastructure, proprietary know-how, or customer relationships may remain under the practical control of existing managers. Becoming a shareholder does not necessarily mean obtaining operational control.
Accordingly, investors should evaluate not only the ownership structure but also the company’s actual governance and decision-making mechanisms before completing the transaction.
3. Financial and Tax Risks
Company valuations typically focus on revenue, profitability, and growth potential. However, the true economic cost of an investment depends on far more than financial performance.
Debt structure, cash flow, related-party transactions, tax practices, foreign exchange exposure, and financing arrangements may all create significant financial burdens after closing.
For instance, a company with substantial revenue may experience persistent collection problems. Another company may rely heavily on short-term borrowing to finance its operations. Even businesses that appear financially healthy may suffer from serious liquidity problems due to insufficient working capital.
From a tax perspective, subsequent tax audits, transfer pricing adjustments, VAT assessments, or related-party transactions may generate substantial additional liabilities for the investor.
For this reason, investors should analyze financial statements not only as accounting documents but also as indicators of potential legal and commercial risks.
4. Compliance and Regulatory Risk
In today’s investment environment, profitability alone is no longer sufficient. Companies are expected to conduct their operations in a lawful, transparent, and sustainable manner.
For international investors, compliance with data protection regulations, anti-money laundering requirements, international sanctions regimes, sector-specific licensing rules, internal control systems, and corporate ethics standards forms an essential part of the investment assessment.
For example, investing in a healthcare company operating without the required licenses, a technology company processing personal data unlawfully, or a trading company doing business with sanctioned parties may expose the investor to significant legal, regulatory, financial, and reputational risks after the acquisition.
Today, a company’s value is measured not only by its balance sheet but also by the strength of its corporate governance and compliance culture.
5. Exit Risk
An exit strategy should be planned with the same level of attention as the initial investment. Nevertheless, many investors begin considering how to exit only after the transaction has already been completed.
Failure to establish clear exit mechanisms between shareholders may result in disputes that continue for many years.
Restrictions on share transfers, the inability to find a buyer, disagreements regarding valuation, or the refusal of other shareholders to approve a sale may prevent investors from recovering their capital within a reasonable period.
For this reason, international shareholder agreements commonly include tag-along rights, drag-along rights, call and put options, and other contractual exit mechanisms designed to provide greater certainty for all parties.
The success of an investment is measured not only by building a profitable partnership, but also by the ability to exit that investment under predictable, legally secure, and commercially reasonable conditions whenever necessary.
These five categories summarize the principal legal and commercial risks that foreign investors may encounter when acquiring an interest in an existing company in Türkiye. However, every transaction is unique. The company’s business sector, ownership structure, regulatory environment, and the investor’s objectives may significantly influence both the nature and the significance of these risks. Consequently, successful investment transactions rely not on standardized document reviews alone, but on a multidisciplinary assessment tailored to the specific characteristics of each investment.
While every transaction is unique, the majority of investment-related disputes and losses arise from the same recurring risk areas. For this reason, international investors systematically examine certain aspects of a target company regardless of its size or industry. The objective is to evaluate an investment not only in terms of its opportunities, but also in light of the obligations and liabilities that may accompany it.
1. Historical Liabilities and Legacy Obligations
Acquiring shares in a company does not create a new legal entity free from its past. The company continues to exist with the same legal personality; only its ownership changes. As a result, investors may also inherit legal and commercial risks arising from the company’s previous activities.
These risks are not always visible in financial statements. An ongoing tax audit, potential employment claims that have not yet been filed, contractual liabilities, or the risk of administrative sanctions may emerge months or even years after the investment has been completed.
For example, a manufacturing company may face administrative penalties for environmental compliance violations. A software company may become involved in an intellectual property dispute concerning the source code it uses. A service company may be exposed to substantial social security premium assessments and penalties arising from historical employment practices.
For investors, the key question is therefore not simply how profitable the company is today, but what historical liabilities may materialize in the future.
Although it is rarely possible to eliminate all such risks, comprehensive legal and financial due diligence can identify them before closing. Representations and warranties, indemnification provisions, escrow arrangements, or purchase price adjustment mechanisms incorporated into the share purchase agreement can significantly reduce the investor’s exposure.
2. Management and Control Risk
One of the most common misconceptions among investors is that acquiring a majority shareholding automatically guarantees full control of the company. In practice, corporate control is determined by far more than ownership percentages.
Preferred share rights, board composition, voting rights, veto powers, representation authority, and shareholder agreements may all substantially affect an investor’s actual ability to control the business.
For example, an investor may acquire 60% of the company’s shares, yet still be unable to appoint a majority of the board if such authority belongs to a privileged class of shares. Similarly, if important corporate decisions require a qualified majority, the investor may be unable to exercise the level of control initially expected.
Likewise, the company’s bank accounts, digital infrastructure, proprietary know-how, or customer relationships may remain under the practical control of existing managers. Becoming a shareholder does not necessarily mean obtaining operational control.
Accordingly, investors should evaluate not only the ownership structure but also the company’s actual governance and decision-making mechanisms before completing the transaction.
3. Financial and Tax Risks
Company valuations typically focus on revenue, profitability, and growth potential. However, the true economic cost of an investment depends on far more than financial performance.
Debt structure, cash flow, related-party transactions, tax practices, foreign exchange exposure, and financing arrangements may all create significant financial burdens after closing.
For instance, a company with substantial revenue may experience persistent collection problems. Another company may rely heavily on short-term borrowing to finance its operations. Even businesses that appear financially healthy may suffer from serious liquidity problems due to insufficient working capital.
From a tax perspective, subsequent tax audits, transfer pricing adjustments, VAT assessments, or related-party transactions may generate substantial additional liabilities for the investor.
For this reason, investors should analyze financial statements not only as accounting documents but also as indicators of potential legal and commercial risks.
4. Compliance and Regulatory Risk
In today’s investment environment, profitability alone is no longer sufficient. Companies are expected to conduct their operations in a lawful, transparent, and sustainable manner.
For international investors, compliance with data protection regulations, anti-money laundering requirements, international sanctions regimes, sector-specific licensing rules, internal control systems, and corporate ethics standards forms an essential part of the investment assessment.
For example, investing in a healthcare company operating without the required licenses, a technology company processing personal data unlawfully, or a trading company doing business with sanctioned parties may expose the investor to significant legal, regulatory, financial, and reputational risks after the acquisition.
Today, a company’s value is measured not only by its balance sheet but also by the strength of its corporate governance and compliance culture.
5. Exit Risk
An exit strategy should be planned with the same level of attention as the initial investment. Nevertheless, many investors begin considering how to exit only after the transaction has already been completed.
Failure to establish clear exit mechanisms between shareholders may result in disputes that continue for many years.
Restrictions on share transfers, the inability to find a buyer, disagreements regarding valuation, or the refusal of other shareholders to approve a sale may prevent investors from recovering their capital within a reasonable period.
For this reason, international shareholder agreements commonly include tag-along rights, drag-along rights, call and put options, and other contractual exit mechanisms designed to provide greater certainty for all parties.
The success of an investment is measured not only by building a profitable partnership, but also by the ability to exit that investment under predictable, legally secure, and commercially reasonable conditions whenever necessary.
These five categories summarize the principal legal and commercial risks that foreign investors may encounter when acquiring an interest in an existing company in Türkiye. However, every transaction is unique. The company’s business sector, ownership structure, regulatory environment, and the investor’s objectives may significantly influence both the nature and the significance of these risks. Consequently, successful investment transactions rely not on standardized document reviews alone, but on a multidisciplinary assessment tailored to the specific characteristics of each investment.
5. The Most Common Scenarios Encountered in Practice
Laws establish the legal framework for how an investment should be structured. In practice, however, investment decisions are shaped primarily by the challenges that arise during the transaction process. Many disputes occur not because the parties are unaware of the applicable legal rules, but because the relevant risks were not properly identified and assessed before the investment was completed.
The following scenarios are intended to illustrate the risks most commonly encountered in practice. Although every investment transaction is unique, similar legal and commercial issues recur across different industries.
Laws establish the legal framework for how an investment should be structured. In practice, however, investment decisions are shaped primarily by the challenges that arise during the transaction process. Many disputes occur not because the parties are unaware of the applicable legal rules, but because the relevant risks were not properly identified and assessed before the investment was completed.
The following scenarios are intended to illustrate the risks most commonly encountered in practice. Although every investment transaction is unique, similar legal and commercial issues recur across different industries.
- A Majority Stake Was Acquired, but Management Control Was Not ObtainedCase 01A foreign investor acquires 60% of the shares in a Turkish technology company, expecting to gain effective control over the business after the investment. The financial due diligence has been completed successfully, and the company’s growth potential meets the investor’s expectations.
Following the closing, however, several provisions in the company’s articles of association produce unexpected consequences.
The founding shareholder retains the right to appoint certain members of the board of directors. Significant corporate transactions require the signatures of two authorized representatives. Access to the company’s bank accounts remains under the control of the previous management. The software development team continues to report directly to the founder, who also maintains practical control over key commercial decisions.
Although the investor legally owns a majority of the shares, they are unable to exercise the operational control that was expected when the investment was made.
A significant number of disputes of this nature arise because the governance structure is assessed solely on the basis of share ownership before the transaction. Where the objective of the investment is to control and manage the company, the composition of the board of directors, representation authority, veto rights, and the shareholders’ agreement are just as important as the percentage of shares being acquired. - A Profitable Company Lost Value Due to Historical LiabilitiesCase 02A foreign investor acquires an interest in a manufacturing company after reviewing the financial statements for the previous three years, which indicate consistent growth and strong profitability.
Approximately eight months after the transaction is completed, a tax audit relating to prior accounting periods is finalized. As a result, the company is assessed additional taxes, late payment interest, and tax penalties. During the same period, several employment lawsuits filed by former employees are concluded in favor of the claimants, creating further financial liabilities for the company.
At the time of the acquisition, none of these liabilities had been finally determined. Nevertheless, because the company continues to operate as the same legal entity, the resulting financial obligations directly reduce the value of the investor’s investment.
Although risks of this nature cannot always be eliminated entirely, they can be substantially mitigated through comprehensive legal and financial due diligence, carefully drafted representations and warranties, specific indemnification provisions, and appropriately structured payment mechanisms included in the transaction documentation. - A Successful Partnership Was Established, but Exiting the Investment Became ImpossibleCase 03An international investment fund acquires a minority stake in a Turkish company with significant growth potential.
During the first few years, the company expands rapidly. Several years later, however, the investor decides to dispose of its shares as part of a revised investment strategy.
The shareholders’ agreement contains no clear provisions governing exit mechanisms. The existing shareholders refuse to approve the admission of a new investor. The parties are unable to agree on an appropriate valuation of the shares, while potential buyers withdraw from the transaction due to the uncertainty surrounding the company’s ownership structure.
As a result, the investor is unable to exit an economically successful company on commercially reasonable terms.
For this reason, international investment practice places considerable emphasis not only on the conditions for entering a partnership but also on the mechanisms governing its termination. Experienced investors devote as much attention to planning their exit strategy as they do to structuring the initial investment.
What These Scenarios Have in Common
At first glance, these three scenarios appear to involve entirely different issues. One concerns corporate control, another relates to historical liabilities, while the third highlights the challenges of exiting an investment.
In reality, however, they all stem from the same underlying cause: legal risk assessment before the investment was treated merely as a document review.
In a well-managed investment process, the objective is not simply to collect as many corporate documents as possible. The real objective is to identify and evaluate the legal and commercial risks that may arise after closing before the transaction is completed.
This approach not only makes investment decisions more secure but also enables the transaction documents to be structured around the actual risks of the investment. As a result, the rights, obligations, and risk allocation between the parties can be defined more clearly, reducing the likelihood of future disputes.
At first glance, these three scenarios appear to involve entirely different issues. One concerns corporate control, another relates to historical liabilities, while the third highlights the challenges of exiting an investment.
In reality, however, they all stem from the same underlying cause: legal risk assessment before the investment was treated merely as a document review.
In a well-managed investment process, the objective is not simply to collect as many corporate documents as possible. The real objective is to identify and evaluate the legal and commercial risks that may arise after closing before the transaction is completed.
This approach not only makes investment decisions more secure but also enables the transaction documents to be structured around the actual risks of the investment. As a result, the rights, obligations, and risk allocation between the parties can be defined more clearly, reducing the likelihood of future disputes.
6. Common Mistakes
A significant number of mistakes made by foreign investors stem not from a lack of legal knowledge, but from assigning priority to the wrong issues. While attention is often focused on a company’s revenue, growth potential, or market position, the legal factors that ultimately determine the long-term success of an investment may receive insufficient consideration.
The most common mistakes encountered in practice include:
Relying solely on financial statements. Financial statements reflect a company’s historical performance, but they do not reveal legal risks that may arise in the future. Financial due diligence should therefore always be complemented by legal and operational due diligence.
Treating due diligence as a document review exercise. An effective due diligence process goes beyond identifying missing or incomplete documents. Its purpose is to evaluate the legal and commercial risks associated with those documents and determine how those risks should be addressed in the transaction documentation.
Using a standard share purchase agreement. Every investment has its own risk profile. Standard agreements obtained from previous transactions or generic templates may fail to provide adequate protection against transaction-specific liabilities.
Underestimating the importance of a shareholders’ agreement. Many disputes arise not because the parties act in bad faith, but because they fail to regulate foreseeable situations before they occur.
Postponing exit planning until after the investment. The conditions for leaving an investment are just as important as the conditions for entering it. A well-defined exit strategy should form part of the transaction from the outset.
Viewing the investment solely as a legal transaction. Successful investments require a multidisciplinary approach in which legal, tax, financial, corporate governance, and commercial considerations are planned and coordinated together.
These mistakes often produce the same result: after the transaction has closed, the investor is forced to resolve problems that could have been anticipated and managed earlier, frequently at a significantly higher financial and commercial cost.
A significant number of mistakes made by foreign investors stem not from a lack of legal knowledge, but from assigning priority to the wrong issues. While attention is often focused on a company’s revenue, growth potential, or market position, the legal factors that ultimately determine the long-term success of an investment may receive insufficient consideration.
The most common mistakes encountered in practice include:
Relying solely on financial statements. Financial statements reflect a company’s historical performance, but they do not reveal legal risks that may arise in the future. Financial due diligence should therefore always be complemented by legal and operational due diligence.
Treating due diligence as a document review exercise. An effective due diligence process goes beyond identifying missing or incomplete documents. Its purpose is to evaluate the legal and commercial risks associated with those documents and determine how those risks should be addressed in the transaction documentation.
Using a standard share purchase agreement. Every investment has its own risk profile. Standard agreements obtained from previous transactions or generic templates may fail to provide adequate protection against transaction-specific liabilities.
Underestimating the importance of a shareholders’ agreement. Many disputes arise not because the parties act in bad faith, but because they fail to regulate foreseeable situations before they occur.
Postponing exit planning until after the investment. The conditions for leaving an investment are just as important as the conditions for entering it. A well-defined exit strategy should form part of the transaction from the outset.
Viewing the investment solely as a legal transaction. Successful investments require a multidisciplinary approach in which legal, tax, financial, corporate governance, and commercial considerations are planned and coordinated together.
These mistakes often produce the same result: after the transaction has closed, the investor is forced to resolve problems that could have been anticipated and managed earlier, frequently at a significantly higher financial and commercial cost.
7. Frequently Asked Questions (FAQ)
- Can funds be transferred to Türkiye before the company is incorporated?Yes. Under Turkish law, foreign investors generally enjoy the same rights as domestic investors. In many sectors, they may acquire shares in an existing company or become shareholders through a capital increase. However, banking, finance, energy, defense, media, and certain licensed business activities may be subject to special approvals or notification requirements before the transaction is completed. Therefore, the legal structure of the investment should be assessed separately in light of the sector in which the company operates.
- Is a new shareholder liable for the company’s historical debts?There is no single answer to this question. The transfer of shares does not change the company’s legal identity. As a result, many obligations arising before the investment remain with the company after the transaction is completed. Tax audits, employment claims, contractual liabilities, or administrative sanctions may emerge after the investment and have a significant impact on the company’s financial position.
For this reason, conducting comprehensive legal due diligence before the investment is essential. Any identified risks should also be appropriately allocated and managed through the transaction documentation to reduce the likelihood of future disputes and unexpected financial exposure. - Is acquiring a majority shareholding enough to control a company?Not always. Effective control over a company does not depend solely on the percentage of shares acquired. Preferred share rights, the composition of the board of directors, veto rights, representation authority, and private agreements between shareholders may all have a direct impact on who ultimately controls the company.
For this reason, investors should evaluate not only how many shares they intend to acquire, but also the management and governance rights attached to those shares. Understanding the legal rights associated with the investment is often just as important as the size of the shareholding itself. - Must the investment funds be transferred from the investor’s own bank account?Not necessarily. In international investment transactions, the investment funds may, in certain circumstances, be paid by a holding company, a family office, an investment fund, or a special purpose vehicle (SPV). However, the legal relationship between the paying entity and the investor must be clearly documented.
The flow of funds should be fully consistent with the structure of the investment. Proper documentation is essential not only for legal certainty but also to facilitate banking procedures and compliance with anti-money laundering (AML) and know-your-customer (KYC) requirements. - Is due diligence necessary only for large investments?No. Regardless of the size of the investment, a company’s legal and commercial risks should be assessed before the transaction is completed. The scope of the due diligence process may, of course, vary depending on the size and complexity of the investment. However, even in relatively small transactions, failing to conduct a basic legal review may expose the investor to losses that far exceed the amount initially invested.
- Is a shareholders’ agreement mandatory?It is not legally required for every transaction. However, particularly in companies with more than one shareholder, a shareholders’ agreement is one of the most important instruments for protecting the investment.
Management rights, veto mechanisms, dividend policy, share transfer rules, exit strategies, and dispute resolution procedures may all be regulated through a shareholders’ agreement. In practice, many serious shareholder disputes arise because no shareholders’ agreement was executed or because it was inadequately drafted. - What happens if new risks emerge after the investment has been completed?This is not an exceptional situation in investment transactions. What matters is whether those risks were identified before the investment and properly managed through the transaction documents.
Representations and warranties, specific indemnification mechanisms, escrow arrangements, and purchase price adjustment provisions may all be used to protect the investor against certain risks. If such risks are not addressed in the transaction documents, the parties’ ability to protect their legal position in the event of a dispute may be significantly limited. - What is the greatest risk for a foreign investor?It is not possible to identify a single greatest risk. In practice, the most significant challenge is the combination of multiple risks within the same transaction.
For example, historical tax liabilities, weak corporate governance, incomplete contractual documentation, and unclear exit mechanisms may each be manageable on their own. However, when these risks exist within the same investment, they can significantly reduce the expected economic value of the transaction.
For this reason, successful investors focus not on individual risks in isolation, but on the overall risk profile of the investment.
8. Aetra Legal Perspective
A company investment may overlook many critical risks if it is viewed solely as a share transfer transaction. In international practice, however, an investment is treated as a multidisciplinary process that combines legal structuring, tax planning, financial analysis, corporate governance, and commercial strategy.
Aetra Legal’s approach is based on this understanding. It recognizes that every investment has its own unique risk profile and aims to develop a risk map tailored to the objectives of the investment rather than relying on a standard document review. This approach focuses not only on ensuring that the transaction is legally completed, but also on making the investment sustainable and predictable over the long term.
The success of an investment is measured not on the day the transaction documents are signed, but by its ability to provide the investor with a secure and sustainable ownership structure for years to come.
A company investment may overlook many critical risks if it is viewed solely as a share transfer transaction. In international practice, however, an investment is treated as a multidisciplinary process that combines legal structuring, tax planning, financial analysis, corporate governance, and commercial strategy.
Aetra Legal’s approach is based on this understanding. It recognizes that every investment has its own unique risk profile and aims to develop a risk map tailored to the objectives of the investment rather than relying on a standard document review. This approach focuses not only on ensuring that the transaction is legally completed, but also on making the investment sustainable and predictable over the long term.
The success of an investment is measured not on the day the transaction documents are signed, but by its ability to provide the investor with a secure and sustainable ownership structure for years to come.
9. Conclusion
Türkiye offers a dynamic market with significant opportunities for foreign investors. However, the foundation of a successful investment lies not only in selecting the right company, but also in establishing the appropriate legal structure.
Historical liabilities, management control, financial and tax risks, regulatory compliance, and exit strategies should all be assessed together to enable investors to make well-informed decisions. For this reason, the investment process should not be viewed merely as a share transfer transaction. It should be supported by comprehensive legal due diligence, a properly structured transaction framework, and effective risk management.
A well-planned investment does more than enable investors to capitalize on today’s opportunities. It also helps manage future uncertainties, preserving the long-term value and stability of the investment.
Historical liabilities, management control, financial and tax risks, regulatory compliance, and exit strategies should all be assessed together to enable investors to make well-informed decisions. For this reason, the investment process should not be viewed merely as a share transfer transaction. It should be supported by comprehensive legal due diligence, a properly structured transaction framework, and effective risk management.
A well-planned investment does more than enable investors to capitalize on today’s opportunities. It also helps manage future uncertainties, preserving the long-term value and stability of the investment.
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