These are just some of the legislation sets that must be respected when setting up a company in Turkey. In addition, the procedures related to the Istanbul Stock Exchange when it comes to M&A in Turkey must be taken into account. According to the Turkish Commercial Code, mergers can take place after one company has bought the other or when two companies form a new legal entity. Foreign investments in Turkey have increased over the past years and have also been encouraged by an evolving regulatory regime.

Mergers & Acquisitions in Turkey

“e-Devlet” platform has been added as an option for the submission of merger filings to the TCA. In practice, the TCA had indeed been using its web based e-submission system since the COVID-19 outbreak. Besides, the TCA’s announcement regarding the Amendment also signals a switch to a fully electronic notification form that will be completed online in the near future. Mergers are considered as transfers under this Law, provided that the head office of both parties is located in Turkey and the company assets are transferred completely. Apart from abovementioned subjects, the Communiqué regulates conditions within the scope of merger agreement and report, changes in financial status, protection of shareholders, simplified mergers and further specific cases regarding M&A.

What information may be published by the authority or made available to third parties?

For acquisitions, an asset purchase results in the acquisition of the whole commercial enterprise along with all of its assets and liabilities, including all fixed assets, enterprise value, trade names, other IP rights and other assets which are permanently attached to the business, unless otherwise agreed. The buyer and seller will be jointly liable for the debts of the enterprise for two years following closing of the deal, which in some instances is considered an important decision factor. However, it should also be noted that, the acquirer in case of an acquisition and both merging parties in case of a merger are also responsible to ensure that a filing has been made with respect to notifiable transactions. Under the Turkish merger control regime, persons or undertakings that are parties to the transaction or their authorized representatives can make the filing, jointly or severally.

If the business is not transferred in its entirety and only assets are transferred, the employees are not automatically transferred. In order to transfer all or certain employees, the written consent of each of the employees who are subject to the transfer must be obtained prior to the transfer of the employment agreement. In addition, if the transferor employer is a party to a collective bargaining agreement, such collective bargaining agreement will continue to be effective until a new collective bargaining agreement is executed by the transferee employer.

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National policy on foreign investment was liberalised following amendments to the Foreign Direct Investment Law, which is the main foreign investment legislation in Turkey. In principle, there are no foreign ownership restrictions and foreign investors, regardless of their turkish citizenship lawyer identity or citizenship, can invest in Turkey without any approval or permission. Legal entities established with foreign capital under Turkish law, regardless of their shareholding structure and percentage of foreign investors, are treated as domestic companies.

If the decision is reversed, it will be remanded back to the deciding regional court, which will in turn issue a new decision to take account of the High State Court’s decision. As per Article 27 of the Administrative Procedural Law, filing an administrative action does not automatically stay the execution of the decision of the Board. However, upon request by the plaintiff, the court, providing its justifications, may decide the stay of the execution of the decision if such execution is likely to cause serious and irreparable damage; and if the decision is highly likely to be against the law (i.e. the showing of a prima facie case). In the event that the Board considers the submitted remedies insufficient, the Board may enable the parties to make further changes to the remedies.

The Authority will publish the notified transactions on its official website with the names of the parties and their areas of commercial activity. Moreover, the reasoned decision of the Board is also published on the Authority’s official website upon its finalisation. Finally the parties will need to submit organizational charts or list of subsidiaries demonstrating each person or economic entity directly or indirectly controlled by the Parties. There is no formal requirement applicable for organizational chart or list of subsidiaries for the parties. In terms of formalities/supporting documents, the parties need to submit the signed or latest version of the transaction document that brings about the concentration along with its sworn Turkish translation. Moreover, a signed, notarized and apostilled power of attorney would be required to be able to represent the notifying party before the Competition Authority.

The regional courts will go through the case file both on procedural and substantive grounds. The regional courts will investigate the case file and make their decision considering the merits of the case. In exceptional circumstances laid down in Article 46 of the Administrative Procedure Law, the decision of the regional court will be subject to the High State Court’s review and therefore will not be considered as a final decision. In such a case, the High State Court may decide to uphold or reverse the regional courts’ decision.

The Communiqué on Decree No. 32 on the Protection of the Value of Turkish Currency was amended on 13 September 2018. On the other hand, the Communiqué on Decree No. 32 on the Protection of the Value of Turkish Currency provides various exemptions to the restriction on the determination of foreign currency for contractual fees. For purchases made through stock exchanges, derivatives and shares are generally treated as the same.

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