Joint Ventures Structure Under Turkish Law

Joint ventures between Turkish and non-Turkish companies have become very popular in Turkey in recent years, mainly owing to the emphasis placed by the government on urban transformation projects and developing infrastructure. There are no restrictions on the nationality of shareholders and those holding management rights except for speciic sectors such as TV broadcasting, maritime and civil aviation.

A joint venture is generally considered an ordinary partnership (adi ortaklık), which is not a legal entity under Turkish law, but shareholders usually choose to establish a commercial company. The preferred option is joint stock companies due to the ability to establish groups of shares and the limited aspect of shareholder liability in comparison to those of limited liability companies (for further information please see 3.1.2(d) (Limited Liability Company, Liability).

There is no speciic legislation governing joint ventures in Turkey which are governed by the laws applicable to the type of company established. It is a common practice to enter into a shareholders’ agreement to govern the relationship between the joint venture parties and the maintenance of the joint venture. The provisions of such joint venture agreements may be incorporated into the articles of association of the established company, subject to such provisions not conlicting with any applicable legislation. For example, the inclusion of put option and call option rights are also available to remedy deadlock events should the need arise, as with most jurisdictions.