Asset Acquisitions in Turkey: Business Transfers, Liability Allocation, Employee Rights and Tax Risks

Introduction

An asset acquisition allows a buyer to acquire selected parts of a business without purchasing the shares of the company that owns them. Depending on the transaction, the buyer may acquire machinery, inventory, real estate, intellectual property, contracts, customer relationships, employees or an entire commercial enterprise.

Asset transactions can offer greater flexibility than share acquisitions because the buyer may define which assets it intends to purchase. However, Turkish law does not always permit the buyer to exclude every liability merely by stating so in the acquisition agreement. Where a commercial enterprise is transferred together with its assets and liabilities, statutory responsibility toward creditors may arise.

An asset acquisition must therefore be planned under the Turkish Commercial Code, Turkish Code of Obligations, Labour Law, tax legislation, competition rules and sector-specific regulations.

Asset Acquisition or Share Acquisition?

In a share acquisition, the buyer acquires shares in the target company. The company remains the owner of its assets and continues to be responsible for its historical liabilities, contracts, employees and regulatory obligations.

In an asset acquisition, the buyer acquires specified assets or an operating business directly from the seller. The parties may structure the transaction as:

• A sale of individual assets;
• A transfer of a business division;
• A transfer of a workplace;
• A transfer of an entire commercial enterprise;
• A tax-neutral corporate restructuring where the statutory conditions are satisfied.

Asset transactions may allow the buyer to avoid acquiring unwanted business divisions. Nevertheless, employment liabilities, enterprise debts, environmental exposure, customer obligations and regulatory responsibilities may still follow the transferred business under mandatory law.

Transfer of an Entire Commercial Enterprise

Article 11 of the Turkish Commercial Code permits a commercial enterprise to be transferred as a whole without completing a separate disposal transaction for every individual asset.

Unless the parties agree otherwise, the transfer is presumed to include the enterprise’s fixed assets, business value, tenancy rights, trade name, intellectual property rights and assets permanently allocated to the business.

A commercial enterprise transfer agreement must be executed in writing and registered and announced through the trade registry. (TBMM CDM)

Although the enterprise may be transferred as a whole, the agreement should still contain a detailed inventory. The parties should identify:

• Machinery and equipment;
• Inventory and raw materials;
• Receivables;
• Real estate;
• Vehicles;
• Trademarks, patents and software;
• Customer and supplier contracts;
• Employees;
• Licences and permits;
• Debts and contingent liabilities;
• Books, records and electronic accounts.

A general statement that “all business assets are transferred” may not adequately resolve disputes concerning excluded assets, historical receivables or liabilities that were not known at signing.

Transfer of Individual Assets

Where the transaction does not constitute the transfer of an entire commercial enterprise, each asset must ordinarily be transferred according to the rules applicable to that asset.

For example:

• Real estate ownership requires registration with the land registry;
• Vehicles require completion of the applicable registration procedure;
• Movable assets generally require transfer of possession;
• Registered trademarks and patents require appropriate registry filings;
• Receivables require assignment;
• Bank accounts usually cannot simply be transferred without bank involvement;
• Licences may require regulatory approval or a new application.

The asset purchase agreement should distinguish between assets transferred automatically at closing and assets requiring separate documents or post-closing registration.

Liability for the Seller’s Business Debts

One of the most important issues in a Turkish business acquisition is Article 202 of the Turkish Code of Obligations.

A person acquiring a business together with its assets and liabilities becomes liable toward the business creditors from the date on which the acquisition is notified to the creditors or announced in the Turkish Trade Registry Gazette.

The seller also remains jointly liable with the buyer for two years. For debts already due, the two-year period begins from the notification or announcement date. For debts becoming due later, the period begins from their maturity date. If the required announcement or notification is not made, the two-year period applicable to the seller does not begin. (TBMM CDM)

The buyer and seller may agree between themselves that certain debts will remain with the seller. Such an agreement may create a contractual right of recourse between the parties, but it does not necessarily eliminate the statutory rights of third-party creditors.

The buyer should therefore investigate:

• Supplier debts;
• Customer advances;
• Bank loans;
• Lease liabilities;
• Warranty claims;
• Tax and social security exposure;
• Pending litigation;
• Guarantees;
• Contractual penalties;
• Environmental obligations;
• Employee claims.

Where liabilities cannot be fully quantified, the purchase agreement should include specific indemnities, escrow arrangements or purchase-price retention.

Contract Transfers and Counterparty Consent

An asset acquisition does not always result in the automatic transfer of every commercial contract.

Under Article 205 of the Turkish Code of Obligations, a contractual relationship may be transferred through an agreement involving the transferor, transferee and the remaining contractual party. Consent may be given in advance or after the transfer. The transfer must also comply with the form required for the underlying contract. (TBMM CDM)

Material contracts should therefore be reviewed for:

• Assignment restrictions;
• Change-of-control provisions;
• Prior consent requirements;
• Termination rights;
• Minimum purchase commitments;
• Exclusivity;
• Financial covenants;
• Guarantees;
• Regulatory requirements.

The acquisition agreement should identify which contracts require consent and make the receipt of essential consents a condition precedent to closing.

A buyer should not pay for a business based on expected customer revenue without confirming that the relevant customer contracts can legally and commercially continue after the transfer.

Transfer of Employees

Where an asset transaction constitutes the transfer of a workplace or part of a workplace, existing employment agreements pass to the buyer with all rights and obligations.

The buyer must calculate seniority-based entitlements by reference to the employee’s original commencement date with the seller. For employment debts arising before the transfer and payable on the transfer date, the seller and buyer are jointly liable, while the seller’s statutory responsibility is generally limited to two years.

The transfer itself does not constitute a valid reason for dismissal by either the seller or the buyer. Termination rights based on genuine economic, technological or organisational reasons remain available under the applicable conditions. (TBMM CDM)

The parties should review:

• Employee lists and job descriptions;
• Salaries and bonuses;
• Accrued annual leave;
• Overtime claims;
• Severance exposure;
• Social security declarations;
• Workplace practices;
• Collective bargaining agreements;
• Pending employment disputes;
• Occupational health and safety records.

Employees should not be artificially dismissed and rehired merely to reset their seniority. Such an arrangement may not eliminate statutory employment rights.

Allocation of Employees to the Transferred Business

Complexity may arise where the seller transfers only one business line but employees work for several divisions.

The parties should determine which employees are organisationally attached to the transferred workplace or business unit. Relevant factors may include:

• The employee’s actual duties;
• Reporting lines;
• Work location;
• Cost-centre allocation;
• Time spent supporting the transferred business;
• Whether the business unit retains its organisational identity.

Employees who do not automatically transfer may be seconded, offered new employment or retained by the seller, depending on the circumstances and applicable employment-law requirements.

Real Estate

Real estate used by the business may be owned by the seller, leased from a shareholder or occupied under an informal arrangement.

Before closing, the buyer should examine:

• Title records;
• Mortgages and attachments;
• Zoning status;
• Construction and occupancy permits;
• Easements;
• Lease agreements;
• Environmental restrictions;
• Property tax liabilities;
• Pending title or expropriation disputes.

Where real estate is included in the transaction, ownership must be transferred through the land registry. Inclusion of the property in a general asset purchase agreement alone is insufficient to transfer title.

Where the business operates from leased premises, the buyer should confirm whether the tenancy rights are included in the enterprise transfer and whether the lease contains consent, assignment or termination provisions.

Intellectual Property and Technology

A business acquisition may lose substantial value if its trademarks, software or domain names are not properly transferred.

The buyer should verify ownership of:

• Trademarks;
• Patents;
• Industrial designs;
• Copyright;
• Software;
• Source code;
• Domain names;
• Databases;
• Social-media accounts;
• Trade secrets;
• Know-how.

Intellectual property may be registered in the name of a founder, employee or related company rather than the seller. The acquisition agreement should require execution of separate assignments and completion of registry filings where necessary.

Software licences should also be reviewed because many licences prohibit transfer without the provider’s consent.

Customer Data and Personal Data Protection

The transfer of customer, supplier and employee databases constitutes personal-data processing and may involve the transfer of personal data to a new data controller.

The parties should determine:

• The legal basis for the transfer;
• Whether the transferred data are necessary for the acquired business;
• Whether data subjects must be informed;
• Whether obsolete data should be deleted;
• Whether special-category personal data are included;
• Whether the data will be transferred abroad;
• Which party will respond to historical data-subject requests;
• How access will be controlled during due diligence and transition.

Personal data should not be treated as an unrestricted commercial asset. Processing and transfer must comply with the Turkish Personal Data Protection Law and the principles of purpose limitation, proportionality and data security. (Kişisel Verileri Koruma Kurumu)

If data will be transferred abroad after closing, the cross-border transfer mechanism under Article 9 must also be reviewed. Standard contracts are among the available safeguards, and the signed standard contract must be notified to the Turkish Data Protection Authority within five business days. (Kişisel Verileri Koruma Kurumu)

Regulatory Licences and Permits

A licence held by the seller does not automatically pass to the buyer merely because the related business assets are transferred.

This issue is particularly important in sectors such as:

• Energy;
• Healthcare;
• Private education;
• Food and pharmaceuticals;
• Telecommunications;
• Payment services;
• Insurance;
• Aviation;
• Mining;
• Tourism;
• Defence.

The relevant regulation may require prior approval, notification, amendment of the licence or an entirely new application.

The transaction timetable should allow sufficient time for regulatory approval. Where the business cannot legally operate without a particular licence, that approval should normally be a condition precedent.

Environmental Liabilities

The acquisition of an industrial facility may expose the buyer to contamination, waste-management and remediation risks.

Environmental due diligence may include:

• Soil and groundwater testing;
• Waste permits;
• Emission records;
• Hazardous-material storage;
• Environmental fines;
• Remediation orders;
• Historical industrial use;
• Compliance with operating permits.

Contractual wording that historical contamination remains the seller’s responsibility may not prevent authorities from pursuing the current operator or property owner under applicable public-law rules.

Known environmental risks should therefore be addressed through remediation before closing, price adjustment, escrow or specific indemnities.

Taxation of an Ordinary Asset Sale

An ordinary asset sale is generally treated as a taxable disposal by the seller.

The difference between the sale price and the tax book value of the assets may form part of the seller’s taxable income. VAT treatment depends on the type of asset, the seller’s status and any applicable exemption. Real estate, vehicles and registered assets may also create title deed, registration or other transaction costs.

The parties should establish whether the stated purchase price is:

• Inclusive or exclusive of VAT;
• Allocated separately among the assets;
• Subject to withholding or other taxes;
• Adjustable following closing;
• Payable in Turkish lira or foreign currency.

The purchase-price allocation may affect depreciation, VAT, corporate tax and future disposal gains. The allocation should therefore be commercially supportable rather than determined solely to obtain a tax advantage.

Tax-Neutral Transfers

Not every transfer of business assets is tax neutral.

Tax-neutral treatment may be available where the transaction satisfies the conditions of Articles 19 and 20 of the Corporate Tax Law, including qualifying mergers, full demergers, partial demergers or share exchanges.

Where those statutory conditions are met, gains arising solely from the restructuring may not be immediately calculated and taxed. The transferred assets generally continue at their existing book values rather than receiving a market-value step-up. (Gelir İdaresi Başkanlığı)

Qualifying transfers and demergers under the Corporate Tax Law may also benefit from the VAT exemption in Article 17/4-c of the VAT Law. An ordinary commercial asset sale does not obtain this exemption merely because the parties describe it as a business transfer. (Gelir İdaresi Başkanlığı)

Corporate-law validity and tax neutrality must therefore be assessed separately before the transaction documents are signed.

Competition Authority Approval

An asset acquisition may require prior approval from the Turkish Competition Authority where the acquired assets constitute all or part of a business and the transaction creates a permanent change of control.

The analysis is based on control rather than the title of the agreement. An acquisition of machinery alone may not create control, while the acquisition of assets, employees, contracts, technology and customer relationships forming an operating business may constitute a notifiable concentration.

In February 2026, the principal merger-control thresholds were increased. The individual Turkish turnover threshold was raised to TRY 1 billion, the combined Turkish turnover threshold to TRY 3 billion and the worldwide turnover threshold to TRY 9 billion, depending on the applicable notification test. Special rules continue to apply to qualifying technology undertakings. (Rekabet Kurumu)

Where notification is required, the parties should not implement the transaction before Competition Board approval.

The Asset Purchase Agreement

The asset purchase agreement should clearly define what the buyer is acquiring and what remains with the seller.

Key provisions generally include:

• Definition of transferred assets;
• Excluded assets;
• Assumed and excluded liabilities;
• Purchase price and allocation;
• VAT and transaction taxes;
• Conditions precedent;
• Regulatory and third-party approvals;
• Employee transfer;
• Contract assignments;
• Intellectual property;
• Data transfer;
• Closing procedure;
• Seller warranties;
• Specific indemnities;
• Liability limitations;
• Escrow or retention;
• Transitional services;
• Non-compete obligations;
• Dispute resolution.

A general disclaimer that the buyer assumes no liabilities may be insufficient where mandatory rules impose responsibility toward creditors, employees or authorities.

Representations and Warranties

The seller may be required to warrant that:

• It owns the transferred assets;
• The assets are free from undisclosed security;
• The assets are sufficient to operate the business;
• Material contracts are valid;
• Licences are current;
• Intellectual property is properly owned;
• Employee information is accurate;
• No material litigation has been concealed;
• Taxes relating to the business have been properly declared;
• Personal data have been processed lawfully;
• No environmental violation has been concealed.

Known risks should not be left solely to general warranties. They should usually be addressed through specific indemnities.

Closing Mechanics

The parties should prepare a detailed closing checklist because different assets may require different transfer procedures.

Closing documents may include:

• Commercial enterprise transfer agreement;
• Trade registry applications;
• Land registry documents;
• Vehicle transfer documents;
• Intellectual-property assignments;
• Receivable assignments;
• Contract novations;
• Employee records;
• Bank instructions;
• Delivery certificates;
• Inventory counts;
• Password and account transfers;
• Corporate approvals;
• Regulatory consents.

Payment may be linked to simultaneous completion of the principal transfer actions. Escrow may be used where registrations or consents will be completed after signing.

Transitional Services

The acquired business may initially depend on systems or services provided by the seller.

A transitional services agreement may cover:

• Accounting;
• Payroll;
• IT systems;
• Software access;
• Procurement;
• Warehousing;
• Office space;
• Customer support;
• Regulatory assistance;
• Use of trademarks;
• Employee secondments.

The agreement should specify duration, service levels, charges, liability, data security and termination.

Without transitional support, the buyer may formally acquire the assets but remain unable to operate the business immediately after closing.

Common Risks in Turkish Asset Acquisitions

Common problems include:

• Assuming no liabilities will transfer;
• Failing to register the commercial enterprise transfer;
• Omitting assets from the transfer inventory;
• Paying before essential contracts are assigned;
• Ignoring employee-transfer rules;
• Assuming licences transfer automatically;
• Failing to verify intellectual-property ownership;
• Acquiring customer data without a lawful basis;
• Treating an ordinary asset sale as tax neutral;
• Completing the transaction before competition clearance;
• Ignoring environmental exposure;
• Failing to arrange transitional services;
• Using a purchase-price allocation unsupported by commercial value.

Practical Asset Acquisition Checklist

Before completing an asset acquisition in Turkey, the buyer should:

1. Determine whether the transaction is an individual asset sale or an entire business transfer.
2. Identify all transferred and excluded assets.
3. Conduct legal, tax, financial and technical due diligence.
4. Investigate business debts and statutory liability.
5. Review contract-assignment and consent requirements.
6. Identify transferring employees and accrued rights.
7. Verify ownership of real estate and intellectual property.
8. Review licences and sector approvals.
9. Assess personal-data transfer requirements.
10. Conduct environmental review where relevant.
11. Determine VAT and other tax consequences.
12. Assess Competition Authority notification.
13. Prepare separate transfer documents for registered assets.
14. Establish warranties, indemnities and escrow protection.
15. Prepare a detailed closing and transition plan.

Conclusion

Asset acquisitions allow investors to acquire a Turkish business or selected assets without purchasing the seller’s shares. This flexibility may help the buyer exclude unwanted divisions or liabilities, but it does not automatically eliminate statutory responsibility.

A transfer of an entire commercial enterprise may result in liability for business debts. Employment agreements may pass automatically with the workplace, while contracts, licences, real estate and intellectual property may require separate approvals or registrations.

The transaction should therefore be structured only after the asset perimeter, liabilities, employee population, tax treatment and regulatory requirements have been clearly identified. A detailed acquisition agreement, supported by due diligence and a properly coordinated closing process, is essential to ensure that the buyer acquires an operational business rather than a collection of assets accompanied by undisclosed legal risks.