Turkey: An Overview

Türkiye continues to develop as a dynamic legal and investment environment shaped by an evolving regulatory framework, resulting in substantial cross-border transactions and an increasingly sophisticated dispute resolution landscape. Recent legislative reforms and market developments reflect the country’s efforts to adapt its legal framework to economic conditions while maintaining its attractiveness to international investors.

Corporate/M&A

Key legal developments

The Turkish regulatory landscape continues to evolve in response to economic conditions and global regulatory trends, with implications for both M&A transactions and corporate governance.

In this regard, several recent legal developments deserve particular attention, as they introduce additional complexities requiring more extensive analysis in both due diligence processes and corporate management:

• In February 2026, the merger control framework of the Turkish Competition Authority (TCA) was updated through the Communiqué on Amendment (No:2026/2), which introduced several important changes to the merger notification regime. The amendments updated and increased turnover thresholds for notifiable transactions, simplified the notification form, and extended facilitations to venture capital investors. Alongside the general threshold amendments, the updated framework introduced a dedicated regime for technology undertakings, applying lower thresholds to transactions where the target qualifies as a technology undertaking. Given that TMT consistently leads the Turkish M&A market by transaction volume, this development carries particular practical significance. Acquirers that might otherwise fall below the general thresholds may nonetheless be required to notify the TCA where the target operates in digital platforms, software and game software, financial technologies, biotechnology, pharmacology, agricultural chemicals and health technologies.
• The application of Provisional Article 1 of the Communiqué on Capital Loss and Over-Indebtedness has been extended to 1 January 2027. Said Provisional Article 1 allows companies to exclude unrealised foreign exchange losses and 50% of certain leasing, depreciation, and personnel expenses accrued in 2020–2021, when calculating capital loss or over-indebtedness.
• Law No 7545 on Cybersecurity, which entered into force on 19 March 2025, is Türkiye’s first comprehensive statute imposing broad cybersecurity obligations on both public and private actors, framing cybersecurity as a national security matter subject to administrative and criminal sanctions.
• The Communiqué on the Electronic Keeping of Certain Commercial Books, effective as of 1 July 2025, requires joint stock companies subject to governmental authorisation for incorporation, as well as companies incorporated from 2026 onward, to maintain certain commercial books electronically.

Market overview

The Turkish M&A market remained active in 2025, with TCA reviewing 416 transactions during the year. Of these, 162 involved target companies based in Türkiye, and 70 included foreign parties. The total value of the notified transactions reached USD11.81 billion, representing the highest annual figure recorded since 2013.

According to the report Mergers and Acquisitions Trends from KPMG’s Perspective, 2025, the number of M&A transactions increased by more than 20% compared to the previous year, reaching 574 transactions. The total estimated deal volume (including undisclosed transactions), on the other hand, reached USD18.5 billion.

The TMT sector led the market by transaction count, reflecting sustained investor appetite for digital platforms, software and game software, and technology-enabled services. Structurally, minority investments were the predominant deal format in TMT, in contrast to the industrial manufacturing and retail sectors, where acquirers typically sought majority control, a pattern consistent with the growth-stage profile of many Turkish technology companies and the continued involvement of financial sponsors and strategic investors seeking exposure without full consolidation. This leading dynamic of the TMT sector was illustrated by two of the year’s most prominent transactions: Uber’s acquisition of an 85% stake in Trendyol Go for USD700 million and the completion of Kaspi.kz’s acquisition of a controlling interest of 65% in Hepsiburada for USD1.1 billion, both reflecting cross-border strategic interest in Turkish digital commerce and mobility platforms.

Dispute Resolution

Key legal developments

Recent case law indicates a continued shift toward a more arbitration-friendly judicial approach in Türkiye as courts increasingly encounter arbitration-related matters.

• A notable development concerns the interaction between arbitration agreements and bankruptcy proceedings. In its decision dated 1 October 2025 (E. 2025/6-512, K. 2025/591), the Court of Cassation General Assembly held that where a valid arbitration agreement exists, creditors must first obtain an arbitral determination regarding the existence and amount of the debt before initiating bankruptcy proceedings. Direct recourse to bankruptcy proceedings was considered an attempt to circumvent the arbitration clause and therefore contrary to the principles of good faith and pacta sunt servanda.
• Another decision addressed the validity of an arbitration clause co-existing with a non-exclusive foreign court jurisdiction clause. In its decision dated 1 October 2025 (E. 2024/653, K. 2025/584), the Court held that the existence of a clear and unequivocal intention to arbitrate must first be assessed under the lex fori. Reading the contract as a whole, the Court found that granting non-exclusive jurisdiction to English courts created ambiguity as to whether arbitration was intended to be the exclusive dispute resolution mechanism. Accordingly, the arbitration objection was rejected and proceedings before the local courts were allowed to continue.
• Turkish courts have also shown a more restrained approach in the recognition and enforcement of foreign arbitral awards under the New York Convention, interpreting public policy objections more narrowly and avoiding review of the merits.
• At the same time, a structural feature of the enforcement regime remains the multi-stage process for arbitral awards. Separate recognition, enforcement and execution stages may prolong proceedings and reduce the efficiency advantages typically associated with arbitration.

Arbitration framework and practice

Alongside developments in the investment and regulatory environment, Türkiye is strengthening its position in international dispute resolution as both an active user of arbitration and an increasingly reliable arbitral seat.

Türkiye’s arbitration framework follows a dualist structure. Law No 4686 on International Arbitration (IIA), largely based on the UNCITRAL Model Law, governs international arbitrations, while the Code of Civil Procedure governs domestic arbitrations. Alignment between the IIA, the arbitration provisions of the Code of Civil Procedure and the UNCITRAL Model Law ensures a largely harmonised framework for arbitration users. Türkiye is also a party to the New York Convention, which Turkish courts regularly apply in arbitration-related proceedings.

A fixed fee (rather than a fee proportionate to the award value) for enforcing foreign arbitral awards under Law No 7318 continues to help parties cap legal costs.

Institutional developments have reinforced Istanbul’s position as a regional arbitration centre. Applications to the Istanbul Arbitration Centre (ISTAC) increased from 138 cases in 2023 to 167 in 2024 and reached 263 in 2025, representing a 57% increase compared to the previous year.

The Union of Turkish Bar Associations and ISTAC jointly organise arbitration counsel training programmes aimed at expanding professional familiarity with arbitration, particularly in domestic disputes. Remote hearings and electronic filings have also become standard practice through ISTAC’s case management portal and digital infrastructure.

Türkiye also remains an active participant in investor–state dispute settlement. As of early 2026, Türkiye has signed 106 bilateral investment treaties (BITs), 89 of which are currently in force. Türkiye has been a contracting state to the ICSID Convention since 1989 and is also a party to the Energy Charter Treaty. Turkish investors continue to initiate investment treaty claims abroad, reflecting Türkiye’s position both as a capital-importing and capital-exporting economy.

Conclusion

Taken together, these developments illustrate a legal and investment environment that continues to evolve in response to economic realities, regulatory priorities and increasing international integration. The combination of an active transaction market, ongoing regulatory reforms and a maturing arbitration framework reinforces Türkiye’s position as both an attractive investment destination and an emerging regional dispute resolution hub.