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Company Formation

Holding Company Formation in Türkiye

Planning the holding structure, Ministry of Trade approval, preparing the articles of association and capital structure, transferring shares to the holding, and the post-formation accounting and tax set-up.

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Overview

A holding is not a separate company type under the Turkish Commercial Code No. 6102 (Türk Ticaret Kanunu). In practice, a holding is formed as a joint stock company (Anonim Şirket) whose principal purpose is to participate in the capital of other companies. Joint stock companies formed in this way must include the word “holding” in their trade name. (Communiqué on Trade Names (Ticaret Unvanları Hakkında Tebliğ), Art. 4/5)

The formation of holdings established as joint stock companies, and amendments to their articles of association (esas sözleşme), are subject to the approval of the Ministry of Trade (Ticaret Bakanlığı). For this reason, at formation the Ministry’s approval is obtained before the application for registration with the trade registry (ticaret sicili). (Turkish Commercial Code, Art. 333; Communiqué on joint stock companies subject to approval, Art. 5)

If the holding obtains the majority of voting rights in the companies in which it holds shares, or keeps those companies under its control by other means, it becomes a controlling company within the meaning of the Turkish Commercial Code, and the provisions on groups of companies apply. (Turkish Commercial Code, Art. 195)

As KEYBIZ CPAs & Advisors, we provide advisory services on planning the holding structure, preparing the approval and registration documents, transferring shares to the holding, and the post-formation accounting and tax set-up. For the general steps of forming a joint stock company, see our Limited Liability and Joint Stock Company Formation in Türkiye page.

Holding Formation Process

  1. Planning the Structure

    The following are determined: the companies whose shares the holding will take over, the route by which the shares will pass to the holding, the shareholding ratios and the management structure. The shares can be contributed as capital in kind, purchased by the holding for cash or taken over through a share exchange; each of these routes is explained separately below.

  2. Articles of Association and Trade Name

    In the articles of association, the business purpose is drafted so that it covers participation in the capital of other companies, and the word “holding” is used in the trade name.

    The share capital of a joint stock company is at least TRY 250,000. For non-public joint stock companies that adopt the registered capital system (kayıtlı sermaye sistemi), the initial capital is at least TRY 500,000. (Turkish Commercial Code, Art. 332; Presidential Decision No. 7887)

  3. Ministry of Trade Approval

    To form the holding, an application is made to the Ministry of Trade and formation approval is obtained before the registration application. Amendments to the articles of association after the holding is formed are also subject to Ministry approval. (Turkish Commercial Code, Art. 333; Communiqué on joint stock companies subject to approval, Art. 5 and 6)

  4. Contribution of Capital

    • Cash capital: At least 25% is paid before registration, and the remainder within 24 months following registration. (Turkish Commercial Code, Art. 344)
    • Capital in kind (ayni sermaye): Assets such as existing company shares that are free of limited rights in rem, attachments or interim injunctions, can be valued in cash and are transferable may be contributed as capital in kind. (Turkish Commercial Code, Art. 342) Capital in kind is valued by experts appointed by the commercial court of first instance (asliye ticaret mahkemesi) at the place where the company’s head office will be located. (Turkish Commercial Code, Art. 343)

  5. Registration and Filings

    After the Ministry’s approval, the formation is registered with the trade registry. The notification of commencement of business is forwarded to the tax office (vergi dairesi) by the trade registry directorate (ticaret sicili müdürlüğü). (Tax Procedure Law No. 213, Art. 153) Notification of the formation to the trade registry is deemed to have been made to the Social Security Institution (SGK). (Law No. 5510, Art. 11)

    Electronic books (ETDS): Because holdings in the form of joint stock companies are among the companies whose formation is subject to Ministry approval, they keep the share register and the general assembly meeting and minutes book in the Ministry of Trade’s electronic book system. In addition, companies whose formation is registered with the trade registry from 1 January 2026 must keep these two books electronically, whether or not they are subject to approval. (Communiqué on Keeping Commercial Books Not Related to the Accounting of the Business in Electronic Form, Art. 5/1) No opening and closing certification is required for books kept electronically, and these books cannot be transferred back to paper form.

    Board of directors’ resolution book: With the amendment dated 20 September 2025, the scope of the electronic-keeping obligation was limited to the share register and the general assembly meeting and minutes book. The company may choose to keep the board of directors’ resolution book on paper or, optionally, electronically. (Communiqué on Keeping Commercial Books Not Related to the Accounting of the Business in Electronic Form, Art. 5)

  6. Transfer of Shares to the Holding

    There are three different routes for transferring existing company shares to the holding, and each has different legal and tax consequences:

    • Capital in kind: The shareholders contribute their shares as capital at the formation of the holding or in a capital increase; the value of the shares is determined by court-appointed experts. (Turkish Commercial Code, Art. 342, 343)
    • Purchase for cash: The holding buys the shares from the shareholders against payment. The tax position of the selling shareholder is assessed separately.
    • Share exchange (hisse değişimi): A share exchange is the takeover by a fully liable (tam mükellef) capital company of the shares of another capital company in a way that gives it the management and the majority of the shares of that company, in return for giving the transferring shareholders shares representing its own capital. Paying in cash up to 10% of the nominal value of the shares given to the shareholders does not prevent the transaction from being treated as a share exchange. (Corporate Tax Law No. 5520, Art. 19/3-c)

    The tax consequences of a share exchange are determined by whether the transaction meets these conditions and by the provisions of Art. 19 and 20 of the Corporate Tax Law.

Tax Matters in a Holding Structure

Domestic participation income: Income derived from participation in the capital of a fully liable corporation is exempt from corporate tax. (Corporate Tax Law, Art. 5/1-a)

Foreign participation income, general exemption: Income from a foreign participation in the form of a joint stock or limited liability company is exempt, provided that at least 10% of the participation’s paid-in capital is held, the shares have been held continuously for at least one year as of the date the income is earned, the income bears a total tax burden similar to income and corporate tax of at least 15% in the country where the participation is located, and the income is transferred to Türkiye by the due date of the corporate tax return for the relevant period. If the main activity of the participation is financing, including financial leasing, insurance services or securities investment, the tax burden must be at least the corporate tax rate in Türkiye. (Corporate Tax Law, Art. 5/1-b)

Foreign participation income, 80% exemption: If at least 20% of the foreign participation’s paid-in capital is held and the income is transferred to Türkiye by the due date of the corporate tax return for the relevant period, 80% of the income is exempt, without the other conditions of the subparagraph being required. These rates were set by Presidential Decision No. 11257 for tax periods beginning on or after 1.1.2026; the rates written in the law are a holding of at least 50% and a 50% exemption, and these statutory rates apply to periods beginning before 1.1.2026. The paragraph was added by Law No. 7491; this option does not exist for earlier periods. (Corporate Tax Law, Art. 5/1-b; Law No. 7491; Presidential Decision No. 11257)

Sale of participation shares: 50% of the gain from the sale of participation shares held as assets on the balance sheet for at least two full years (730 days) is exempt from corporate tax; the exemption applies to the gain, not to the sale price. This rate applies to sales made from 27.11.2024 under Presidential Decision No. 9160; the previous rate was 75%. To benefit from the exemption, the exempt amount is kept in a special fund account on the liabilities side until the end of the fifth year following the year of sale, and the sale price is collected by the end of the second calendar year following the year of sale. The VAT (KDV) exemption is assessed separately, under its own conditions. (Corporate Tax Law, Art. 5/1-e, 5/2; Presidential Decision No. 9160; VAT Law No. 3065, Art. 17/4-r)

Gains from the sale of securities that corporations engaged in securities trading hold for that purpose are not covered by the exemption. For this reason, shares the holding acquires and holds as participations are tracked separately from shares it holds for securities trading, and the participation purpose is shown in records and documents. (Corporate Tax Law, Art. 5/1-e)

Intra-group transactions: Purchases and sales of goods and services, borrowing relationships and other transactions between the holding and its affiliated companies are subject to the arm’s length principle (emsallere uygunluk ilkesi). (Corporate Tax Law, Art. 13) For details, see our Transfer Pricing page.

Obligations of a Group of Companies

If a commercial company holds the majority of the voting rights of another commercial company, can elect the majority of its management body needed to take decisions, or can keep the other company under its control through a contract or by other means, the first company is the controlling company (hâkim şirket) and the other is the controlled company (bağlı şirket). (Turkish Commercial Code, Art. 195)

Within the first three months of the financial year, the board of directors of the controlled company prepares a report on its relations with the controlling company and the group companies (dependency report, bağlılık raporu). (Turkish Commercial Code, Art. 199)

Frequently Asked Questions

Is a Holding a Separate Company Type?

No. A holding is a joint stock company whose principal purpose is to participate in the capital of other companies, and it is subject to the provisions on joint stock companies.

Is Holding Formation Subject to Ministry Approval?

Yes. The formation of holdings established as joint stock companies, and amendments to their articles of association, are subject to the approval of the Ministry of Trade. Approval is obtained before the application for registration with the trade registry. (Turkish Commercial Code, Art. 333; Communiqué on joint stock companies subject to approval, Art. 5)

Is It Mandatory to Use the Word “Holding” in the Trade Name?

Joint stock companies formed with the principal purpose of participating in other enterprises must include the word “holding” in their trade name. (Communiqué on Trade Names, Art. 4/5)

What Is the Minimum Capital to Form a Holding?

Because a holding is formed as a joint stock company, its share capital is at least TRY 250,000. TRY 500,000 is the minimum initial capital required only for non-public joint stock companies that adopt the registered capital system. (Turkish Commercial Code, Art. 332; Presidential Decision No. 7887)

How Are Existing Company Shares Transferred to the Holding?

The shares can be contributed as capital in kind, purchased by the holding for cash or taken over through a share exchange. For capital in kind, the value of the shares is determined by court-appointed experts (Turkish Commercial Code, Art. 342, 343). In a share exchange, the acquiring fully liable capital company obtains the management and the majority of the shares of the target company and gives its own shares in return; the cash portion may not exceed 10% of the nominal value of the shares given (Corporate Tax Law, Art. 19/3-c). The tax consequences depend on the conditions of the transaction and the provisions of Art. 19–20 of the Corporate Tax Law.

Are Dividends Received from Controlled Companies Taxed?

Income derived from participation in the capital of a fully liable corporation is exempt from corporate tax. (Corporate Tax Law, Art. 5/1-a) For dividends received from foreign participations, the general exemption conditions in Art. 5/1-b of the Corporate Tax Law, or, for periods beginning on or after 1.1.2026, the 80% exemption that applies subject to a holding of at least 20% and transfer within the required period (Presidential Decision No. 11257), are assessed.

What Is the Exemption Rate on the Sale of Participation Shares?

For sales made from 27.11.2024, 50% of the gain from the sale of participation shares held as assets on the balance sheet for at least two full years is exempt. The exempt amount is kept in a special fund until the end of the fifth year following the year of sale, and the sale price is collected by the end of the second calendar year following the year of sale. Shares held for securities trading cannot benefit from this exemption. (Corporate Tax Law, Art. 5/1-e; Presidential Decision No. 9160)

What Is a Dependency Report?

It is the report that the board of directors of the controlled company prepares within the first three months of the financial year on transactions with the controlling company and the companies affiliated with it. (Turkish Commercial Code, Art. 199)

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