How to Close a Company in Turkey as a Foreign Shareholder: Liquidation Steps, Timeline and Tax (2026)

A Turkish limited (Ltd. Şti.) or joint-stock (A.Ş.) company is closed through a formal liquidation under the Turkish Commercial Code. The shareholders resolve to dissolve, appoint a liquidator, call creditors three times in the Trade Registry Gazette, wait at least three months after the third call, settle all debts and taxes, distribute the remaining assets and deregister. In practice, a clean liquidation takes about six to twelve months.

Liquidation vs share sale vs merger vs dormancy: which exit fits?

Liquidation ends the company and returns what is left to the shareholders. A share sale transfers the company, with its history, to a buyer. A merger folds it into another group company. Keeping it dormant preserves the entity but not the compliance cost. The right choice depends on whether the company still has value, liabilities or a buyer.

How do you liquidate a company in Turkey? The step-by-step process

Turkish liquidation follows a fixed legal sequence: shareholder resolution, registration of the liquidation, creditor calls, opening inventory and balance sheet, realisation of assets and payment of debts, the three-month waiting period, final tax returns, distribution to shareholders, and deletion from the trade registry.

1. Pre-liquidation review. Reconcile the books, collect or write off receivables, identify tax and SGK exposures, plan employee terminations and decide who will act as liquidator.
2. Dissolution resolution. The general assembly resolves to dissolve the company and appoints the liquidator(s). The resolution is notarised where required and filed with the trade registry.
3. Registration and announcement. The start of liquidation is registered and published; the trade name continues with the addition “in liquidation” (tasfiye halinde).
4. Tax notification and first return. The tax office is notified. A corporate tax return is filed for the short period from the start of the financial year to the liquidation start date.
5. Opening inventory and balance sheet. The liquidator prepares the opening inventory and liquidation balance sheet (Art. 537).
6. Creditor calls. Known creditors are notified in writing; unknown creditors are called three times, one week apart, in the Trade Registry Gazette and on the company website (Art. 541).
7. Realisation. The liquidator collects receivables, sells assets, terminates contracts and pays debts, including taxes and social security premiums.
8. Waiting period. No distribution to shareholders until three months after the third creditor call (Art. 543).
9. Final accounts and tax. The liquidation-end balance sheet is prepared, the final corporate tax return is filed within 30 days of completion, and withholding on any distribution is declared and paid.
10. Distribution. Remaining assets are paid to shareholders pro rata; transfers abroad go through a Turkish bank.
11. Deletion. The final general assembly approves the liquidation accounts and the company is deleted from the trade registry (Art. 545). A designated person keeps the books for ten years (Art. 547).

How long does it take to close a company in Turkey?

The legal minimum is roughly four months: about three weeks for the three creditor calls, then three months before distribution. A clean liquidation of a foreign-owned subsidiary typically takes six to twelve months end to end. Open receivables, employee terminations, pending VAT refunds, litigation or a tax inspection can extend it well beyond a year.

Who can be the liquidator of a Turkish company?

The general assembly appoints the liquidator; if it does not, the managers or board act as liquidators. At least one liquidator authorised to represent the company must be a Turkish citizen resident in Turkey (Turkish Commercial Code Art. 536). A foreign group with only foreign directors must therefore appoint a local liquidator before the process can start.

The liquidator is not a formality. The liquidator signs the tax returns for the liquidation periods, is responsible for paying creditors before shareholders, and can be pursued by the tax office for liquidation-period taxes up to the amounts distributed. Choose someone who will actually supervise the process, and document their authority and fee.

What taxes are due when a Turkish company is closed?

Liquidation is a tax event. The company pays 25% corporate tax on liquidation profit, including gains on asset sales. Certain equity items, such as inflation adjustment differences and reserves, can become taxable when distributed. The amount paid to a foreign shareholder above its paid-in capital is generally treated as a dividend and bears 15% withholding, subject to treaty reduction.

Corporate tax during liquidation

Under Corporate Tax Law Art. 17, liquidation periods replace ordinary accounting periods. A return is filed for the part of the year before liquidation, for each liquidation period, and a final return within 30 days after liquidation is completed. The ordinary 25% rate applies. Assets sold during liquidation — equipment, vehicles, receivables sold at a discount — can produce taxable gains or deductible losses.

Equity items that become taxable

Reserves and equity inflation adjustment differences that were not taxed when created can be taxed at corporate level when they are distributed in liquidation. The effect depends on the company’s inflation-adjustment history and how its equity is composed, so the equity accounts should be analysed before the liquidation balance sheet is prepared.

Withholding on the liquidation surplus

Returning paid-in capital is not taxed. The excess paid to shareholders is generally treated as a profit distribution: 15% withholding for a foreign corporate shareholder, reduced where a double tax treaty applies and a residence certificate is on file. See our guide on getting money out of a Turkish subsidiary for the dividend mechanics.

VAT

Sales of assets during liquidation are subject to VAT under the normal rules. Input VAT carried forward that cannot be used against output VAT is generally lost at closure unless it arises from transactions that qualify for a VAT refund, such as exports. Pending refund claims should be completed before the final return.

Can the tax office inspect a company after it is closed?

Yes. Deletion from the trade registry does not end tax exposure. For pre-liquidation periods, assessments can be directed to the former legal representatives, and for the liquidation period to the liquidators (Tax Procedure Law Art. 10; Law No. 6183, repeated Art. 35). The company can also be restored to the register by court order for the purpose of tax claims.

What happens to employees, SGK and contracts?

Employment contracts must be terminated in line with the Labour Law No. 4857, including notice periods and severance pay for employees with at least one year of service. The workplace must be deregistered with the Social Security Institution (SGK) and all premiums paid. Leases, supplier contracts, bank accounts, e-invoice and e-ledger registrations, and any licences or permits must be closed in an order that does not leave unpaid obligations. Foreign staff holding work permits tied to the company will lose that basis once employment ends.

What drives the cost of closing a company in Turkey?

• State of the books: unreconciled accounts, missing general assemblies or old tax errors must be fixed first.
• Receivables and assets: each receivable to collect or asset to sell extends the timeline and the liquidator’s work.
• Employees: number of staff, severance obligations and any disputes.
• Tax position: equity items that become taxable, carried-forward VAT, pending refunds and the likelihood of an inspection.
• Liquidator arrangement: whether a local liquidator must be engaged from outside the group.
• Official fees: notary, trade registry and Gazette announcement fees, which are modest compared with professional and tax costs.

Closing a company: Turkey vs Poland vs the UK

Turkey’s liquidation is faster than Poland’s but slower than a UK strike-off. In Turkey, assets can be distributed three months after the third creditor call. In Poland, distribution in a limited company liquidation generally waits six months from the liquidation announcement. A solvent, inactive UK company can often apply for voluntary strike-off, which completes about two months after the Gazette notice.

Case analyses

Illustrative, anonymised and simplified scenarios based on recurring situations. The result in any real case depends on its facts.

What happens if…

What happens if we simply stop filing and abandon the company?

The company does not disappear. Tax returns continue to be due, penalties accrue, and the tax office may register the business as having ceased activity without closing the legal entity. Unpaid taxes can be pursued from the legal representatives personally under Law No. 6183, repeated Art. 35, and Tax Procedure Law Art. 10. A formal liquidation is the only way to end these obligations.

What happens if assets are distributed before the three-month period ends?

Distribution before three months after the third creditor call breaches Turkish Commercial Code Art. 543. Liquidators who pay shareholders before creditors can be held personally liable for resulting losses, and a creditor that surfaces later can challenge the distribution.

What happens if a creditor or tax claim appears after deletion?

The company can be restored to the trade register by court order so that the claim can be pursued. Tax assessments for periods before liquidation can be directed at former legal representatives, and for the liquidation period at the liquidators, up to the amounts distributed.

What happens if the company is insolvent?

Voluntary liquidation assumes creditors can be paid in full. If liabilities exceed assets, the managers must consider the balance-sheet insolvency rules of the Turkish Commercial Code (Art. 376), which can lead to bankruptcy proceedings rather than liquidation. The parent may choose to recapitalise or waive intercompany debt first.

Can we change our minds during liquidation?

Yes, if distribution to shareholders has not begun. The general assembly can resolve to return from liquidation and resume business (Art. 548); the resolution must be registered.

Common mistakes when closing a Turkish company

1. Starting liquidation before a Turkish-resident liquidator is lined up.
2. Entering liquidation with uncollected receivables and unresolved staff exits.
3. Not analysing equity items that become taxable on distribution.
4. Losing carried-forward VAT that could have been used or refunded.
5. Distributing cash to the parent before the three-month waiting period.
6. Paying the liquidation surplus at a treaty rate without a residence certificate.
7. Leaving the books with no designated custodian for the ten-year retention period.

Pre-liquidation checklist

Frequently asked questions

Conclusion

Closing a company in Turkey is a defined legal procedure, not an administrative switch-off. The law sets a minimum of roughly four months once liquidation starts, but the real timeline and cost depend on preparation: a Turkish-resident liquidator, collected receivables, settled staff, a clear view of the taxes due on the equity and the surplus, and a residence certificate for the parent. Groups that prepare first usually complete liquidation in six to nine months and avoid personal liability for the people who signed.

This article is provided for general informational purposes and does not constitute legal, tax, accounting or investment advice. The treatment of a liquidation depends on the company’s legal form, equity history, treaty position, documentation and specific facts. Professional advice should be obtained before taking action.