Dormancy Is Not An Exit Strategy: Company Liquidation In Turkey For Foreign Shareholders

I. Introduction

Foreign investors often establish companies in Turkey as part of a wider regional or group strategy: to hold assets, serve local customers, support production, or act as a regional hub. Over time, that strategy is bound to change. Market conditions, internal restructuring, currency volatility or the simply the cost of keeping a dormant entity alive can make it commercially unnecessary to maintain a Turkish company.

Under Turkish law, however, a company cannot simply be left dormatn and forgotten. Company liquidation in Turkey ("şirket tasfiyesi") is a formal process governed by the Turkish Commercial Code, requiring the company's existing activities to be brought to an orderly end, its creditors to be identified and paid, and any remaining assets to be distributed to shareholders before the company is removed from the trade registry. Until these steps are completed, the company continues to exist and can still generate tax, administrative or