Turkey: Presidential Decree numbered 7887 on Increasing the Minimum Capital Amount for Joint Stock and Limited Liability Companies
With the Presidential Decree numbered 7887, the minimum capital requirements for joint stock and limited liability companies to be established in Türkiye as of 1 January 2024 were increased by 5 times.
For joint-stock companies, the minimum capital is raised from TRY 50,000 to TRY 250,000, while for limited liability companies, the minimum capital is raised from TRY 10,000 to TRY 50,000. Additionally, the new minimum capital amount for non-public joint-stock companies adopting the registered capital system is determined as TRY 500,000 instead of TRY 100,000.
Key changes and requirements
The new capital requirement will be applicable to newly established companies established as of 1 January 2024. Existing companies with capital below the new thresholds are not obliged to increase their capital for now, but it is recommended for them to consider strengthening their equity structures by increasing capital to meet the revised requirements. For a capital increase a registration application needs to be filed before the relevant trade registry.
However, as per the Circular issued by the Directorate General of Domestic Trade, as of 1 January 2024:
If a company having less capital than the new amounts will realize a capital increase, the company’s new capital should meet the new capital requirements.
In a partial division, in case of capital reduction, the capital of the divided company must be determined in a way that does not fall below the new capital amount requirements.
In case of a company type change, the capital of the new type must be determined so that it does not fall below the new capital amount requirements.
In the calculations regarding the loss of the company's capital and legal reserves within the scope of Article 376 of the Turkish Commercial Code, the registered capital of the company will be taken as basis, but in cases where measures need to be taken, action will be taken within the framework of the explanations given in this Circular.
How can we help?
Computershare Governance Services global team of professionals can provide advisory services in Turkey where you will be supported with the adoption of the increase in minimum capital requirements on newly created entities. Further, the dedicated team can provide advisory services in share capital changes for existing entities that elect to increase capital at this time to strengthen their equity structures.
Computershare’s leading entity management system GEMS can help you manage and store your capital amounts, as well as the information about shareholdings and ownership on a global basis.[JD1] [RB2]
Contact:
Please contact your dedicated Computershare Relationship Manager or send an email to globalentityservices@computershare.com for more information about how Computershare may assist you in responding to these new requirements.
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