01.12.2023

Legislative Amendment

Minimum capital amounts of joint stock and limited companies are determined in the articles 332 and 580 of the Turkish Commercial Code No. 6102 (“TCC”). These amounts regulated in the TCC were amended by the "Presidential Decree on Increasing the Minimum Capital Amount for Joint Stock and Limited -Liability Companies" ("Decision") dated 24 November 2023 and numbered 7887, published in the Official Gazette numbered 32380 dated 25 November 2023. Herein change will enter into force on January 1, 2024, in accordance with the correction decision published in the Official Gazette No. 32381 dated November 26, 2023.

What Do the Changes Bring?

Pursuant to the Decision, the minimum capital amounts of joint-stock and limited-liability companies have been changed as follows as of January 1, 2024:

• For joint-stock companies, the minimum capital amount stipulated as 50,000 Turkish Liras increased to 250,000 Turkish Liras,
• For nonpublic joint-stock companies that accept the registered capital system, the minimum initial capital amount stipulated as 100,000 Turkish Liras increased to 500,000 Turkish Liras,
• For limited-liability companies, the minimum capital amount stipulated as 10,000 Turkish Liras increased to 50,000 Turkish Liras.

We would like to remind you that, in accordance with the third paragraph of Article 35 of the Lawyers' Law; Joint stock companies with five times or more capital than the prescribed (minimum) basic capital must have a contracted lawyer. Accordingly, after the change made by the Decision, joint stock companies with a capital of 1,250,000 TL and above must have a lawyer.

What Will Be the Situation of Existing Companies?

In the statement made by the Ministry of Commerce, it was stated that the herein amounts will be applied to joint stock and limited companies to be established after January 1, 2024.

In addition, ithas been announced that existing companies with capital below the specified amounts are not obliged to increase their capital at this stage, and it has been suggested that these companies should increase their capital to at least the mentioned amounts in order to strengthen their equity structures.