What groups usually need
Branch to subsidiary. The commonest restructuring we handle for foreign groups. A branch was the fast way in; then headcount grows, or a customer requires a local legal entity, or the group wants the liability separation a branch does not give. Converting is not a formality — assets, contracts, employees and the tax position all have to move.
Limited company to joint-stock company. Usually driven by something external: a shareholder coming in, a share transfer regime, an intention to raise capital, or a counterparty that expects a JSC. The conversion is a defined Commercial Code process with a balance sheet and valuation at its centre.
Merger of two Turkish entities. Groups that acquired their way into Türkiye often end up with two subsidiaries doing overlapping things and paying for two of everything — two sets of books, two payrolls, two audits.
Demerger. Separating a business line, usually before a sale or to isolate risk.
The condition everyone asks about
Turkish law allows these transactions to be carried out without triggering an immediate tax charge, but only where defined conditions are met — broadly, that the transferee assumes the transferred assets at their existing book values and takes over the associated obligations, and that the process follows the prescribed form.
The conditions are strict and unforgiving. Getting the form wrong does not produce a smaller benefit; it produces a taxable transaction. This is the single reason we insist on being involved before the resolutions are drafted rather than after.
What we actually do
- Opening position. A clean balance sheet at the transfer date, which frequently means fixing things first. Unreconciled intercompany balances, undocumented fixed assets and stale provisions all have to be resolved before anything can be transferred.
- Valuation and the transfer balance sheet, prepared to the standard the process and the registry require.
- Structuring for tax neutrality — testing the conditions against your facts and telling you where they fail, before you commit.
- Employee transfer. Continuity of service, accrued entitlements and the social security registrations. In a branch conversion this is where the unbudgeted cost usually appears, because accrued severance liability moves with the people.
- Post-transaction accounting, so the surviving entity's books reflect what happened and your group can consolidate it.