📌 A Glance at Share Certificates in Turkiye: Tax Advantages, Legal Requirements and Procedures
Benefits of share certificates in Turkey should be known by foreign investors. Learn the legal requirements, procedures, and tax advantages of issuing stock certificates. Explore how bearer and registered shares benefit shareholders with real-world examples.
Are You Doing Business in Türkiye as a Foreign Executive? Here’s What You Need to Know About Stock certificates
Issuing stock certificates offers significant tax advantages and plays a critical role in the legal and financial structuring of a Joint Stock Company (JSC). Whether you’re already operating in Türkiye or planning to invest, understanding the legal framework and procedures is essential.
🔍 Quick Overview
Main Topics Covered:
- Types of the shares and stock certificates
- Legal requirements for issuing stock certificates
- Step-by-step procedures for registered and bearer certificates
- Statutory content of stock certificates
- High-security printing measures
- Tax advantages for real persons and legal entities
- Clarifying common misconceptions
Types of the Shares and Stock certificates
A Joint Stock Company in Türkiye can issue two types of stock certificates:
- Registered Stock certificates: Include shareholder’s name, title, and address.
- Bearer Stock certificates: Do not include personal details; ownership is based on possession.
Legal Requirements for Issuing Stock certificates
- Bearer Stock certificates must be issued within 3 months after the full nominal value is paid.
- Registered Stock certificates must be issued upon request by minority shareholders (≥10% capital or 5% in public companies).
- The board of directors can issue registered certificates without any request, in the interest of the shareholders.
How to Issue Stock certificates
3.1 Bearer Stock certificates: 4-Step Procedure
- Board Decision: Decide on number, order, clipping details.
- MKK Notification: Register with the Central Registry Agency (HPKS).
- Trade Registry Application: Register and announce the board decision.
- Issuance and Delivery: Certificates are printed and delivered by UPSD after company approval.
3.2 Registered Stock certificates: Simplified Process
- No MKK or trade registry requirement.
- UPSD recommends taking a board decision for clarity.
- Drafts are prepared, approved, printed, and delivered.
Statutory Content Requirements
Bearer Certificates Must Include:
- Company trade name
- Capital details (current and establishment date)
- Number of the shares and nominal value
- Signatures of authorized directors
Registered Certificates Must Include:
- All above + shareholder’s name, address, and paid amount
Security Features: A Legal Obligation Since 2012
- Under TCC No. 6102, stock certificates must have anti-fraud security measures.
- Printing certificates via ordinary printers is no longer valid.
- UPSD ensures high-security, legally compliant stock certificates.
Tax Advantages of Issuing Stock certificates
6.1 For Real Person Shareholders (Income Tax)
- Gains from bare shares: Taxable
- Gains from stock certificates held ≥ 2 years: Income tax exempt
Example:
If a shareholder sells stock certificates for 10 million TL after 2 years, no income tax is due, regardless of type.
6.2 For Legal Entity Shareholders (VAT and Corporate Tax)
- Corporate tax: 50% exemption on earnings within 2 years, applies to both bare and certified shares.
- VAT:
- Bare share transfer = VAT applicable
- Certified share transfer = VAT exempt (Article 17/4-g)
Conclusion: Stock certificates significantly reduce income tax and VAT burdens, sometimes saving millions of Turkish Liras.
Misleading Claims: No Official Permission Required
Contrary to claims by some printing houses:
- There is no need for Ministry authorization to print stock certificates.
- No legal contract can be made with the Ministry of Finance regarding stock certificate printing.
UPSD stands against such unethical practices and operates with full legal compliance and integrity.
✅ Why Choose UPSD?
- Years of specialized expertise in stock certificate consulting
- Not just a printing house — a legal compliance partner
- End-to-end service from draft to delivery
- High-security printing in full legal compliance
- English-speaking support for foreign investors and executives
📞 Contact Us for Professional Support
Whether you need assistance with:
- Stock certificate issuance
- Legal compliance in Türkiye
- Tax optimization through certified shares
👉 UPSD is your trusted partner. Feel free to contact us for a free consultation.
📣 FAQ
❓ What are the tax advantages of issuing stock certificates?
Stock certificates offer income tax exemptions for individuals and VAT exemptions for legal entities. Gains from registered or bearer certificates held for over two years are not subject to income tax. Legal entities can benefit from VAT exemption under Article 17/4-g.
Benefits of share certificates in Turkey should be taken into consideration, especially when transfering company shares at high values. For more detailed information about certificates and benefit from our services, feel free to contact us. With over 25 years of expertise, knowledge, and experience, we are here to help you. Additionally, you can explore the books of our Founder, Dr. Soner Altaş, in the field of Commercial Law, or take a closer look at Tacirsoft Legal Information System — Turkey’s first and only legal database dedicated to Turkish Corporate Law and Organized Industrial Zones Law.
