Can a foreign investor’s company shares be frozen during a Turkish criminal investigation? Learn when company shares may be seized, what evidence is required, whether the company can continue operating, and how foreign shareholders can challenge an asset restriction.

Yes. A foreign investor’s shares in a Turkish company can potentially become subject to a seizure or asset restriction during a criminal investigation.

However, the fact that a prosecutor is investigating a foreign shareholder does not automatically authorize unrestricted interference with the investor’s company shares.

Under Article 128 of the Turkish Criminal Procedure Code, company shares owned by a suspect or defendant are expressly among the assets that may be seized when the statutory requirements are satisfied. The provision requires strong suspicion based on concrete evidence concerning both the commission of a qualifying offence and the connection between the relevant assets and proceeds derived from that offence.

For foreign investors, the critical questions are therefore:

• What offence is being investigated?
• Who owns the shares?
• Is the shareholder a suspect?
• What evidence allegedly connects the shares with criminal proceeds?
• Which authority ordered the restriction?
• Does the measure cover only the shares or the entire company?
• Can the seizure be challenged?

Can Company Shares Be Seized Under Turkish Criminal Procedure?

Yes.

Article 128 of the Criminal Procedure Code expressly includes a suspect’s or defendant’s shares in a company in which that person is a shareholder among the assets potentially subject to seizure.

The same provision also covers assets including:

• Real estate;
• Vehicles;
• Bank accounts;
• Rights and receivables;
• Negotiable instruments;
• Safe-deposit-box contents;
• Other property.

Company shares are therefore not immune from criminal protective measures merely because they represent an investment in a legal entity.

Does Foreign Nationality Prevent Share Seizure?

No.

The decisive issue is not whether the shareholder is Turkish or foreign.

A foreign investor holding shares in a Turkish company can potentially be affected by Turkish criminal-procedure measures where the statutory requirements are satisfied.

Foreign ownership does not itself create immunity from an asset seizure.

Equally, however, foreign nationality is not itself evidence that the shares are connected with criminal activity.

Can a Prosecutor Simply Freeze Shares Whenever an Investigation Begins?

No.

Opening a criminal investigation does not automatically satisfy the requirements for seizure under Article 128.

The statutory framework requires strong suspicion based on concrete evidence concerning the relevant offence and the criminal origin of the assets.

Accordingly:

Investigation exists

does not automatically mean:

Company shares can be frozen.

The legal requirements for the protective measure must separately be satisfied.

Is the Prosecutor’s Request the Same as the Seizure Decision?

Not necessarily.

This distinction is important.

In practice, prosecutors can seek protective measures during an investigation, but the investor should obtain and examine the actual legal decision underlying the restriction.

The file should establish:

• Who requested the measure;
• Who ordered it;
• Date of the decision;
• Statutory basis;
• Shares covered;
• Alleged offence;
• Reasoning supporting the measure.

Foreign investors should therefore avoid relying only on statements such as:

“The prosecutor froze my company.”

The actual procedural decision must be examined.

What Must Be Proven Before Shares Can Be Seized?

Article 128 establishes significant evidentiary requirements.

There must be concrete evidence supporting strong suspicion concerning both the offence under investigation and the relationship between the property and criminal proceeds.

This second component can become particularly important.

An investor may be suspected of an offence while shares purchased years earlier with legitimate money have no demonstrated relationship with alleged criminal proceeds.

The two issues should not automatically be treated as identical.

What If the Investor Is Suspected of a Crime but the Shares Are Legitimate?

This can provide an important basis for challenging the measure.

Constitutional Court materials include a case in which an asset seizure was lifted after financial analysis failed to establish concrete findings demonstrating that the relevant property had been obtained through the alleged criminal activity.

The underlying court distinguished suspicion concerning the offence from the separate requirement concerning the criminal origin of the assets.

This distinction can be crucial for foreign investors.

For example:

Allegation: Fraud committed in 2025.

Shares: Purchased in 2018 using documented employment and business income.

The investor may seek to demonstrate that the shares cannot reasonably be treated as proceeds of the later alleged offence.

How Can a Foreign Investor Prove the Legitimate Origin of Company Shares?

A complete acquisition history should be prepared.

Useful evidence can include:

• Share purchase agreement;
• Company incorporation documents;
• Capital contribution records;
• Share certificates;
• Share ledger;
• Commercial registry documents;
• Bank statements;
• SWIFT records;
• Tax declarations;
• Dividend records;
• Historical financial statements.

The investor should establish:

Source of money → payment → acquisition of shares → continued ownership.

What If the Shares Were Acquired Through a Capital Increase?

The investor should preserve:

• Shareholder resolutions;
• Capital increase documents;
• Banking records;
• Commercial registry documents;
• Accounting records;
• Evidence concerning the source of invested capital.

This can help establish when and how the investor acquired the shares.

What If the Investor Bought the Company From Someone Else?

The share acquisition file becomes particularly important.

Evidence may include:

• Share purchase agreement;
• Closing documents;
• Previous shareholder information;
• Purchase-price payment;
• Bank statements;
• Corporate resolutions;
• Share ledger records;
• Commercial registry documentation.

The objective is to demonstrate a genuine acquisition rather than a transaction designed to conceal ownership.

Can Authorities Question a Recent Share Transfer?

Yes.

A share transfer made shortly before or during a criminal investigation can receive close scrutiny if authorities suspect that the transfer was intended to hide assets or prevent enforcement.

The Constitutional Court has examined a case involving allegations that company shares had been transferred through a simulated transaction. It concluded, on the particular facts, that the authorities’ assessment of the share transfer was not arbitrary and found no violation of the right to property.

Accordingly, timing and commercial reality can matter considerably.

Is Transferring Shares to a Relative Before Seizure Safe?

Not necessarily.

A transfer to:

• Spouse;
• Child;
• Parent;
• Business partner;
• Related company;
• Trust-like structure;
• Nominee;

may receive additional scrutiny if authorities believe that beneficial ownership did not genuinely change.

A formal transfer does not necessarily prevent authorities from investigating whether the transaction was genuine.

Can Shares Held by Another Person Still Become Relevant?

Potentially.

Article 128 expressly contemplates seizure of identified assets even where qualifying property is in another person’s possession.

However, third-party ownership and good faith can create important factual and legal questions.

The investor should be able to prove genuine ownership, acquisition date, purchase price and source of funds.

Does Freezing a Share Mean the Company Is Seized?

Not necessarily.

This distinction is extremely important.

Seizure of a shareholder’s shares and appointment of a trustee to company management are legally different protective measures.

Constitutional Court materials expressly distinguish seizure of a person’s company shares under Article 128 from the separate company-management mechanism under Article 133.

Therefore:

Share seizure ≠ automatic seizure of the entire company.

Can the Company Continue Operating?

Potentially, yes.

A restriction on one shareholder’s shares does not automatically mean that the company must cease business.

Depending on the measure, the company may continue:

• Employing staff;
• Selling goods;
• Providing services;
• Entering contracts;
• Paying taxes;
• Operating bank accounts;
• Conducting ordinary business.

However, the exact effect depends on the wording and scope of the decision.

Can the Shareholder Sell Frozen Shares?

A valid seizure measure can restrict the shareholder’s ability to dispose of the affected shares.

Attempting to circumvent the measure through an artificial sale, transfer or nominee arrangement can create additional legal problems.

Once a restriction exists, any proposed share transaction should be reviewed carefully.

Can the Investor Transfer the Shares to Another Foreign Company?

Not as a method of defeating an existing seizure.

A legitimate corporate restructuring and an attempt to frustrate a criminal protective measure are fundamentally different situations.

Investors should avoid:

• Backdated share transfers;
• Artificial nominee structures;
• False purchase agreements;
• Secret beneficial ownership arrangements;
• Fictitious shareholder loans;
• Altered corporate records.

Can Dividends Also Be Affected?

Potentially.

The investor should examine whether the decision concerns only ownership and transfer of the shares or extends to associated rights, receivables or other assets.

Dividend entitlements can create separate questions depending on the wording and legal scope of the measure.

Can Voting Rights Be Affected?

This requires examination of the particular measure.

Seizure of shares should not automatically be assumed to have exactly the same legal consequences as appointment of a trustee or transfer of company management.

The decision must therefore be reviewed to determine how:

• Voting;
• General meetings;
• Dividend rights;
• Transfer rights;
• Management powers;

are affected.

Can a Trustee Be Appointed to the Company?

Potentially, but this is a separate and more extensive mechanism.

Turkish criminal procedure contains provisions permitting appointment of a trustee to company management under specified conditions.

Constitutional Court materials emphasize that trustee appointment affects the company as a whole, whereas Article 128 share seizure can target the individual shareholder’s ownership interest.

The legal conditions should therefore not be conflated.

Can the Shares of an Innocent Foreign Partner Be Frozen?

This requires careful analysis.

Suppose a Turkish company has three shareholders:

• Foreign Investor A — 60%
• Foreign Investor B — 20%
• Turkish Investor C — 20%

If the investigation concerns only Investor A, the legal basis for interfering with the separate property rights of Investors B and C must be examined independently.

A criminal investigation against one shareholder should not automatically be treated as proof that every other shareholder’s independently owned shares represent criminal proceeds.

What If the Foreign Investor Bought Shares in Good Faith?

Good faith can become especially important where the investor acquired shares from someone who later became the subject of a criminal investigation.

The investor should preserve:

• Due diligence records;
• Share purchase agreement;
• Independent valuation;
• Banking records;
• Commercial rationale;
• Corporate approvals;
• Evidence of actual payment;
• Post-acquisition company management records.

The investor may need to demonstrate that the transaction was a genuine commercial acquisition rather than a simulated transfer designed to conceal assets.

Can a Share Seizure Affect a Planned Company Sale?

Yes.

A seizure or transfer restriction can prevent or significantly complicate:

• Share sale;
• Merger;
• Acquisition;
• Corporate restructuring;
• Investor exit;
• Financing transaction.

If an M&A transaction is already pending, counterparties should carefully review closing conditions and contractual obligations.

Can It Affect Bank Financing?

Potentially.

A share seizure can affect:

• Share pledges;
• Financing covenants;
• Change-of-control provisions;
• Representations and warranties;
• Default clauses.

The company should immediately review major financing agreements if a significant shareholder’s shares become subject to criminal protective measures.

Can the Investor Challenge the Share Freeze?

Potentially, yes.

The available remedy depends on the exact decision and procedural stage.

Possible arguments can include:

• Statutory conditions are absent;
• No concrete evidence links the shares to criminal proceeds;
• Shares were acquired before the alleged offence;
• Purchase price came from legitimate sources;
• Investor is a good-faith third party;
• Share transfer was genuine;
• Measure is broader than necessary;
• Continued restriction is disproportionate.

The challenge should address the actual legal basis rather than merely asserting that the investor is foreign or commercially reputable.

Can Source-of-Funds Evidence Help?

Yes.

Source-of-funds documentation can be particularly powerful where the issue is whether the shares were acquired through criminal proceeds.

For example:

2019: Investor sells property abroad.

2020: Sale proceeds enter investor’s bank account.

2020: Investor transfers USD 1 million to Turkey.

2020: Investor purchases company shares.

2025: Criminal investigation begins concerning unrelated transactions.

The historical financial trail may help demonstrate that the shares pre-date and are economically independent from the alleged offence.

Does the Value of the Shares Matter?

Potentially.

If authorities seek to preserve assets allegedly representing criminal proceeds, the economic scope of the measure can become relevant to proportionality.

For example:

Alleged criminal proceeds: TRY 5 million.

Foreign investor’s company shares: TRY 150 million.

The relationship between the alleged proceeds and the assets restricted should be carefully examined.

Can the Restriction Continue for Years?

Protective measures can continue during criminal proceedings, but duration remains relevant.

A measure that was justified at the beginning of an investigation may require reassessment as the case develops.

Relevant questions include:

• Has new evidence emerged?
• Is there still a connection between the shares and alleged proceeds?
• Has a financial report been completed?
• Has the investigation narrowed?
• Does continued seizure remain necessary?

Does a Criminal Charge Automatically Justify Continued Share Seizure?

No automatic equation should be made between criminal accusation and criminal origin of property.

Constitutional Court materials demonstrate that courts must examine whether there are concrete findings linking the relevant assets with alleged criminal proceeds. In one case, the underlying court lifted the measure because such a connection could not be established despite suspicion regarding the alleged offence itself.

What Should a Foreign Investor Do Immediately?

Step 1 — Obtain the Decision

Determine exactly what has been restricted.

Step 2 — Identify the Authority

Establish who requested and who ordered the measure.

Step 3 — Identify the Alleged Offence

Article 128 is not a general unlimited asset-freezing mechanism.

Step 4 — Establish the Acquisition Date

Determine when the shares were acquired.

Step 5 — Reconstruct the Purchase

Collect the share purchase agreement and payment records.

Step 6 — Prove Source of Funds

Trace the money used to acquire the shares.

Step 7 — Review Company Operations

Determine whether management, banking or contracts are affected.

Step 8 — Review Financing Agreements

Check loan and shareholder agreements.

Step 9 — Preserve Corporate Records

Do not alter share ledgers, resolutions or historical documentation.

Step 10 — Examine the Available Challenge

Assess objection, lifting or modification procedures applicable to the particular decision.

What Should Investors Never Do?

A foreign shareholder facing a criminal asset restriction should never attempt to hide ownership.

Avoid:

• Backdating share transfers;
• Transferring shares secretly to relatives;
• Creating fictitious purchase agreements;
• Altering the share ledger;
• Destroying corporate documents;
• Moving assets through related companies to defeat the restriction;
• Concealing beneficial ownership.

Such actions can materially worsen the investor’s legal position.

Frequently Asked Questions

1. Can a foreigner’s company shares be frozen in Turkey?

Yes. Article 128 of the Turkish Criminal Procedure Code expressly includes shares held by a suspect or defendant in a company among assets potentially subject to seizure when the statutory requirements are satisfied.

2. Does being investigated automatically allow authorities to seize company shares?

No. The statutory evidentiary requirements for the protective measure must also be satisfied.

3. Can shares purchased before the alleged crime be frozen?

They may become subject to a measure, but the acquisition date and legitimate source of the purchase money can provide important grounds for challenging the alleged connection with criminal proceeds.

4. Does freezing shares mean the entire company has been seized?

No. Seizure of an individual shareholder’s shares under Article 128 is legally distinct from appointment of a trustee to company management.

5. Can the company continue doing business?

Potentially, yes. The effect depends on the exact scope of the decision.

6. Can the investor sell the shares while they are frozen?

A valid seizure can restrict disposal of the affected shares. Attempts to circumvent the measure can create additional legal risks.

7. Can an innocent foreign shareholder challenge a seizure?

Potentially. Genuine ownership, good faith, acquisition history and source-of-funds evidence can be highly relevant.

8. Can a court remove the seizure if there is no connection between the shares and the alleged offence?

Potentially. Constitutional Court materials include a case in which the underlying court removed an asset seizure because concrete findings connecting the assets with the alleged criminal activity were lacking.

9. Can a recent transfer of company shares be questioned?

Yes. Authorities may examine whether the transfer was genuine or designed to conceal assets. The Constitutional Court has addressed a case involving alleged simulated transfers of company shares.

10. What is the most important evidence for a foreign investor?

The strongest evidence will often be a complete historical chain demonstrating when the shares were acquired, how much was paid, where the purchase money originated and why the acquisition was a genuine commercial investment.

Client-Focused Legal Support for Frozen Company Shares in Turkey

A criminal investigation involving a foreign shareholder does not automatically mean that the investor’s company shares can be permanently or arbitrarily restricted.

The legal analysis should distinguish between the alleged offence, the origin of the shares, the investor’s source of funds, seizure of the individual shareholding and measures affecting the company itself.

Where shares were acquired through legitimate funds, particularly before the alleged criminal activity, historical banking and corporate evidence can become central to challenging the measure.

Fırat Fesih Kaya Law Office assists foreign investors, shareholders and foreign-owned companies with criminal asset measures, company-share seizures, financial investigations, source-of-funds disputes and challenges to restrictions affecting investments in Turkey.

Lawyer Fırat Fesih Kaya provides legal assistance in examining seizure decisions, reconstructing share-acquisition transactions, preparing source-of-funds evidence and protecting foreign shareholders’ property and corporate rights during Turkish investigations.

Phone: +90 312 434 22 22
Mobile: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No:221, Yıldırım Tower, Office No:148, 06520 Balgat, Çankaya, Ankara, Turkey

This article is intended for general information and does not constitute legal advice. The legality and scope of a company-share seizure depend on the alleged offence, ownership structure, source of funds, evidence in the investigation and the specific protective measure ordered in the individual case.