Turkish Company Partners Disagree Over Share Valuation: How Can a Foreign Investor Obtain a Fair Price? 2026 Updated Guide

Turkish company partners disagree over the value of shares. Learn how foreign investors can challenge an unfair valuation, obtain financial evidence, use independent experts and protect their exit price in Turkey.

A disagreement over share valuation can become one of the most financially significant disputes between a foreign investor and their Turkish business partners. The conflict commonly arises when one shareholder wants to exit, partners negotiate a buyout, a shareholder is removed from a limited liability company, a deadlock makes continued cooperation impossible, or one side alleges that the company’s true value has been deliberately understated. Turkish company law does not provide a single valuation formula applicable to every shareholder dispute. The correct method depends on the company type, articles of association, shareholders’ agreement, reason for the valuation, contractual exit mechanism, financial position of the business and legal remedy being pursued. Under the Turkish Commercial Code, certain limited-company exit situations expressly refer to the departing shareholder’s entitlement based on the real value of the capital share.

Why Do Share Valuation Disputes Arise?

The majority shareholder may offer a price based only on nominal capital while the foreign investor believes the company has substantial accumulated value. Another dispute may concern whether real estate, intellectual property, customer relationships, undistributed profits, related-party transactions or future earnings should be reflected.

The first mistake is therefore treating the nominal value printed in corporate documents as automatically representing the economic value of the investment.

Nominal Share Value and Real Economic Value Are Different

A company may have relatively low registered capital while owning valuable real estate, machinery, brands, licenses, contracts or a profitable operating business.

Conversely, substantial registered capital does not necessarily mean that the shares have equivalent market value if the company has accumulated losses or significant liabilities.

A valuation should therefore begin with the company’s actual economic position.

First Determine Why the Shares Are Being Valued

The legal context can materially affect the analysis. A valuation may arise from a voluntary share sale, contractual call or put option, shareholder exit, exclusion, company dissolution dispute, merger, restructuring, inheritance or another corporate event.

The applicable valuation date and methodology may therefore differ from case to case.

Review the Articles of Association

Before commissioning a valuation report, review the company’s articles carefully.

They may contain provisions concerning share transfers, exit rights, transfer restrictions, approval mechanisms or other arrangements affecting how a shareholder can leave the company.

Review the Shareholders’ Agreement

Foreign investors frequently enter Turkey through a shareholders’ agreement containing sophisticated exit provisions.

Check for:

• put and call options,
• valuation formulas,
• independent expert mechanisms,
• deadlock provisions,
• drag-along and tag-along rights,
• good-leaver and bad-leaver provisions,
• discounts,
• payment terms,
• governing law and
• dispute-resolution clauses.

The contractual valuation mechanism can be central to the dispute.

Do Not Accept a Valuation Based Only on Book Value

Book value can be relevant, but it is not automatically synonymous with fair economic value.

A profitable operating company may have substantial goodwill and earning capacity not fully reflected in historical accounting figures.

Asset-Based Valuation May Be Relevant

For asset-heavy businesses, valuation may focus substantially on the company’s underlying assets and liabilities.

This can be particularly important for companies owning factories, warehouses, commercial real estate, machinery or investment properties.

Real Estate Should Be Reviewed at Current Value

Historical acquisition cost may differ dramatically from current economic value.

If the company owns valuable land or buildings, independent real-estate appraisal may be necessary before accepting a share valuation.

Machinery and Equipment Can Also Be Understated

Industrial businesses may hold machinery recorded at depreciated accounting values even though the equipment remains economically valuable.

The company’s operational assets should therefore be reviewed separately where material.

Intellectual Property Can Be Valuable

Brands, trademarks, software, patents, domain names, licenses and proprietary technology may represent substantial company value.

A valuation that ignores material intellectual property may significantly understate the foreign investor’s economic interest.

Customer Relationships and Goodwill Matter

Established businesses may possess significant commercial value through long-term customers, distribution networks, reputation and recurring revenue.

These elements can be relevant particularly where an income-based or market-based valuation methodology is appropriate.

Income-Based Valuation May Be Necessary

For an operating business, valuation may consider the company’s expected future economic performance.

Discounted cash-flow analysis can be relevant in suitable cases, but its reliability depends heavily on assumptions concerning revenue growth, margins, investment requirements and discount rates.

Forecast Manipulation Must Be Examined

A shareholder controlling management may attempt to justify a low valuation using unusually pessimistic forecasts.

Compare projections with historical performance, approved budgets, customer contracts, management presentations and actual post-valuation results where legally relevant.

EBITDA Multiples May Be Used in Negotiations

Market-multiple approaches can also be relevant, particularly where comparable businesses or transactions exist.

However, selecting inappropriate comparables or applying an unjustified discount can materially distort the result.

There Is No Universal Multiple

A company cannot simply be valued at “five times EBITDA” or another arbitrary figure without considering its sector, growth, profitability, debt, size, customer concentration and market conditions.

The methodology must fit the particular company.

Hidden Liabilities Must Also Be Included

A fair valuation protects both sides.

Tax exposure, litigation, customs liabilities, employee claims, guarantees, environmental obligations and other liabilities can reduce equity value where they genuinely exist.

But Artificial Liabilities Should Be Challenged

Foreign investors should investigate suspicious liabilities appearing shortly before the valuation date.

Related-party loans, unexplained management fees or questionable provisions can potentially depress the company’s apparent value.

Related-Party Transactions Require Close Examination

A controlling shareholder may shift economic value away from the company through related entities.

Examine management fees, leases, consulting arrangements, loans, purchases, sales and transfers involving shareholders or affiliated companies.

Excessive Shareholder Salaries Can Affect Valuation

If controlling shareholders extract unusually high salaries or benefits, reported profitability may understate the normalized earnings of the business.

A valuation expert may need to normalize such expenses.

Personal Expenses Paid by the Company Should Be Identified

Vehicles, travel, housing or other personal expenses recorded as corporate costs may distort profitability.

Accounting records should be reviewed to distinguish genuine business expenses from shareholder benefits.

Undistributed Profits Must Be Examined

A company may have accumulated substantial earnings without distributing dividends.

Foreign investors should review retained earnings, cash reserves and how those funds have been used.

Cash Can Disappear Before the Valuation Date

Unusual transfers immediately before a shareholder exit can materially affect value.

Bank statements should therefore be examined where there are concerns about asset diversion.

Inventory Must Be Verified

For trading and manufacturing businesses, inventory can represent a substantial part of enterprise value.

Check whether inventory is genuine, saleable and correctly valued.

Receivables Require Quality Analysis

A balance sheet may show large trade receivables that are difficult to collect.

A fair valuation should distinguish recoverable receivables from doubtful or effectively worthless accounts.

Debt Must Be Verified

Net debt can significantly affect equity value.

Bank loans, shareholder loans, financial leasing obligations and other indebtedness should be reconciled with supporting records.

Foreign-Currency Debt Can Be Important

Where the company has substantial foreign-currency liabilities, the valuation date can materially affect equity value.

Exchange-rate assumptions should therefore be transparent.

Which Valuation Date Should Be Used?

The correct valuation date depends on the legal and contractual basis of the dispute.

Parties should not casually select whichever date produces the most favorable number.

Limited Company Exit Rights Are Particularly Important

For Turkish limited liability companies, Article 641 of the Turkish Commercial Code states that a shareholder leaving the company is entitled to an exit payment corresponding to the real value of the capital share.

This makes the determination of real value a central legal issue in many limited-company shareholder disputes.

Exit for Just Cause May Lead to Court Proceedings

The Turkish Commercial Code also permits a limited-company shareholder to seek judicial exit where just cause exists. The court may adopt measures concerning the shareholder’s rights and obligations while the proceedings continue.

The valuation dispute can therefore become part of broader shareholder litigation.

Dissolution Litigation Can Produce Alternative Remedies

In certain limited-company disputes involving just cause, the court may choose an appropriate alternative rather than dissolution, including payment of the claimant shareholder’s real share value and removal from the company.

For a foreign investor, this can make valuation evidence decisive.

Independent Expert Valuation Can Be Critical

Where partners cannot agree, an independent valuation report can provide an objective starting point.

The expert should understand both corporate finance and the characteristics of the particular industry.

One Expert Report May Not Be Enough

If the opposing shareholder has commissioned a valuation, review its assumptions rather than merely comparing the final numbers.

Two valuations can differ dramatically because of different forecasts, discount rates, comparable companies, normalized EBITDA or treatment of assets.

Ask for the Calculation Model

A valuation report should allow the reader to understand how the final figure was reached.

Foreign investors should examine assumptions, adjustments and source data rather than focusing solely on the headline valuation.

Access to Company Information Is Essential

A shareholder cannot evaluate a buyout offer intelligently without adequate financial information.

Relevant materials may include financial statements, ledgers, bank statements, tax records, customer contracts, loan agreements, related-party records, fixed-asset registers and management reports, depending on the dispute and available shareholder rights.

Preserve Evidence Before Relations Collapse Completely

When a shareholder dispute begins, corporate access can deteriorate rapidly.

Foreign investors should lawfully preserve documents already available to them and formally request necessary information rather than waiting until negotiations have failed completely.

Do Not Remove Company Data Illegally

Evidence preservation should respect corporate confidentiality, data-protection rules and authorization boundaries.

A shareholder dispute does not automatically authorize unrestricted copying of confidential company systems.

Minority Discounts Can Become Controversial

One side may argue that a minority shareholding should receive a discount because it does not control the company.

Whether such a discount is legally or economically appropriate depends heavily on the valuation context. It should never be applied mechanically.

Lack-of-Marketability Discounts Also Require Scrutiny

Shares in a private Turkish company may be difficult to sell externally, but that fact does not automatically justify every proposed discount.

The purpose of the valuation and applicable legal standard matter.

Control Premiums Require Similar Care

A controlling stake can have economic characteristics different from a small minority investment.

Any proposed control premium should be supported rather than simply asserted.

Shareholder Misconduct Should Not Be Hidden Inside the Valuation

If the real dispute concerns diversion of company assets, unauthorized transactions or breach of management duties, simply reducing the share price may not adequately address the problem.

Separate corporate claims may need to be considered.

Emergency Measures May Be Necessary

If there is evidence that company assets are being transferred while the valuation dispute is pending, available interim legal measures should be assessed promptly.

The objective may be to preserve the economic value of the company until the dispute is resolved.

Foreign Investors Should Review Payment Security

Obtaining a fair valuation is only half the problem.

If the shares are sold in installments, the investor should evaluate bank guarantees, escrow arrangements, pledges, acceleration clauses, default interest and other payment-security mechanisms.

Do Not Transfer Shares Before Payment Protection Is Clear

A foreign investor can lose substantial leverage if ownership is transferred before the purchase price is adequately secured.

Closing mechanics should therefore be coordinated with payment.

Tax Consequences Should Be Considered

A negotiated share price can have tax consequences for the parties.

The transaction structure should therefore be reviewed from both corporate and tax perspectives before execution.

Currency of the Purchase Price Matters

Foreign investors may negotiate valuations in foreign currency while Turkish corporate records operate in Turkish lira.

The agreement should address exchange rates, payment currency, conversion dates and currency-risk allocation clearly.

Dispute Resolution Clauses Must Be Checked

A shareholders’ agreement may contain arbitration, Turkish court jurisdiction or foreign-law provisions.

Before initiating proceedings, determine which forum has jurisdiction over the valuation and related shareholder claims.

Settlement Can Use a Valuation Range

Not every dispute requires agreement on one theoretically perfect number.

Parties can sometimes resolve the conflict through valuation ranges combined with payment terms, earn-outs, escrow or other commercial mechanisms.

Earn-Outs Can Bridge Valuation Gaps

If one shareholder expects rapid growth while the buyer is skeptical, part of the price can potentially depend on future performance.

The earn-out formula must be drafted carefully to prevent the buyer from manipulating future results.

Independent Expert Mechanisms Can Prevent Litigation

A shareholders’ agreement can provide that valuation disagreements are referred to an independent accountant, investment bank or valuation specialist.

The agreement should specify whether the expert acts as an expert determiner or arbitrator and how the decision becomes binding.

2026 Corporate Documentation Matters

The Ministry of Trade’s current 2026 company-law materials continue to identify the Turkish Commercial Code as the principal statutory framework governing Turkish companies and company-register matters. Foreign investors should therefore analyze valuation disputes together with the company’s current articles, corporate records and contractual arrangements rather than relying solely on informal partner negotiations.

Practical Valuation Checklist for Foreign Investors

Before accepting a buyout price, the foreign investor should verify the valuation date, methodology, normalized earnings, cash, debt, real estate, machinery, intellectual property, related-party transactions, shareholder benefits, outstanding litigation, tax exposure, customer concentration, future forecasts and any proposed minority or marketability discount.

The investor should also compare the proposed price with the legal basis governing the exit.

Frequently Asked Questions

Can a Turkish partner force a foreign investor to sell at nominal share value?

Not automatically. The legal position depends on the company type, articles, contractual arrangements and mechanism through which the shareholder is leaving.

What does “real value” mean for a limited-company shareholder?

The Turkish Commercial Code expressly refers to an exit payment corresponding to the real value of the departing shareholder’s capital share. Determining that value requires consideration of the circumstances of the specific company and dispute.

Can the foreign investor request an independent valuation?

An independent valuation can be obtained privately, and expert valuation may also become important in litigation depending on the legal remedy pursued.

Should company real estate be included?

Where real estate belongs to the company and materially affects its economic value, it should be properly considered under the appropriate valuation methodology.

Can hidden liabilities reduce the share price?

Genuine liabilities can affect equity value. However, questionable provisions and related-party liabilities should be verified carefully.

What if the majority shareholder transferred assets to another company?

The transactions should be investigated separately. Potential corporate claims and protective measures may need to be considered in addition to valuation.

Can a minority discount automatically be deducted?

No universal rule makes every minority discount appropriate. Its relevance depends on the legal and valuation context.

Can the court determine the value?

In disputes where the applicable legal remedy requires determination of share value, expert examination and judicial assessment can become central.

What if the buyer agrees to the price but wants to pay over several years?

The foreign investor should consider appropriate payment security before transferring the shares.

What should a foreign investor do before accepting an offer?

Obtain the company’s complete financial picture, identify the legally relevant valuation standard and date, review related-party transactions and major assets, and have the proposed valuation independently tested before signing a binding share-transfer or exit agreement.

Client-Focused Legal Support for Share Valuation Disputes in Turkey

Fırat Fesih Kaya Law Office assists foreign shareholders and international investors in Turkish company disputes involving share valuation, shareholder exits, partner deadlocks, minority rights, related-party transactions, asset diversion, buyouts and share-transfer negotiations. Lawyer Fırat Fesih Kaya provides legal assistance in reviewing shareholders’ agreements and corporate records, coordinating independent valuation evidence, challenging undervalued buyout offers, protecting company assets during disputes and pursuing appropriate corporate litigation or negotiated exit strategies.

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