Commercial Agent Claims Portfolio Compensation in Turkey: When Is the Principal Liable? (2026 Updated Guide)

When can a commercial agent claim portfolio compensation in Turkey? Learn the conditions for goodwill indemnity, termination risks, calculation, contractual exclusions and defenses available to foreign principals.

A commercial agency relationship may create significant financial exposure for a foreign company when the relationship ends in Turkey. One of the most important risks is the commercial agent’s claim for portfolio compensation, also commonly described as goodwill indemnity. The basic rationale is that an agent may spend years developing customers and expanding the principal’s market, while the principal continues benefiting from those customer relationships after termination. Under Turkish commercial law, however, portfolio compensation is not automatically payable whenever an agency agreement ends. Whether the principal becomes liable depends on the circumstances of termination, the customers introduced or substantially developed by the agent, the continuing benefit obtained by the principal, the commissions lost by the agent and whether payment would be equitable.

For foreign manufacturers, exporters and international companies operating through Turkish commercial agents, the issue should therefore be examined before termination rather than after the agent submits a substantial compensation demand.

What Is Portfolio Compensation in Turkey?

Portfolio compensation is a post-termination claim associated with the commercial value created by the agent for the principal. In essence, an agent may seek compensation where the agent has introduced new customers or significantly expanded business with existing customers and the principal continues obtaining substantial benefits from that customer portfolio after termination.

It is distinct from ordinary unpaid commission, contractual damages or compensation for wrongful termination.

What Is the Main Legal Basis?

The principal framework is found in Article 122 of the Turkish Commercial Code. The provision establishes conditions under which an agent may request compensation after termination of the agency relationship.

The existence of an agency contract alone is therefore insufficient. The statutory conditions must be examined in the circumstances of the particular relationship.

When Can the Principal Become Liable?

Three substantive elements are particularly important. The principal must continue obtaining significant benefits from customers introduced by the agent; because of termination, the agent must lose commission that it would otherwise have received from transactions with those customers; and payment of compensation must be equitable considering the circumstances.

These requirements should be evaluated together.

Did the Agent Bring New Customers?

The agent should identify customers allegedly introduced into the principal’s commercial portfolio.

A customer that had already been doing business with the principal before appointment of the agent may require a different analysis from a genuinely new customer obtained through the agent’s activities.

Historical sales records can therefore become crucial.

Existing Customers Can Also Matter

The analysis is not necessarily limited to completely new customers. Where the agent has substantially increased the volume of business with existing customers, that development may also become relevant.

The parties should compare sales before and during the agency relationship.

The Principal Must Continue Receiving Significant Benefits

Portfolio compensation is closely connected with post-termination benefit.

If customers developed by the agent continue purchasing products from the principal after the agency relationship ends, this can support the agent’s claim. Conversely, if those customers disappear, stop buying or follow the agent to another supplier, the continuing-benefit element may be disputed.

Post-Termination Sales Evidence Is Important

Foreign principals should preserve sales data after termination. Customer-by-customer information can help determine whether the alleged portfolio actually continued generating business.

A claim should not be evaluated merely from the total sales achieved during the agency period.

The Agent’s Lost Commission Must Be Examined

Another important issue is the commission the agent loses because the agreement has ended.

The analysis should focus on transactions involving the relevant customers and the commissions that would have been earned if the relationship had continued under the applicable conditions.

Portfolio Compensation Is Not the Same as Future Commission Forever

An agent cannot simply calculate all hypothetical commissions that might have been earned indefinitely and demand that amount as portfolio compensation.

The statutory framework contains specific conditions and a compensation ceiling.

What Is the Maximum Amount?

Under the Turkish Commercial Code, portfolio compensation cannot exceed an amount equivalent to the agent’s average annual remuneration calculated from commissions and other payments received as a result of the agency relationship during the preceding five years.

If the relationship lasted less than five years, the average for the actual duration of the relationship is considered.

This is a statutory ceiling rather than an automatic compensation amount.

The Maximum Is Not Automatically Awarded

A frequent mistake is to assume that the agent is automatically entitled to one year’s average commission.

The ceiling determines the maximum potential compensation. The actual amount must still be evaluated according to the statutory conditions and equity.

Equity Is a Central Requirement

The circumstances of the relationship matter. The parties’ contributions, development of the customer base, brand strength, advertising, market conditions, exclusivity, duration of the relationship and reasons for termination may all become relevant to an equitable assessment.

A Famous Brand Can Affect the Analysis

Where customers primarily purchase because of the principal’s internationally established brand rather than the agent’s individual efforts, the principal may argue that customer acquisition cannot be attributed entirely to the agent.

This does not automatically eliminate the claim, but it can be relevant to the factual analysis.

Marketing Investment Should Be Documented

If the foreign principal funded advertising, trade fairs, digital campaigns, discounts, local personnel or customer-acquisition programs, preserve those records.

Portfolio development may have resulted from combined efforts rather than solely from the agent’s activities.

Why the Agency Agreement Ended Matters

The reason for termination can significantly affect entitlement.

The principal should therefore preserve termination notices, warnings, correspondence, performance records and evidence concerning contractual breaches.

What If the Principal Terminates the Agreement?

Termination by the principal does not automatically create portfolio compensation, but the statutory conditions should be evaluated carefully.

If the principal terminates without conduct attributable to the agent that legally defeats the claim, portfolio compensation exposure may arise.

What If the Agent Seriously Breached the Agreement?

Where the principal terminates because of conduct attributable to the agent that justifies termination, the agent’s entitlement may be affected under the statutory framework.

The principal should be able to prove the alleged breach rather than relying on a general allegation of poor performance.

What If the Agent Terminates the Agreement?

Where the agent terminates the relationship voluntarily, portfolio compensation may generally be restricted, subject to statutory circumstances such as reasons attributable to the principal or circumstances where continuation cannot reasonably be expected because of the agent’s age, illness or disability.

The exact reason for termination should therefore be documented.

Mutual Termination Requires Careful Drafting

Where the parties end the relationship by agreement, the settlement document should address commissions, receivables, customer accounts, inventory, confidential information and potential post-termination claims clearly.

A short document merely stating that the agreement has ended may leave important disputes unresolved.

Can Portfolio Compensation Be Waived in Advance?

Turkish law places restrictions on advance waiver of portfolio compensation. Foreign principals should therefore not assume that a clause stating “the agent shall never claim goodwill compensation” will necessarily eliminate statutory exposure.

The enforceability of any waiver should be reviewed in light of the mandatory statutory framework.

The Agent Must Observe the Claim Period

Article 122 provides a specific period for asserting the portfolio compensation claim after termination of the agency relationship.

For that reason, the termination date and date on which the claim was asserted should be documented carefully.

Commission Claims and Portfolio Compensation Are Different

An agent may simultaneously claim unpaid commissions and portfolio compensation.

These should be separated analytically. A principal may owe outstanding commission on completed transactions while having valid defenses against portfolio compensation, or the reverse.

Wrongful Termination Damages Are Also Separate

A dispute may include damages arising from allegedly unlawful termination in addition to portfolio compensation.

The company should therefore identify each head of claim rather than treating the agent’s entire demand as a single goodwill claim.

Is Exclusivity Required?

The actual structure of the agency relationship matters, but portfolio compensation should not be analyzed solely by asking whether the agreement uses the word “exclusive.”

The agent’s actual role in developing customers and the principal’s continuing benefit remain central.

Distributor or Agent?

This distinction can become highly important.

Foreign companies sometimes describe a Turkish counterparty as a “distributor” even though the actual contractual relationship contains characteristics associated with agency, or vice versa.

The legal characterization depends on the substance of the relationship rather than the contract title alone.

Can Distributors Claim Similar Compensation?

Turkish commercial law permits the portfolio-compensation provision to apply, subject to the statutory framework, to certain other continuing contractual relationships that create comparable rights, including some exclusive distribution relationships.

A foreign supplier should therefore not assume that avoiding the word “agent” automatically eliminates goodwill-compensation exposure.

Examine the Actual Commercial Relationship

Important questions include whether the intermediary buys and resells goods on its own account, acts on behalf of the principal, earns commission, bears inventory risk, negotiates contracts and has authority to conclude transactions.

The answer affects legal characterization.

Customer Ownership Clauses Are Not Conclusive

An agreement may state that all customers “belong” to the principal. Such language may be commercially useful, but it does not by itself resolve statutory portfolio-compensation requirements.

Actual customer development and post-termination benefit should still be analyzed.

Prepare a Customer-by-Customer Analysis

When a substantial claim is made, the principal should create a table identifying the customer, first transaction date, source of introduction, historical sales, agent’s involvement, commissions paid and post-termination purchases.

This is often more useful than arguing only about aggregate annual turnover.

Separate New Customers From Historical Customers

Identify customers already dealing with the principal before the agent was appointed.

The agent should not automatically receive credit for commercial relationships that existed independently.

Analyze Significant Expansion of Existing Accounts

For pre-existing customers, compare turnover before and after appointment of the agent.

If the agent substantially developed the account, that development may become relevant even though the customer itself was not new.

Determine Whether Customers Continued After Termination

Post-termination purchasing behavior is essential.

If customers continue placing substantial orders directly with the principal or through a replacement intermediary, the agent may rely on this as evidence of continuing benefit.

What If Customers Follow the Former Agent?

If important customers leave the principal and instead begin purchasing competing products through the former agent, the principal can examine whether it genuinely retained the alleged portfolio benefit.

Evidence should be collected rather than assumed.

Replacement Agents Can Affect the Evidence

Appointment of a new Turkish agent does not automatically eliminate the former agent’s claim.

If the new agent continues servicing customers originally developed by the former agent, the principal may still be receiving benefits from that customer portfolio.

Sales Forecasts Should Be Treated Carefully

Portfolio compensation should not be based solely on optimistic projections.

Historical purchasing patterns, customer retention, market developments and actual post-termination transactions can provide stronger evidence.

Currency Issues Can Become Significant

International agency agreements may calculate commissions in euros, dollars or another currency.

The parties should examine the contractual currency, payment history and legally applicable calculation methodology when quantifying claims.

Tax Treatment Should Be Considered Separately

The tax treatment of any settlement or compensation payment should be reviewed independently from whether portfolio compensation is legally owed.

Commercial settlement figures should not be agreed without considering their financial consequences.

Foreign Governing Law Clauses Require Careful Analysis

International agency contracts frequently choose foreign law.

However, where the agency relationship and market activity are connected with Turkey, the interaction between the governing-law clause, mandatory Turkish provisions and dispute-resolution mechanism should be examined carefully.

A foreign-law clause should not automatically be assumed to eliminate Turkish statutory protections.

Arbitration Clauses May Affect Where the Dispute Is Heard

Agency agreements frequently contain arbitration clauses.

Before commencing litigation, determine whether the dispute must be resolved before Turkish courts, foreign courts or an arbitral tribunal.

Evidence Should Be Preserved Before Termination

The best time to prepare for a portfolio-compensation dispute is before sending the termination notice.

Preserve sales reports, customer histories, commission statements, correspondence, marketing expenditure, performance records and contractual breaches.

Do Not Delete the Agent’s Access Without Preserving Data

Foreign principals sometimes immediately terminate CRM, email or sales-system access.

Before doing so, preserve company records concerning customer acquisition, sales activity and account history in compliance with applicable legal requirements.

Review the Agent’s Final Commission Statement

Identify commissions already accrued, transactions pending completion and orders placed before termination.

This helps separate ordinary commission disputes from portfolio compensation.

Consider Settlement Strategically

Where the statutory conditions appear substantially satisfied, negotiated resolution may sometimes be commercially preferable to prolonged litigation.

Any settlement should clearly identify which claims are being resolved.

2026 Risk Management for Foreign Principals

Foreign companies using Turkish agents should not wait for termination to evaluate portfolio-compensation exposure. Agency agreements should clearly regulate territory, products, customer reporting, commission calculation, performance expectations, termination procedures, confidentiality, post-termination cooperation and dispute resolution.

The company should also maintain customer-level sales records throughout the relationship.

Immediate Defense Strategy for the Principal

When a Turkish commercial agent claims portfolio compensation, the foreign principal should immediately review the agency agreement and termination reason, determine whether the claimant is legally an agent or another intermediary, identify customers introduced or developed by the claimant, measure post-termination benefits, calculate commissions allegedly lost, determine the statutory maximum, evaluate equity factors, separate portfolio compensation from unpaid commissions and damages, review the claim period and preserve all customer and sales evidence.

Frequently Asked Questions

Is every Turkish commercial agent entitled to portfolio compensation after termination?

No. The statutory conditions must be satisfied. Termination alone does not automatically create entitlement.

Does the agent have to bring completely new customers?

New customers are important, but substantial expansion of business with existing customers may also be relevant.

Must the principal continue benefiting from those customers?

Continuing significant benefit is one of the central elements of the claim.

Is compensation automatically equal to one year’s commission?

No. The statutory annual-average figure operates as a maximum ceiling. The actual entitlement and amount must still be established.

Can the agency agreement waive portfolio compensation in advance?

Advance waiver is restricted under Turkish law. A contractual exclusion should not automatically be assumed to be enforceable.

Can an agent claim portfolio compensation after resigning?

The reason for the agent’s termination is important. Certain circumstances may preserve entitlement, while an ordinary voluntary termination may affect the claim.

What if the principal terminates because the agent seriously breached the contract?

Conduct attributable to the agent that justifies termination may affect entitlement. The principal should preserve evidence establishing the breach.

Can an exclusive distributor make a similar claim?

Potentially. The statutory framework can extend beyond conventional agency relationships to certain comparable continuing commercial relationships.

Can the agent claim unpaid commissions as well?

Yes. Commission receivables and portfolio compensation are legally distinct claims and should be calculated separately.

What should a foreign principal do when receiving a compensation demand?

Do not calculate liability from total historical sales alone. Reconstruct the customer portfolio, determine which business was actually created or substantially developed by the agent, measure the principal’s continuing post-termination benefit, analyze lost commissions and termination circumstances, and then apply the statutory ceiling and equity assessment.

Client-Focused Legal Support for Commercial Agency Disputes in Turkey

Commercial agency termination can lead to substantial disputes concerning portfolio compensation, unpaid commissions, wrongful termination damages, customer ownership, exclusivity, distributor status and post-termination contractual obligations. Fırat Fesih Kaya Law Office assists foreign manufacturers, international companies and investors in Turkish commercial agency and distribution disputes. Lawyer Fırat Fesih Kaya provides legal assistance in evaluating portfolio-compensation claims, reviewing agency and distribution agreements, calculating potential exposure, preparing defenses against excessive claims, negotiating termination settlements and representing foreign principals in commercial litigation and dispute-resolution proceedings.

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+90 312 434 22 22

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+90 532 769 22 22

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