As known, with the Presidential Decree dated 24 November 2023 and numbered 7887 which was published in the Official Gazette on 25 November 2023, i) the minimum principal capital requirement of TRY 50,000.00 for joint stock companies (“JSC”) was increased to TRY 250,000.00, ii) the minimum registered capital of TRY 100,000.00 was increased to TRY 500,000.00 for the non-public JSCs, iii) the minimum capital of TRY 10,000.00 was increased to TRY 50,000.00 for limited liability companies (“LLC”) (altogether “increased minimum capital amounts”).

Pursuant to the Circular on minimum capital numbered E-50035491-433.99-00092124772 (“Circular“) of the General Directorate of Domestic Trade of the Ministry of Trade, the following matters should be taken into consideration in the transactions to be carried out at the trade registry directorates as of 1 January 2024:

1. The minimum capital amount for the companies to be newly established shall not be less than TRY 250,000.00 for JSCs and than TRY 50,000.00 TL for LLCs,
2. In the registration of capital increase decisions, the capital shall not be less than the increased minimum capital amounts,
3. In the event of a capital reduction in partial de-merger registration, the capital of the de-merged company shall not fall below the increased minimum capital amounts,
4. In the registration of change of corporate form, the capital of the new corporate form shall not be less than the increased minimum capital amounts,
5. In the calculations to be made regarding the loss of the company’s capital and legal reserves within the scope of Article 376 of the Turkish Commercial Code (“TCC”), the registered capital of the company shall be taken as a basis; whereas in cases where measures are required to be taken, action shall be taken within the framework of the explanations given in this Circular,
6. The capital increase registration requests of the companies that are deemed to have been dissolved due to the failure to make capital adjustments as per Article 20 of the Law on the Enforcement and Implementation of the TCC and Provisional Article 10 of the Turkish Commercial Code, shall not be met unless there is an explicit court ruling allowing the capital increase, if they wish to continue their activities.

Therefore, in the company establishment, capital increase, conversion of corporate form, de-merger transactions, in the measures to be taken within the scope of Article 376 of the TCC to be carried out at the trade registry directorates, increased minimum capital amounts shall be taken into consideration, and the registered capital amount shall be considered in calculations to be made within the scope of Article 376 of the TCC.

Although the Circular regulates that the increased minimum capital amounts shall be taken into account in the above transactions to be carried out at the trade registry directorates for the established companies, the transition of the minimum capital amounts for currently established companies to the increased amounts has not yet been clarified. Therefore, a regulation is anticipated to be made on this matter.