Turkey: digitalization in the practice of company law in Turkey

Introduction

In Turkey, digitalization in corporate law practice has increased significantly and gradually over the past few years. Provision of digital signature declarations via the central registration system (“MERSIS“), making notifications of foreign direct investment through the electronic system of incentive practices and foreign capital (“E-TUYS“) and receive electronic notifications from the social security body (“ISS“) are some of the recent examples and developments of this effort. In this article, we will assess these current developments and explain the important points that need to be considered for effectiveness.

II. Digital signature declarations

Signing declarations were issued through a visit to Turkish Notary Publics and/or Commercial Registries, prior to the novelties. The Law Amending the Law on Technological Development Zones and Certain Other Laws, numbered 7263 and published in the Official Gazette on February 3, 2021, amended Article 40/2 of the Turkish Commercial Code (“CCT“) by stipulating that the signatures of natural person traders and persons authorized to sign on behalf of legal person traders will be obtained electronically from the databases of public establishments and bodies and entered in the commercial register file under the Accordingly, the Communiqué amending the Communiqué relating to the signing of articles of association in the offices of the Commercial Registry when incorporating companies published in the Official Gazette on February 20, 2021 and specifying the provision of declarations of signature in an environment digital and listing other exceptional circumstances regarding acceptance of physical signature statements.

Digital signature declarations are now obtained from the database of the General Directorate of Civil Status and Nationality (“CRN“) before the application to the Commercial Register for registration purposes. Turkish citizens who are appointed directors or signatories of Turkish entities and who hold new Turkish ID cards are requested to give their approval for this appointment via MERSIS by logging into the system.If their digital signature declarations can be successfully obtained from the CRN, they will no longer be required to go to the commercial registers/notaries and submit a physical signature declaration. do not have a new type Turkish ID card (e.g. Turkish citizens with an old version of the Turkish ID card or foreign nationals) or whose digital signature samples cannot be obtained from the CRN due to technical obstacles are still required to submit a physical signature declaration to the commercial registers.

III. Foreign direct investment notifications via E-TUYS

The foreign investment regime under Turkish jurisdiction is mainly governed by the Foreign Direct Investment Law and the Implementing Regulations of the Foreign Direct Investment Law.

According to Article 5 of the Regulations on the Implementation of the Foreign Direct Investment Law, foreign-funded companies and branches shall submit the following information to the General Directorate of Incentive Practices and Foreign Capital (“Executive management“):

– Information regarding (i) “foreign investor”, (ii) “list of shareholders” and (iii) “subsidiaries” (if any) must be submitted within 1 (one) month from the registration of the authorized user with the Directorate.

– Information on the activities of the company must be submitted on an annual basis and every year until the end of May at the latest.

– Information relating to capital increase or reduction operations must be communicated within 1 (one) month of the completion of the capital increase/reduction.

– Information relating to payments made as a result of capital increase or share transfer operations must be communicated within one (1) month of the completion of the capital increase or transfer of shares. actions.

– Information relating to share transfer operations must also be transmitted within one (1) month of the completion of the share transfer.

In order to file notices of the foregoing, each foreign capital company must appoint a user on its behalf and that person must be registered with the Electronic Incentive Practices and Foreign Capital System (“E-TUYS“) first. For the nomination, the necessary documentation must be sent to the General Management by registered email (“KEP“) of the company. The user can be an authorized signatory of the company or a third party designated for this task. Once the appointment process is completed, E-TUYS notifications can be made by electronic signature of the ‘user.

IV. Receiving electronic notifications from the ISS

On September 24, 2021, the regulation on electronic notification by the social security body (“Regulation“) has been published in the Official Journal numbered 31608. The purpose of these regulations is to determine the procedures and principles concerning the notification processes to be carried out in an electronic environment by the ISS. Accordingly, the ISS has published a circular no. 2021/38 (“Circular“) on November 10, 2021 and included detailed explanations regarding the implementation of the settlement.

Pursuant to the Regulations and the Circular, those responsible for obtaining an electronic notification address are the following: (i) corporate employers who have begun to employ persons deemed insured (those employed by one or more employers with an employment contract) before October 1 October 2021 and continued to employ insured persons after October 1, 2021 and (ii) legal entity employers who began to employ persons deemed insured for the first time after October 1, 2021. In accordance with Following the SSI announcement dated December 11, 2021, employers meeting the above criteria should obtain their email notification addresses until January 31, 2022.

In accordance with the circular, the request for an electronic notification address can only be made through the eGovernment Gateway account of a person who has been registered with the commercial register and MERSIS as an authorized signatory or the registration register of the SSI workplace.

However, it should be noted that foreign nationals cannot log into the e-Government gateway portal. Therefore, employers whose officials/signing officers are all foreign nationals are technically unable to obtain an email notification address. Therefore, these companies will continue to physically receive SSI notifications until new methods are made available.

Since e-Government Gateway portal is available only for Turkish citizens and e-Government Gateway portal content and SSI notifications are only in Turkish language, it would be effective to authorize a Turkish person to receive the notifications in digital form. environment.

V. Conclusion

The requirements of Turkish company law generally require the execution of a large number of documents. With the help of digitization, it is ultimately planned and expected to reduce the volume of documentation as much as possible and to complete the many legal steps in an online environment. The preceding developments are suitable examples for these purposes. Digitization also makes a great contribution to time efficiency and process security, and it reduces the risk of falsified documentation. The adaptation to digitization in Turkish company law is systematically supported by regulatory novelties. It is expected that many other business processes (e.g. company incorporation, commercial registration applications, issuance of powers of attorney, etc.) can be handled easily and quickly by online without requiring physical documentation in the near future. Once digital systems are made available to foreign nationals who also have English language preference, more companies, foreign investors and individuals will be able to use these systems.

(First published by Mondaq on April 11, 2022)

Jon J. Epps