Nominee Shareholder in Turkey

1. Draft a Strong Nominee Agreement

A well-documented contract is crucial to prevent disputes. It should include:
✅ Explicit Declaration of Trust (even though Turkey doesn’t fully recognize trusts, this strengthens your claim).
✅ Clear Terms – Nominee acts only as per your instructions.
✅ Irrevocable Power of Attorney (PoA) – Lets you control company decisions without nominee interference.
✅ Right to Reclaim Shares – You can demand transfer at any time.
✅ Penalties for Breach – Financial consequences if nominee acts against the agreement.

Recommendation: Have the agreement notarized and, if possible, drafted in both Turkish and English for enforceability.

2. Secure Share Certificates & Control Mechanisms

• Physical Custody – Keep original share certificates with you or a trusted escrow agent (lawyer/bank).

• Bank Mandate Control – Ensure you (not the nominee) have sole signing authority on company accounts.

• Corporate Resolutions – Require your approval for major decisions (e.g., selling shares, taking loans).

3. Comply with UBO (Ultimate Beneficial Owner) Reporting

• Turkish banks and regulators increasingly demand UBO disclosure.

• Solution: Disclose your ownership confidentially where legally required, but limit public exposure.

• Workaround: Use a holding company (in a privacy-friendly jurisdiction) as the shareholder instead of an individual nominee.

4. Choose a Reputable Nominee

• Avoid random individuals – Use a licensed corporate service provider or law firm.

• Background Checks – Verify nominee’s reputation (past disputes, financial stability).

• Professional Nominees – Some Turkish consultancies offer insured nominee services (reduces fraud risk).

5. Monitor & Maintain Control

• Regular Audits – Check company records to ensure nominee hasn’t made unauthorized changes.

• Annual Compliance Reviews – Update agreements as Turkish laws evolve.

• Digital Access – Insist on online access to company filings in the Trade Registry.

6. Prepare an Exit Strategy

• Pre-Signed Share Transfer Forms – Keep notarized documents to reclaim shares quickly.

• Escrow Release Conditions – Define triggers (e.g., contract breach) for automatic share return.

• Backup Nominee – Have a substitute nominee in case the primary one becomes uncooperative.

7. Tax & Legal Compliance

• Declare Beneficial Ownership where required (prevents tax evasion accusations).

• Pay Taxes Properly – Nominee structures do not exempt you from Turkish taxes on dividends or capital gains.

• Consult a Turkish Tax Advisor – Ensure compliance with CFC (Controlled Foreign Company) rules if using offshore holdings.

When to Avoid Nominee Shareholders?

❌ If you need bank financing (many Turkish banks reject nominee-held companies).
❌ If the nominee is not 100% trustworthy.
❌ If the goal is tax evasion (high risk of penalties).

Alternatives to Nominees

• Holding Company Structure – More secure than individual nominees.

• Proxy Directors – Hides management (but not ownership).

• Bearer Shares – Rare and risky due to transparency laws.