Changing Kind According to Turkish Legislation (from LLC to JSC)

In case a limited liability company (“LLC”) changes kind into joint stock company (“JSC”);

1- The transaction will not be subject to stamp duty and tax since the share transfer for JSC is determined as “transfer of the share”. In addition, notarization for such transaction is not mandatory.

2- In terms of income tax; in the event that an LCC changes kind into JSC and instantly issues “share certificate” or “interim certificate”, the acquisition dated of such share or interim certificate is deemed as the incorporation date of the LCC. Following 2 years of the acquisition, no income tax is applied. Thus, it is much healthier to issue share or interim certificate following changing kind rather than direct transfer of LCC shares. The LCC will be exempt from paying stamp duty, tax and income tax.

In accordance with the article 17/4-c of the VAT Law numbered 3065, the transfer and acquisition transactions, also changing kind, that are subject to Corporate Tax Law will not be subject to VAT.

In accordance with the Act of Fees, the new company, JSC, will not be paying any fee at the Land Registry office regarding the real estates that used to be owned by former company, LCC.

In line with the Article 1 of the Stamp Tax Law numbered 488, the documents executed arising from merger, acquisition and spin-off transactions performed within the Corporate Tax Law are exempt from stamp duty.

In conclusion, changing kind transaction can be executed within TRY 4.000-5.000 including, trade registry, and contribution and transaction fees.


Regulation Regarding Turkish Petroleum Law

This Regulation covers the terms and conditions regarding petroleum exploration and management license, duties, rights and liabilities concerning exploration warrant transactions, licensing and all other issues related to the application of the Law. This Regulation becomes effective as of its publication date December 11, 2013.

In accordance with the Regulation, the application is made on line by filling out the necessary forms and documents along with the deposition of the fees. The application is primarily evaluated upon the business and investment plan undertaken in the licensed area and the execution of such plan throughout the years. The applicant of its authorized representative may be called for interview if necessary.

The applicant who is granted the license shall submit damage warrant to the General Directorate within 15 days at the latest following the delivery.

It is deemed to waive from the application unless the warrant is submitted or submitted in the complete amount.

Search license is granted in two regions such as land and sea and the period is 5 for land and 8 for sea. Discovery notification is made to the General Directorate is manageable petroleum reservoir is found in the search well. The license period may be extended twice for 10 years of period in the event that production schedule is found eligible.

The ongoing petroleum transactions may be investigated on site at every stage of the production. The petroleum right owner or his contractor or facility responsible may not refrain from informing the authorities stating that such information is confidential.

Disputes that may arise shall be resolved in negotiation by the Ministry. Minister resolutions may be filed at the Council of State.

Previously granted licenses shall remain valid until the ending date of their period.


Trademark Infringement and Protection in Turkey

The Decree Regarding Protection of Trademarks (herein after referred as “PT”) regulates rules regarding trademark infringement. It is required to retrieve the loss in case of enlarging rights unlawfully vested by trademark holder by way of license or vesting in third parties these rights, imitating trademark by using trademark or an undistinguished image without trademark holder’s permission. It is possible for trademark holder to file for his loss as well.

The individual whose trademark is breached can file a case to stop and avoid the breaching of trademark. This case is filed in order to abate continuing breach of trademark.

According to the PT, it is possible to file a case to resolve the breach of trademark and to indemnify pecuniary loss and intangible damages. The case of resolving breach of trademark is aimed at removing conclusions arising out of breaching trademark. Indemnification right priority vests with the trademark holder. Such trademark holder may be a legal entity and such situation shall not prevent to claim for non-pecuniary damages.

There is also a provision included in the PT entitled as indemnification. According to this provision the individual who produces products, sells, distributes or releases to a commerce space by another way or imports these, aims or possesses a commercial propose, is under the obligation to remove illegality and to retrieve the loss.

In case the trademark holder suffers a badly and disagreeable usage of the trademark, he may also be able to claim for nominal damages. The credit of the trademark expresses the image raised by such trademark. Bad-production and introducing to the market are the causes for procuring the nominal damages.

The trademark holder whose trademark rights’ are breached must claim for damages in 2 years from the date of being informed of such damage and in 10 years anyhow from the date of committing the act.


Latest Classification for the Registration of Trademarks in Turkey

This communique, determining the list of goods and services, for the classification of the trademarks is issued in line with the Nice Agreement and will be in effect as of January 1, 2014.

The attached list does not contain all the goods and services. Such uncontained goods and services may be added to the list following the application. In this regard, such goods and services may be evaluated and categorized as the similar ones that are determined in the Nice Agreement and contain similar feature, function, or purpose.

Click on the following link to reach the mentioned Communique.