Foundations under Turkish Law: Establishment, Governance, and Dissolution
Authors: Atty. Deniz Nalbant & Int. Talha Hakyemez
Introduction
Foundations are legal entities that play a significant role in achieving social, cultural, economic, and charitable objectives under Turkish law. The institution of foundations constitutes a sui generis legal structure formed around assets and rights allocated by individuals or legal entities to a specific and continuous purpose.
This article systematically examines the concept of foundations, the conditions for their establishment, the provisions governing their organs and administrators, and the procedures for their dissolution within the framework of the applicable legislation.
I. Terminology and Legal Nature of Foundations
Foundations are asset-based legal entities formed when real or legal persons allocate sufficient assets and rights to a specific and continuous purpose. The assets allocated to the foundation must be adequate to achieve its objectives and must not render the foundation’s purpose impossible or impracticable. The assets to be allocated must belong to the founder and must be capable, at least at the establishment stage, of fulfilling the foundation’s purpose.
The purpose to which the assets are dedicated must be lawful, specific, comprehensible, and continuous in nature.
II. Minimum Asset Requirement for the Establishment of Foundations
For newly established foundations, the minimum asset amount to be allocated according to their purpose has been set at TRY 5,000,000 for the year 2026 pursuant to the Resolution of the Council of Foundations dated 22.12.2025 and numbered 819/790.
If the allocated assets are in cash, the relevant amount must be deposited into a bank and blocked in the name of the foundation. If movable or immovable assets are allocated, their valuation must be determined by the court. Furthermore, the competent court shall ex officio take the necessary measures to protect the assets and rights allocated to the foundation.
III. Capacity to Establish a Foundation
Any natural person with full legal capacity, namely a person who has reached the age of eighteen, possesses discernment, and is not subject to any legal restriction, has the right to establish a foundation.
Legal entities may establish foundations only if their constitutional documents expressly permit the establishment of foundations and the allocation of assets thereto; mere legal capacity is not sufficient.
IV. Procedure for the Establishment of a Foundation
The intention to establish a foundation may be expressed through a will or inheritance agreement, or by executing an official deed during the founder’s lifetime.
Where a foundation is established by official deed, the foundation charter must be signed simultaneously before a notary public by all founders. If the establishment is carried out through a representative, the authority of representation must be granted by a notarised power of attorney clearly specifying the foundation’s purpose and the assets and rights to be allocated.
If a legal entity is among the founders, its constitutional documents or a competent corporate resolution authorising the establishment of a foundation and allocation of assets must be submitted to the court together with the foundation charter.
The establishment process requires an application to the competent civil court of first instance for registration. During the registration proceedings, the court submits the foundation charter to the Directorate General of Foundations, acting as the supervisory authority, for its opinion. Based on this opinion or ex officio, the court may order amendments to the charter or require an increase in assets to ensure alignment with the foundation’s purpose.
Once registered in the registry, the foundation acquires legal personality and, as a rule, the founder’s intent becomes irrevocable. However, where the intent to establish a foundation is declared through a will or inheritance agreement, it may be revoked until the death of the testator.
V. Organs of the Foundation
The only mandatory organ of a foundation is the governing body, which functions as both the decision making and executive organ. The specific governing body must be designated in the foundation charter.
Optional organs may also be established in the charter. In practice, bodies such as a board of trustees, general assembly, supervisory board, advisory board, and honorary board are commonly encountered. In some foundations, the board of trustees itself serves as the governing body.
If the governing body is designated as a Board of Directors or a Board of Trustees, the governing body must notify the Directorate General of Foundations’ system of the relevant members and their appointment details within fifteen days of assuming office.
VI. Requirements and Obligations of Foundation Administrators
Pursuant to Article 6/V of the Foundations Law, the majority of individuals serving on the governing bodies of foundations must be resident in Türkiye. Furthermore, individuals convicted of certain offences, including theft, aggravated theft, robbery, fraud, embezzlement, bribery, forgery, fraudulent bankruptcy, bid rigging, interference with contract performance, breach of trust, smuggling offences, or offences against state security, may not serve as foundation administrators. If an administrator is convicted of any such offence during their term, their status as an administrator automatically terminates.
Foundation administrators are also required to submit asset declarations pursuant to Article 2(f) of Law No. 3628 on Declarations of Assets and Combating Bribery and Corruption. Asset declarations must be submitted in a sealed envelope following establishment and renewed in years ending with the digits 0 and 5.
Administrators may not be removed from office without a court decision. However, upon a decision of the Council of Foundations and an application by the Directorate General of Foundations, the competent civil court of first instance may dismiss administrators in cases such as activities contrary to the foundation’s purpose or legislation, misuse of foundation assets, gross negligence or intentional misconduct causing harm, failure to remedy identified deficiencies, loss of legal capacity, or permanent incapacity due to illness.
VII. Membership in Foundations
Membership in foundations is permissible pursuant to a 2008 decision of the Constitutional Court. Provided that it is expressly regulated in the foundation charter, membership fees may be collected. It is also recommended that the charter include provisions governing the consequences of non-payment of dues, such as termination of membership, and the procedures for notification.
VIII. Dissolution and Liquidation of Foundations
A foundation may be dissolved upon application to the competent civil court of first instance by the governing body or the Directorate General of Foundations where it is determined that the foundation’s purpose has become impossible to achieve. The court, after obtaining the opinions of the Directorate General of Foundations or the governing body, may order dissolution and the establishment of a liquidation committee, and the decision is registered in the registry.
Following the liquidation of debts, any remaining assets and rights of the dissolved foundation are transferred to another foundation or institution specified in the charter whose purpose most closely aligns with that of the dissolved foundation. In the absence of such a provision, the court shall determine a transfer to a similar-purpose foundation after obtaining the opinions of the Directorate General of Foundations and the relevant foundation.
Conclusion
Foundations constitute an important legal mechanism for achieving socially beneficial objectives. The processes of establishment, governance, and dissolution are subject to strict formal requirements and supervision to protect both the founder’s intent and the public interest. Accordingly, the careful drafting of the foundation charter, compliance of governing bodies with applicable legislation, and adherence to the foundation’s purpose are essential for the sustainable and lawful operation of foundations.
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