Debt Collection in Turkey for European Companies: Enforcement, Asset Freezing and Recognition of EU Judgments

The European Union is Turkey's largest trading partner, and the volume of goods moving between Turkish exporters and buyers in Germany, the Netherlands, France, Italy, Spain, Belgium, Austria, Poland, Sweden, Denmark, Ireland, Portugal, Greece, the Czech Republic, Romania, Hungary and Finland produces a predictable side effect: unpaid invoices, dishonoured cheques and broken supply contracts.

For a European creditor, the practical problem is rarely the merits of the claim. The problem is distance. Reminder emails, collection agency letters and internal escalation notes carry no legal weight in Turkey. A Turkish debtor becomes responsive when a claim enters the Turkish enforcement system, and not before.

This guide explains how a commercial receivable is actually recovered in Turkey, what happens when the debtor objects, how assets can be frozen before they disappear, and how a judgment obtained in an EU member state is converted into an enforceable Turkish title.

Table of Contents

• Why Cross-Border Debt Recovery in Turkey Requires Local Action
• Step One: The Formal Notice Through a Turkish Notary
• Step Two: Execution Proceedings Without a Prior Lawsuit
• When the Debtor Objects: How the Objection Is Removed
• Precautionary Attachment: Freezing Assets Before It Is Too Late
• Enforcing an EU Court Judgment in Turkey
• Arbitration Awards and the New York Convention
• Limitation Periods That Can End Your Claim
• When the Turkish Debtor Is Insolvent
• Documents a European Creditor Should Prepare
• Frequently Asked Questions

Why Cross-Border Debt Recovery in Turkey Requires Local Action

Turkish enforcement law is built around a network of state execution offices (icra daireleri) operating under the Enforcement and Bankruptcy Law No. 2004. These offices are the only bodies that can attach a bank account, register a lien on real estate or seize commercial stock.

Private collection agencies cannot attach anything. A foreign law firm cannot file with a Turkish execution office. Recovery in Turkey therefore begins the moment a claim is placed into that system through a locally admitted attorney.

There is also a timing dimension. Turkish companies under financial pressure frequently transfer real estate, shift receivables to affiliated entities or empty operating accounts once litigation appears likely. The value of early action is not procedural elegance — it is reaching the assets while they are still there.

Step One: The Formal Notice Through a Turkish Notary (İhtarname)

A notarial notice is a short, formal demand served through a Turkish Notary Public. It is not a court document, but it produces concrete legal effects.

• It places the debtor in default. Where the contract sets no due date, default generally arises upon a proper demand, which starts the running of default interest.
• It creates a dated, official record. Notarial service is documented by the state and is difficult for the debtor to deny later.
• It changes the commercial dynamic. A notice from a Turkish attorney signals that the creditor has local representation and is prepared to proceed.

For claims denominated in euros, default interest on foreign currency debts is calculated under Law No. 3095 by reference to the highest one-year deposit rate applied by Turkish state banks for that currency — a point worth stating expressly in the notice.

A notarial notice is useful, but it is optional. Where there is a genuine risk of asset dissipation, sending a warning first can be counterproductive, and proceeding directly to attachment is the sounder course.

Step Two: Execution Proceedings Without a Prior Lawsuit (İcra Takibi)

One feature of Turkish law surprises most European creditors: you do not need a court judgment to start enforcement. A creditor may file directly with an execution office, which issues a payment order to the debtor. Whether the proceeding then continues smoothly or moves into court depends entirely on whether the debtor objects.

Ordinary Proceedings for Invoice-Based Claims

Where the debt arises from commercial invoices, current account balances, customs documents, delivery notes or a supply contract, ordinary execution proceedings apply. The debtor receives a payment order and has a short window — seven days from service — to file an objection.

If no objection is filed within that period, the proceeding becomes final and attachment may be requested. If an objection is filed, the proceeding is suspended and the creditor must go to court to remove it.

Accelerated Proceedings for Cheques and Promissory Notes

Where the debt is secured by a cheque, bill of exchange or promissory note meeting the formal requirements of the Turkish Commercial Code, a special accelerated track applies. Its practical advantage is significant.

This distinction is why experienced exporters to Turkey ask for a post-dated cheque or a promissory note alongside the invoice. It converts a contestable claim into a substantially faster enforcement route.

When the Debtor Objects: How the Objection Is Removed

In ordinary proceedings, an objection is easy for the debtor to file and requires no supporting evidence. Turkish law offers the creditor two routes to overcome it, and the choice between them matters.

Where the court finds the objection unfounded, it may — upon the creditor's request — order the debtor to pay compensation of not less than 20% of the claim. This is not automatic; it must be expressly demanded in the pleadings. Conversely, a creditor who pursues an unfounded proceeding may face the mirror-image sanction.

Precautionary Attachment: Freezing Assets Before It Is Too Late

Precautionary attachment (ihtiyati haciz) is the single most consequential tool available to a foreign creditor in Turkey. It allows a court to freeze the debtor's bank accounts, real estate, vehicles and receivables before any judgment exists — and, where circumstances justify it, without prior notice to the debtor.

Conditions and Security

• The claim must be due and unsecured by a pledge.
• The creditor must show a plausible case; strict proof is not required at this stage.
• The court ordinarily requires the creditor to post security, which is determined by the court and returned when the case concludes. Security is not required where the claim rests on a judgment.
• Where the debtor has no fixed domicile in Turkey or is taking steps to conceal or transfer assets, attachment may be granted even before the debt falls due.

Enforcing an EU Court Judgment in Turkey (Tanıma – Tenfiz)

If you already hold a judgment from a court in Berlin, Rotterdam, Lyon, Barcelona, Milan, Antwerp, Vienna, Kraków, Stockholm, Copenhagen, Dublin, Lisbon, Athens, Prague, Bucharest, Budapest or Helsinki, that judgment has no direct force in Turkey. It must be recognised and declared enforceable by a Turkish court under the Act on Private International Law and Procedural Law No. 5718 (MÖHUK).

The Statutory Conditions

The Turkish court does not re-hear the merits. It examines a defined set of conditions:

• Reciprocity. There must be a treaty, a statutory provision or de facto practice of reciprocity between Turkey and the state of origin. Turkey has bilateral judicial cooperation instruments with a number of EU members — including Germany, Austria, Italy and Poland — and reciprocity with others is assessed on the basis of actual practice.
• Finality. The judgment must be final and binding under the law of the state where it was rendered, evidenced by a certificate of finality.
• No exclusive Turkish jurisdiction. The matter must not fall within the exclusive jurisdiction of Turkish courts.
• Public policy. The judgment must not be manifestly contrary to Turkish public order.
• Right to be heard. The defendant must have been duly summoned and given the opportunity to defend. Default judgments where service was defective are a recurring ground of refusal.

Enforcement proceedings are heard before the civil court of first instance at the debtor's domicile or habitual residence in Turkey; where the debtor has neither, the court at the place where the assets are located is competent. Precautionary attachment may be requested in parallel to prevent the debtor from using the recognition period to move assets.

Arbitration Awards and the New York Convention

Many EU–Turkey supply, distribution, construction and engineering contracts contain an arbitration clause referring disputes to the ICC, the Vienna International Arbitral Centre, the Stockholm Chamber of Commerce, the Netherlands Arbitration Institute or a similar institution.

Turkey is a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and foreign awards are enforced through a court procedure that is, in practice, narrower than that applicable to court judgments. The grounds on which a Turkish court may refuse enforcement are limited and correspond closely to Article V of the Convention: invalidity of the arbitration agreement, breach of due process, an award exceeding the scope of the submission, irregular constitution of the tribunal, non-arbitrability, or conflict with public policy.

For European companies negotiating new Turkish contracts, this is a strategic point. A well-drafted arbitration clause frequently produces a smoother enforcement path in Turkey than a jurisdiction clause in favour of a home-state court.

Limitation Periods That Can End Your Claim

Turkish limitation periods are shorter than many European creditors expect, particularly for negotiable instruments. Delay is often what destroys an otherwise sound claim.

Because the applicable period depends on the legal characterisation of the underlying relationship — sale of goods, agency, works contract, carriage — the limitation analysis should be carried out at the outset, not after the file has been sitting in a credit control folder for two years.

When the Turkish Debtor Is Insolvent or Enters Restructuring

Where the debtor is a merchant, Turkish law offers a second route: bankruptcy proceedings. The threat of bankruptcy carries considerable weight with a functioning company and sometimes produces settlement where ordinary attachment does not.

Creditors should also be aware of konkordato, the Turkish composition-with-creditors procedure. Once a debtor obtains a temporary or definitive moratorium, individual enforcement proceedings are generally stayed and no new proceedings may be initiated. A creditor who is late to the file may find the enforcement door closed and be reduced to filing a claim in the composition process.

If a Turkish counterparty is showing distress signals — delayed payments across several invoices, bounced cheques, sudden changes in corporate structure — this is the point at which speed determines outcome.

Documents a European Creditor Should Prepare

A file can normally be opened without the creditor travelling to Turkey. The following are typically required:

Documents in English, German, French, Dutch, Italian, Spanish, Polish or the Scandinavian languages will require sworn translation into Turkish for submission. Preparing this at the start avoids losing weeks at the filing stage.

Frequently Asked Questions

Can I enforce a German, Dutch or French court judgment directly in Turkey?

No. EU regulations on the free circulation of judgments do not extend to Turkey. The judgment must first be declared enforceable by a Turkish court under Law No. 5718, after which it may be enforced like a domestic judgment.

Do I have to travel to Turkey to pursue a claim?

In most commercial recovery files, no. A properly issued power of attorney allows a Turkish attorney to file proceedings, request attachment and appear in court. Personal attendance is generally needed only where the creditor's own testimony is required.

Can I claim my debt in euros rather than Turkish lira?

Where the contract provides for payment in a foreign currency, the claim can generally be pursued in that currency, with default interest calculated on the foreign currency basis provided by law. The precise formulation of the claim at the filing stage matters, since it affects how any currency movement is borne.

What if the Turkish debtor has already transferred its assets?

Turkish law provides for annulment actions against transactions made to defeat creditors, allowing certain dispositions made within statutory look-back periods before attachment or bankruptcy to be set aside as against the creditor. These actions are fact-intensive and time-sensitive, which is why early asset investigation is important.

Is mediation compulsory before suing a Turkish company?

For commercial claims for a sum of money, applying to a mediator is a condition of admissibility before filing suit. It does not, however, prevent a creditor from initiating execution proceedings or requesting precautionary attachment.