The flip closes and everyone exhales; prematurely. In our files, the expensive flip problems are rarely in the flip itself; they surface in the twelve months after, when the group starts operating across two jurisdictions without operating discipline across two jurisdictions. These are the ten mistakes we keep cleaning up, ranked by cost.
The corporate layer
1. The intercompany agreement that never got signed. The Turkish A.Ş. becomes a service company for the topco, but without a services agreement, transfer pricing basis, or IP terms, every invoice is improvisation. Sign it in month one, not at the next audit.
2. Transfer pricing left to the accountant’s guess. Cost-plus on the Turkish entity is standard; an undocumented margin is not (KVK Art. 13; see our glossary entry). A one-time study beats years of exposure.
3. IP that stayed behind. If the assignment chain into the topco misses founders’ pre-incorporation work, freelancer contributions or the odd repository, your next investor’s diligence will find the gap; priced against you.
4. Board hygiene at exactly one of two levels. Delaware formalities observed, Turkish general assembly forgotten, or vice versa. Both entities are real; both need minutes, registrations and, in Türkiye, the trade-registry choreography.
The people layer
5. Employment left ambiguous. Who employs whom, under which law, paid by which entity? Dual-hat founders with no employment or secondment documentation create tax residence and social-security exposure on both sides.
6. ESOP migration postponed; the subject of yesterday’s article; postponement is itself the mistake.
7. The founder’s own tax position unexamined. Exchanging A.Ş. shares for topco shares has personal tax consequences that vary with structure and timing; the flip memo should include a founder-level analysis, not just corporate steps.
The operating layer
8. Banking and flows still wired to the old map. Customer contracts assigned to the topco while revenue still lands in the Turkish account (or the reverse) creates accounting noise and, over time, substance questions.
9. Regulatory registrations not re-papered. ETBİS records, VERBIS entries, sectoral licences, even the KVKK data-transfer analysis; all reflect the pre-flip entity until someone updates them (KVKK practice).
10. The cap table forked. SAFEs at topco level, an old shareholders’ agreement still governing the A.Ş., advisors holding promises on the wrong entity. One source of truth, reconciled quarterly, signed by counsel.
The month-one packet
Intercompany services + IP agreement, transfer-pricing memo, employment/secondment papers, ESOP route decision, founder tax note, registration update list, unified cap table. Seven documents; roughly two weeks of coordinated work; an order of magnitude cheaper than any single one of the problems above.
Full context in the Flip-Up Guide and the anatomy of a flip.
This article is for general information only and does not constitute legal or tax advice. It reflects the position as of July 2026.
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