What is an ESOP?
An employee stock option plan (ESOP) grants employees the right — not the obligation — to acquire company shares at a predetermined exercise price once the options vest, typically over four years with a one-year cliff. It aligns team incentives with company value and substitutes cash compensation at early-stage companies.
The Türkiye mechanics
- In a Turkish anonim şirket, options are usually implemented via a conditional capital increase (TTK Art. 463) or phantom/virtual share plans when real equity is impractical;
- Since 2023, qualifying techno-park and R&D-company employees benefit from an income-tax exemption on share benefits, subject to holding periods;
- After a Delaware flip-up, plans are typically restated at the US parent — see our ESOP-after-flip guide.
Why it matters
Badly papered options are a classic due-diligence finding: no board authorisation, missing option pool in the cap table, or tax surprises at exercise. Full analysis: ESOPs in Türkiye — legal and tax implications.
Related practice areaEmployment & ESOP →