In this article, the real estate acquisition processes
of foreign companies and companies with foreign capital in Turkey, the rules
they must comply with and the sanctions that can be applied to them will be
discussed.
B-FOREIGN
COMPANIES
It is necessary to examine foreign legal entities by
dividing them into partnerships, associations and foundations while determining
the qualification of foreignness. Although partnerships are legal entities
established to share profits, associations and foundations do not have a profit
sharing purpose. In Turkish law, whether a partnership qualifies as a foreigner
is determined according to the provisions of the Turkish Commercial Code. While
partnerships established according to Turkish laws and headquartered in Turkey
are considered Turkish partnerships; Partnerships with headquarters abroad are
considered foreign.
1. REAL
ESTATE ACQUISITION BY FOREIGN COMPANIES
The right of foreign real and legal persons to acquire
real estate is regulated in the Land Registry Law. As a general rule, it is not
possible for foreign legal persons to acquire real estate in Turkey, but there
are exceptions to this general rule. To put it more accurately, only foreign
partnerships are allowed to acquire real estate in Turkey. Foreign associations
and foundations cannot acquire real estate. Foreign companies will also be able
to acquire real estate under certain conditions.
Companies established in accordance with the laws of
foreign countries will be able to acquire real estate or gain limited real
rights within the framework of certain special laws in Turkey.
2. SPECIAL
CASES IN WHICH FOREIGN COMPANIES CAN ACQUIRE REAL ESTATE
Foreign companies will be able to acquire real estate
if they fall within the scope of the following laws;
- Tourism
Promotion Law No. 2634: The Ministry of Culture and Tourism may decide to
allocate real estates in culture and tourism protection and development zones
and tourism centers to foreign tourism enterprises.
- Law No.
4737 on Industrial Zones: Foreign
companies may be granted easement or usage permits in regions designated as
“Industrial Zones” by the Ministry of Science and Industry.
- Turkish
Petroleum Law No. 6491: According to
this law, companies will be able to own "Oil Rights", rent the
necessary land from the Ministry of Finance, and request easement or right of
use. In addition, if the relevant lands are in private ownership, they will be
able to request the expropriation of these lands.
3. OTHER RESTRICTIONS
THAT FOREIGN COMPANIES MAY FACE IN THE ACQUISITION OF REAL ESTATE
-The size of the real estate acquired by a company
cannot exceed thirty hectares. At the same time, it cannot exceed 10% of the
private property in the district in which it is located.
-If the company has purchased a land, it has to carry
out a project on this land. This project must be submitted to the approval of
the Ministry within two years.
-Companies must obtain permission from the relevant
commands for the immovables to be purchased in military forbidden zones and
military security zones, and from the provincial governorship for immovables to
be purchased in special security zones.
-If foreign legal entities acquire real estate in
violation of these conditions or fail to fulfill their obligations, they will
be required to liquidate the real estate within one year. Otherwise, the
relevant real estate will be liquidated by the Ministry of Finance and the
amount obtained will be paid to the right owner.
B- ACQUISITION OF REAL ESTATE BY FOREIGN CAPITAL
COMPANIES
The expression of a company with foreign capital is
often confused with the expression of a foreign company. First of all, it
should be noted that companies with foreign capital are established in Turkey in
accordance with the provisions of the Turkish Commercial Code and are
registered in the Turkish Trade Registry. In other words, these companies are
companies subject to the laws of the Republic of Turkey. Only all or part of
their capital belongs to foreign real or legal persons. The fact that the
shareholders are foreign persons does not put the company in the status of a
foreign legal entity; because the nationality of the company and the
nationality of its shareholders are different matters.
1. CONDITIONS
As a general rule, companies with foreign capital
established in Turkey can purchase real estate and acquire limited real rights
in order to achieve their operational purposes.
With the Foreign Direct Investment Law No. 4875,
foreign investors were treated equally with domestic investors; permits and
approvals such as investment permits, company establishment permits have been
revoked; companies with legal personality established or participated in our
country by foreign investors are allowed to acquire immovable property or
limited real rights in regions open to acquisition by citizens of the Republic
of Turkey.
Companies with foreign capital that will operate
should apply to the governorship of the place where the real estate is located,
together with the documents showing the company's authority to acquire real
estate, for their real estate acquisition and other requests for the land
registry.
The permission of the governor's office or the chief
of staff is required for foreign-owned companies to purchase real estate from
places within the military forbidden zone, military security zone and private
security zone. The immovables acquired in contravention of this must be
liquidated within the period given by the Ministry of Finance. Otherwise, it
will be liquidated by the administration and the price will be paid to the
right owner.
2. EXCEPTIONS
TO THE CONDITIONS
Although Foreign Capital Companies established in
Turkey can acquire real estate under the above conditions, there are some
exceptions.
- Establishment of immovable pledge, property
acquisition through real estate pledge, real estate acquisition or limited real
right acquisition arising from company mergers or divisions, Real estate
ownership and limited real right acquisitions in special investment zones such
as organized industrial zones, industrial zones, technology development zones
and free zones, These conditions do not apply to immovables acquired due to
transactions deemed as loans within the framework of the Banking Law or for the
purpose of collecting their receivables.
- Similarly, the above-mentioned restrictions will not
be applied in companies in which people who lose their Turkish citizenship by
obtaining a leave of absence are shareholders. Therefore, companies in which
expatriates who have acquired the citizenship of the countries they immigrated will
be exempt from restrictions as if they were a Turkish company, even though they
are technically considered as foreign capital companies.
3-COMPANIES
WITH FOREIGN CAPITAL SUBJECT TO RELEVANT RESTRICTIONS
Although the name of this article seems to cover all
foreign capital companies, in fact, many foreign capital companies will be able
to freely acquire real estate without being subject to the conditions in this
article. Companies in which foreign persons/legal entities or international
organizations hold 50% or more of a share or appoint / dismiss the majority of
persons with the right of management will be subject to the restrictions under
this article.
4- HOW THE RELEVANT PROCEDURE WORKS
It is necessary to determine whether the real estate
that companies that want to acquire real estate in Turkey is in a military
forbidden zone, military security zone or private security zone. For this
reason, it will be necessary to apply to the Governorship Provincial Planning
and Coordination Directorate in person, by mail or by e-mail. After examining
the application, the governorship will send the title deed registration
information of the real estate and a sample of the coordinated diameter to the
General Staff (or the authorized command) to the Provincial Police Department /
Provincial Gendarmerie Directorate. In case of a positive response from these
institutions, a governor's permit may be issued to the company that applied for
it. The governor's permit will be notified to the company and the company will
have to register within 6 months after the notification. If there is no return
within 15 days, it will be acted as if a positive response has been received.
If the General Staff / Police Department / Gendarmerie
Directorate responds within 15 days that the relevant real estate is in a
military forbidden zone, military security zone or private security zone, the
approval of the authorized command / commission in terms of national security
will be required. Otherwise, the foreign capital company will not be able to
acquire real estate.
