In Turkey, only trading companies established according to the laws of their respective countries and having legal personality may acquire real estate and limited rights in rem as foreign legal persons. Legal persons other than such trading companies (foundations, associations etc.), on the other hand, may not acquire real estate and may not have rights in rem.
Acquisition of real estate by trading companies established in foreign countries according to the laws of their respective countries and having legal personality, on the other hand, may be granted in exceptional cases and is deemed possible only when stipulated under the provisions of international conventions or special laws. Among the specific codes inclusive of provisions on this matter are Law No. 6491 on Turkish Oil, Law No. 2634 on Tourism Incentive, and Law No. 4737 on Industrial Zones.
NOTE: With respect to mortgages, an exception is stipulated whereby there is no limitation as to the mortgages to be created over the property in favor of foreign natural and legal persons.
Acquisition of Real Estate and Limited Rights in Rem by Companies with Foreign Capital Established in Turkey
Companies established in Turkey as a legal entity are considered under the category of foreign-owned companies in accordance with the following conditions:
- Foreign investors hold fifty percent or more of the shares, or
- Foreign investors are entitled to appoint and dismiss the majority of the board of directors
These companies may acquire property and limited rights in rem in order to engage in activities set forth in their articles of association.
For this purpose, companies are required to apply first to the governor’s office where the property is located.
On the other hand, if the real estate intended for acquisition is located in a prohibited military zone or a military security zone, the real estate acquisition shall be subject to the permission of the General Staff; and if the property is situated in the private security zone, it shall be subject to the permission of the governor’s office of the respective region.
In the event of positive settlement of the application to acquire real estate, the governor’s office shall inform the company/enterprise and the Land Registry Office in writing so that the registration may be fulfilled.
The following procedures do not require permission from the governor’s office, therefore the application to the Land Registry Office may be directly made without seeking permission.
- Creation of mortgage
- Acquisition of real estate within the scope of cashing out a mortgage by the beneficiary of a mortgage
- Transfer of real estate ownership and limited rights in rem arising out of company mergers and demergers
- Acquisitions in organized industrial zones, industrial zones, technology development zones, and free zones
- Acquisitions realized due to the transactions considered as loan within the framework of the relevant banking legislation or for the purpose of collection of receivables