FOREIGN INVESTMENT GUIDE

• BUILDING A BUSINESS
• WORK PERMIT
• RESIDENCE PERMIT
• REAL ESTATE AND CITIZENSHIP ACQUISITION
• COST OF DOING BUSINESS
• INVESTMENT AREAS
• TAX GUIDE
• LEGAL GUIDE

 

4. REAL ESTATE AND CITIZENSHIP ACQUISITION

What Foreigners Who Want to Acquire Real Estate in Turkey Should Know

• Acquisition of real estate title deeds in Turkey is only approved through registration at the land registry offices.
• Real estate pre-contracts issued by notaries or made in writing with real persons do not constitute the transfer of real estate by themselves. Preliminary contracts only serve as a commitment to the transfer of ownership, and the subject property is not transferred through such documents.
• There may be liabilities such as mortgages, foreclosures and similar types of encumbrances that may prevent the sale on the subject property, and these must be checked before the relevant land registry office is initiated.
• Inquiries about immovables can be made online at parselsorgu.tkgm.gov.tr, and here, city, district, neighborhood / village, map and parcel information can be used to query the immovable property. Thus, basic information about real estate, including its current status, is available online from anywhere in the world. However, the personal information of the owner cannot be reached.
• Foreign nationals are not required to have a residence permit as a prerequisite to acquire real estate in Turkey. In addition, foreigners who buy real estate in Turkey are given a renewable short-term residence permit in accordance with the Foreigners and International Protection Law No. 6458.
• A natural or legal person who intends to acquire real estate in Turkey should apply to the General Directorate of Land Registry and Cadastre together with the owner of the property. In addition, they can make an appointment without having to personally visit the directorate offices by calling Alo 181 Call Center, which is available 24 hours a day, or by visiting randevu.tkgm.gov.tr.
• On the other hand, Turkish companies with foreign capital must first make an application to the Provincial Planning and Coordination Directorate (IPKM) in the governorate where the real estate is located. After receiving a positive response from IPKM, an application should be made to the Land Registry Directorate. These companies can apply in person, by post or e-mail.

 

1. General Information

In Turkey, the term "foreign" is defined in three categories in terms of real estate acquisition:

• Foreign natural persons
• Foreign legal entities
• Turkish companies with foreign capital

Article 35 of the Land Registry Law No. 2644 specifies the provisions regarding the acquisition of real estate by foreign real or legal persons. Article 36 specifies the provisions regarding companies with foreign capital.

The countries whose citizens have the right to acquire real estate in Turkey are determined by the Council of Ministers and the Council of Ministers can apply special conditions regarding real estate acquisition if deemed necessary.

• Legal Restrictions in Acquisition of Real Estate by Foreign Real Persons

• If permitted, foreign real persons can acquire all kinds of real estate in areas where private property is permitted. (residential, commercial, land, agricultural area, etc.)
• If there is no pre-built building on the acquired property, the foreign owner of the property must apply to the relevant public administration within two years to develop a project.
• A foreign real person can acquire real estate up to 30 hectares and limited real rights anywhere in Turkey. The Council of Ministers can give larger areas if deemed appropriate.
• Real persons of foreign nationality cannot acquire and rent real estate in prohibited military zones or military security zones. These people can buy and rent real estate in private security zones only with the permission of the governorship.
• The total acquisition by foreign real persons cannot exceed ten percent of the total area of the province where private ownership is allowed. If the ten percent limit is exceeded, foreigners will not be allowed to acquire real estate.

 

• Acquisition of Real Estate and Limited Real Rights by Legal Persons

Only commercial companies established in Turkey according to the laws of their respective countries and having legal personality can acquire real estate and limited real rights as foreign legal entities. Legal entities other than such commercial companies (foundations, associations, etc.) cannot acquire real estate and real rights.

Real estate acquisition by commercial companies established in foreign countries according to the laws of their own countries and having legal personality is allowed in exceptional cases and is only considered possible if stipulated by the provisions of international agreements or special laws. The Turkish Petroleum Law No. 6491, the Tourism Encouragement Law No. 2634 and the Industrial Zones Law No. 4737 are among the special laws that contain provisions on this issue.

NOTE: Regarding mortgages, an exception is foreseen, as there is no restriction on mortgages to be created on the property in favor of foreign real and legal persons.

• Acquisition of Real Estate and Limited Real Rights by Foreign Capital Companies Established in Turkey

Companies established as a legal entity in Turkey are considered to be in the category of foreign-owned companies under the following conditions:

• Foreign investors own fifty percent or more of the shares, or
• Foreign investors have the right to appoint and dismiss the majority of the board of directors

These companies can acquire real estate and limited real rights in order to perform the activities specified in their articles of association.

For this purpose, companies must first apply to the governorship where the immovable property is located.

On the other hand, if the real estate intended to be acquired is located in a prohibited military zone or a military security zone, the real estate acquisition will be subject to the permission of the General Staff, and if the property is located in a private security zone, the property will be subject to the permission of the governorship in the relevant region.

If the application for real estate acquisition is concluded positively, the governorship will inform the Land Registry Office in writing so that the company / business and the title deed can be registered.

The following procedures do not require permission from the governorship, therefore, the application to the Land Registry Office can be made directly without permission.

• Creating a mortgage
• Real estate acquisition as part of the collection of a mortgage by the beneficiary of a mortgage
• Transfer of real estate ownership and limited real rights due to company mergers and separations
• Real estate acquisitions in organized industrial zones, industrial zones, technology development zones and free zones
• Acquisitions arising from transactions that are accepted as loans within the framework of the relevant banking legislation or accrued for the collection of receivables

• Heritage

In Turkey, the right of inheritance of foreigners is protected. In case of death of a foreigner, their real estate passes to their heirs. If the inheritor has the right to acquire the real estate (if they are eligible in terms of nationality and if the total restriction conditions per person and throughout the country allow), the heir can keep the inherited property. Otherwise, the relevant person must immediately transfer the real estate. Otherwise, the Ministry of Treasury and Finance will sell the real estate and pay the price to the heir.

• The Right to Acquire Turkish Citizenship through the Purchase of Real Estate

Natural persons of foreign nationality are granted the right to acquire Turkish citizenship through exceptional procedures if they purchase real estate worth 250,000 USD or more.

For this purpose, foreigners have to:

• buy real estate worth at least $ 250,000
• In the application to acquire citizenship, it should indicate that they purchased the real estate for this purpose, this purpose should be specified in the title deed, and the foreigner has to declare that he will not sell the real estate for three years in the part where the declarations are made in the form.

When the title deed procedures are completed, the foreigner can request residence permit or citizenship by applying to the relevant authorities and submitting the certificate of eligibility to be issued for the real estate owner.

• Requirements for Deed Procedures

• Land registration of the real estate or information of the village / neighborhood, map, parcel, building and independent section
• Photo ID or passport issued by the foreigner's country of citizenship (notarized and sworn translations of ID cards and passports issued in alphabets other than Latin alphabet must be submitted)
• If the transaction includes a power of attorney, the document regarding the representation (decision regarding guardianship, authorization certificate, power of attorney, etc.)
• Document on the current market value of the real estate issued by the relevant municipality
• Compulsory earthquake insurance policy for buildings
• One photo of the seller and two photos of the buyer (taken in the last six months and must be 6x4 cm in size)
• Sworn translator if one of the parties does not speak Turkish

• Proxies Issued Abroad

• If the transaction is carried out by a third party authorized by a power of attorney issued abroad, the power of attorney must include the authorization for the procedure to be performed. In addition, the power of attorney must meet the following conditions:
• It must be arranged by the Turkish consulates on real estate according to their own will.
• It must be issued by the competent authorities that have the right to issue a power of attorney abroad.
• It should be arranged in the language of the country where it is organized.
• Must contain a photo (must have a legible seal and signature on the photo).
• It must contain apostille if it is arranged in a country that is a party to The Hague Convention.
• If the signature and power of attorney showing that the power of attorney has been officially signed by the relevant authority is issued in a country that is not a member of the Hague Agreement, the signature and seal of the relevant authority must be certified by the Turkish Consulate.

The application must also include a notarized and sworn Turkish translation of the power of attorney that meets the required criteria.

2. Exceptional Citizenship Acquisition

With subparagraph (b) added to the first paragraph of Article 12 of Law No.5901 on 28 July 2016;

• Those who have a residence permit pursuant to subparagraph (j) of the first paragraph of Article 31 of the Law No. 6458 by investing in the scope and amount determined by the President
• Turquoise Card holders

can acquire Turkish citizenship with the decision of the President of the Republic of Turkey.

The scope and amounts determined according to the new regulations published in the Official Gazette on September 18, 2018 are as follows, and foreigners who meet any of the following conditions can acquire Turkish citizenship by the decision of the President of the Republic of Turkey.

• Determined by the Ministry of Industry and Technology to have a fixed capital investment of at least USD 500,000 or equivalent foreign currency or Turkish lira
• Purchased by the Ministry of Environment and Urbanization of the immovable property with a minimum of USD 250,000 or equivalent foreign currency or Turkish lira, provided that it is not sold for three years
• Determined by the Ministry of Family, Labor and Social Services to have created employment for at least 50 people
• Determined by the Banking Regulation and Supervision Agency that it deposits at least USD 500,000 or its equivalent in foreign currency or Turkish lira to banks operating in Turkey with the condition of keeping deposits for three years.
• Determined by the Ministry of Treasury and Finance to purchase government debt instruments of at least USD 500,000 or its equivalent in foreign currency or Turkish lira, provided that they are kept for three years.
• Purchased real estate investment fund participation share or venture capital investment fund participation share in the amount of at least USD 500,000 or equivalent foreign currency or Turkish lira, provided that they hold at least three years, as determined by the Capital Markets Board.