Foreign investor refers to a natural person who is a citizen of a foreign country, a legal entity established in accordance with the laws of foreign countries, or an international organization that establishes a new company in Turkey or acquires at least a 10% shareholding or voting rights in an existing company through share acquisition or acquisitions that provide at least a 10% shareholding or voting rights in stock exchanges other than securities exchanges.
What is a Foreign Capital Company?
First of all, in order to determine whether a company falls into the category of foreign capital companies, it is necessary to evaluate the provisions of the Regulation on the Acquisition of Immovable Properties by Foreign Capital Companies numbered 27721. In accordance with subparagraph (g) of Article 3 of the relevant regulation, a foreign investor refers to a natural person who is a citizen of a foreign country, a legal entity established in accordance with the laws of foreign countries, or an international organization that establishes a new company in Turkey or acquires at least a 10% shareholding or voting rights in an existing company through share acquisition or acquisitions that provide at least a 10% shareholding or voting rights in stock exchanges other than securities exchanges. Therefore, it is possible to define the companies established or participated in by foreign investors who meet the above definition as foreign capital companies in Turkey.
How Do Foreign Capital Companies Acquire Real Estate?
Under the provisions of the Regulation on the Acquisition of Immovable Properties by Foreign Capital Companies, companies wishing to acquire real estate ownership in Turkey must apply to the Directorate of Provincial Planning and Coordination of the Governorate where the property is located with the following information and documents.
Documents Required for Real Estate Ownership Applications by Companies;
Application petition
Title deed registration information and coordinate diameter sample related to the property,
Signature circular of the company representative, which must include a commitment letter stating that the acquisition of real estate ownership or limited real rights is requested to carry out the main activity areas specified in the company's articles of association and that the property will be used for this purpose, and must be signed by the company representative who signed the commitment letter.
Authorization document, which indicates that the company is authorized for real estate disposal and shows its representative.
Company articles of association
Partnership status certificate
If the company shares are not traded on the stock exchange, a document showing the current status of the foreign shareholders, including their names or titles, nationalities, and share percentages, obtained from the trade registry office where the company's headquarters is registered within the last month,
If the company shares are traded on the stock exchange, together with the document showing the current status obtained from the Central Securities Depository, which includes the names or titles, nationalities, and share percentages of foreign shareholders who own 10% or more of the company's capital and those who own shares not traded on the stock exchange, the application must be made.
Additionally, if there are foreign investors who request not to provide information about themselves among the company shareholders and if the company shares are traded on the stock exchange, the names or titles, nationalities, and share percentages of foreign shareholders who own 10% or more of the company's capital and those who own shares not traded on the stock exchange, together with the document showing the current status obtained from the Central Securities Depository, must be sent directly to the Governorate within 5 days from the date of request by the Central Securities Depository.
If the company shares are not traded on the stock exchange, only one document is issued for the authorization document showing that the company is authorized for real estate disposal and its representative, and for the document and information showing the names or titles, nationalities, and share percentages of the foreign shareholders, which are obtained from the trade registry office where the company's headquarters is registered within the last month. As a rule, no document other than the documents mentioned above is requested from the company. All application documents should be provided in duplicate.
Legal Basis Enabling Real Estate Ownership and Limited Real Rights Acquisition by Foreign Capital Companies With the amendment made by Law No. 4916 in 2003, all foreign commercial companies were allowed to acquire real estate in Turkey, provided that they were reciprocal and complied with legal restrictive rules. Detailed regulations regarding the acquisition of property by foreigners are also included in Law No. 6369 Petroleum Law, Law No. 2634 Tourism Incentive Law, and Law No. 4737 Industrial Zones Law.
Evaluation of Real Estate Acquisition Applications During the application process, the application documents are examined, and any deficiencies and inaccuracies that can be rectified immediately are completed without the need for correspondence.
Deficiencies and inaccuracies detected later in practice are notified to the company in writing. As a rule, it is possible to make applications by post. In practice, it is not required for the authorized representative to personally submit the application documents to the Governorate.
Determination of the Region Where the Real Estate Is Located Some restrictions are envisaged by the legislator regarding the geographical limitation of foreigners' acquisition of real estate in our country. According to the regulations in the Law on Military Forbidden Zones and Security Zones No. 2565, which restricts the acquisition of real estate by foreigners geographically, villages, which were an important limitation until 2003, have been opened to foreigners' acquisition of real estate.
With this Law, two zones were determined as first and second-degree military forbidden zones on land, sea, and air.
Except for the personnel and family members in these first-degree military forbidden zones and other Turkish nationals authorized by the competent command, no one else can enter or reside. According to the mentioned provision, foreign real and legal persons cannot acquire real estate in these regions. Therefore, due to legal restrictions, it is not possible for foreign real or legal persons to acquire real estate in these regions.
Acquisition of Real Estate Ownership in Special Security Zones If the property is within a special security zone, the Commission decides on the acquisition of real estate based on the written opinions of the relevant institutions and organizations, taking into account whether the real estate acquisition is within the framework of the company's main activity stated in the articles of association, and whether the property is within a special security zone. The evaluation of whether the real estate acquisition is in line with the main activity stated in the company's articles of association is based on the assessment of the industry and trade provincial directorate, and the assessment of whether the property is within a special security zone is based on the written evaluation to be notified within twenty days by the General Directorate of Security.
