CONDITIONS FOR FOREIGN INDIVIDUALS AND COMPANIES TO ACQUIRE REAL ESTATE IN TURKEY

WHO ARE FOREIGNERS UNDER TURKISH LAW?

In the Turkish legal system, the law of foreigners is not regulated under a single, independent legal framework. Instead, its fundamental principles are determined within the scope of citizenship law and civil law. Accordingly, the concept of a foreigner is primarily shaped by whether an individual or a legal entity has a citizenship bond with the Republic of Turkey.

Turkish law categorizes foreigners into two main groups: natural persons and legal entities. Natural persons refer to individuals, while legal entities include companies, associations, and even foreign states. Therefore, determining whether a person or entity is foreign is a legal matter that requires assessing their citizenship status.

Different legal systems define the concept of a foreigner in various ways. According to the Turkish Citizenship Law No. 5901, a foreigner is defined as “a person who does not have a citizenship bond with the Republic of Turkey.” This broad definition includes not only citizens of other states but also stateless individuals and refugees.

When examining legal perspectives on foreigners, it is clear that this concept is not solely defined by citizenship but also by the legal regime and status of an individual. In legal doctrine, two primary approaches exist:

1. Citizenship-Based Approach: This view determines a person’s foreign status solely based on their citizenship. If an individual is not a citizen of a particular state, they are considered foreign in relation to that state. This approach is commonly used in legal systems that prioritize state sovereignty.
2. Legal Status-Based Approach: This perspective does not limit the concept of a foreigner to citizenship but also considers the legal regulations, rights, and obligations applicable to an individual. According to this approach, a person or legal entity can be classified as foreign depending on the degree to which they are subject to the host country’s legal system. For instance, even if a person holds the nationality of a state, they may still be considered foreign in specific situations (refugees, diplomatic representatives etc.).

In this context, the determination of foreign status is not limited to identifying citizenship status alone but is shaped by considering the rights and obligations of the individual or legal entity, their legal status, and the applicable legislation.

Particularly with the process of globalization, the concept of “foreigner” has taken on an increasingly dynamic structure and has become multidimensional within the framework of international law and domestic legal regulations. Therefore, determining whether a person is a foreigner is not solely based on the existence or absence of a citizenship bond but is also related to their legal status, international agreements, and specific regulations.

• The Concept of a Foreign Natural Person

A natural person is legally defined as “a human being capable of rights and obligations.” The concept of a foreign natural person is generally understood as “an individual who does not have a citizenship bond with the state in which they reside.”

As previously mentioned, the concept of “foreigner” is sometimes defined not based on the rights an individual holds but directly on the basis of citizenship. Therefore, to better understand the concept of a foreign natural person, it is essential first to clarify the notion of citizenship.

Citizenship is a status that legally and politically connects an individual to a specific state. In other words, it is a legal relationship established by the unilateral exercise of a state’s sovereignty, determining its conditions and legal consequences. The citizenship bond is a fundamental element that defines an individual’s relationship with the state and shapes their rights and obligations.

Based on these definitions, foreign natural persons can be classified into different categories according to their legal status.

In Turkish law, foreign natural persons are categorized into the following subgroups:

1. Individuals with the citizenship of one or more foreign states: These individuals are not Turkish citizens but hold at least one foreign nationality.
2. Dual or multiple citizens, including Turkish nationality: These individuals may be subject to different legal regulations depending on their ties to multiple states.
3. Stateless individuals (apatrides): Those who lack citizenship of any country are subject to specific international protection mechanisms.
4. Refugees: Those who have obtained refugee status under international law may have severed or lost their legal ties with their home country.
5. Migrants: Those who move to Turkey for economic, social, or political reasons may be classified as foreigners depending on their legal status.
6. Minorities: Although they hold Turkish citizenship, some minority groups (as recognized under the Treaty of Lausanne) may be subject to specific legal provisions overlapping with foreigner-related regulations.

In conclusion, the concept of a foreign natural person is not solely shaped by the bond of citizenship but also takes into account the individual’s legal status, rights, and position within the framework of international law. Accordingly, the legal status of foreign natural persons is directly linked to their citizenship status, migration movements, and international legal norms.

• The Concept of a Foreign Legal Entity

A legal entity is an entity recognized as a subject of rights by the legal system, possessing an independent existence and a specific purpose apart from the individuals who constitute it. In legal systems, not only natural persons but also legal entities are considered independent entities capable of holding rights and obligations. When natural persons come together in accordance with legal provisions to achieve specific objectives, these groups attain legal personality, becoming separate from their founding members.

Legal entities are classified into two categories based on their purpose: those established for profit-sharing and those that do not pursue profit. Legal entities formed for profit-sharing are referred to as companies, while non-profit entities include organizations such as associations and foundations.

Similar to determining the legal status of foreign natural persons, the legal status of foreign legal entities is also assessed based on nationality criteria. However, whether legal entities can possess citizenship status is a debated issue. Consequently, in regulations concerning foreign legal entities, the concept of nationality (origin) becomes a key consideration.

Determining the state to which a legal entity belongs is of great significance in defining its legal status. This is particularly important for identifying the applicable law, ensuring that legal principles concerning foreigners apply to legal entities, and providing diplomatic protection. Additionally, in the resolution of disputes involving foreign legal entities within the framework of private international law and procedural law, it is essential to establish which state the legal entity is subject to. Each state has the authority to determine, according to its own legislation, the conditions under which legal entities operating within its borders acquire legal personality and the legal regime to which they are subject.

There are various criteria used to determine the state to which a legal entity belongs. These criteria include:

1. Place of Management (Central Administration Principle): A legal entity is considered foreign if its administrative or operational headquarters are located outside Turkey.
2. Nationality of Shareholders: The legal status of a company may be influenced by the nationality of its majority shareholders or members.
3. Controlling Country: If a legal entity is controlled by individuals or entities of a specific nationality, this may influence its classification.
4. Country of Capital Formation: The country where the company’s financial resources are sourced can be a determining factor.
5. Place of Incorporation (Incorporation Principle): A legal entity is considered foreign if it is registered and established under the laws of another country.

Companies, as they are established for profit-sharing, differ from associations and foundations. In assessing the status of foreign legal entities, the legal distinction between companies and associations or foundations must be considered.

In Turkish law, the foreign status of a company is determined based on the provisions of Turkish Commercial Law under the Turkish Commercial Code (TCC) No. 6762. Article 42 of the TCC regulates the legal status of businesses operating in Turkey and refers to “commercial enterprises with headquarters located outside Turkey.” According to this provision, a partnership with its headquarters outside Turkey is considered foreign under Turkish Company Law.

In this context, the concept of the business headquarters is a fundamental factor in determining the foreign status of legal entities, along with the management headquarters. In Turkish law, if a legal entity’s business headquarters is located outside Turkey, it is classified as a foreign entity. Therefore, the Turkish legal system adopts a determination method based on the management headquarters principle, classifying foreign legal entities according to the location of their headquarters.

IS IT POSSIBLE FOR FOREIGNERS BUYING PROPERTY IN TURKEY?

There are three different categories of foreigners in terms of acquiring real estate in Turkey: Foreign natural persons, foreign legal entities, and Turkish companies with foreign capital. The regulations regarding these concepts are included in the Land Registry Law No. 2644.

1. Foreign Natural Persons: The acquisition of real estate by foreign persons in Turkey is regulated under Article 35 of the Land Registry Law. Although the principle of reciprocity has been abolished in this regulation, the acquisition of real estate by foreigners is still subject to certain restrictions. The Council of Ministers of the Republic of Turkey determines which country’s citizens are eligible to acquire real estate. If deemed necessary, the Council of Ministers may also impose special conditions for acquisition.
2. Foreign Legal Entities: The acquisition of real estate by foreign legal entities is also regulated under Article 35 of the Land Registry Law No. 2644. However, foreign legal entities can acquire real estate only within certain sectors and under specific laws.
3. Turkish Companies with Foreign Capital: Foreign capital companies are companies established in Turkey in which foreign investors own 50% or more of the shares. The acquisition of real estate by these companies is regulated under Article 36 of the Land Registry Law. These companies can apply for real estate acquisition in Turkey with specific documents; however, the acceptance of their applications depends on fulfilling certain requirements.

The Council of Ministers may consider national security and strategic priorities when determining which country’s citizens can acquire real estate in Turkey. It may also impose special conditions for foreign ownership of real estate in the country.

• Acquisition of Property by Foreign Persons in Turkey

Foreign persons can purchase different types of real estate, such as residential properties, commercial properties, land, and farmland, in Turkey, subject to certain legal restrictions. Foreigners buying property in Turkey offer significant opportunities for both individual investors and foreign capital companies. Large cities and tourist areas attract significant interest from foreign investors, while regulations in this field aim to make investment processes more transparent and secure.

1. Legal Basis for the Buying Property in Turkey for Foreigners

Buying property in Turkey for foreigners is regulated by the Land Registry Law No. 2644. Amendments introduced with Law No. 6302 abolished the reciprocity condition, thereby expanding the scope of foreign nationals eligible to own property in Turkey. This change has increased foreign investors’ interest in the Turkish real estate market and provided significant dynamism to the sector.

Foreigners do not need to obtain a residence permit to purchase real estate in Turkey. However, foreigners who own real estate in Turkey may be granted a short-term residence permit for up to one year under the Law on Foreigners and International Protection No. 6458.

If any dispute arises regarding the acquisition of real estate by foreigners in Turkey, the matter must be resolved through judicial authorities. Disputes can be settled by filing a lawsuit in the court where the real estate is located.

2. Form of the Property Sales Agreement for Foreigners Buying Property in Turkey

Under Turkish law, the transfer of real estate ownership is only possible through an official deed and registration at the Land Registry Offices. Therefore, a “promise to sell” agreement made before a notary is not sufficient for the transfer of real estate ownership.

Although it is possible to sign a promise to sell agreement before a notary, this agreement does not result in the transfer of real estate ownership in Turkey. Similarly, informal sales agreements made outside a notary are not considered valid for transferring property ownership in Turkey.

Therefore, foreign persons who wish to acquire real estate in Turkey must complete the official procedures at the General Directorate of Land Registry and Cadastre to obtain legal ownership.

3. Legal Restrictions on the Acquisition of Real Estate by Foreigners in Turkey

The acquisition of real estate by foreigners in Turkey is subject to the Land Registry Law No. 2644 and relevant regulations, with certain restrictions imposed. These restrictions are aimed at national security and economic oversight. Buying property in Turkey for foreigners is subject to legal and administrative limitations.

The main legal restrictions on real estate acquisition by foreigners in Turkey include:

• Type of Property and Ownership Limitations: Foreign natural persons can only acquire real estate in areas where private ownership is allowed (e.g., residential properties, commercial properties, land, farmland, etc.). A foreign person can purchase up to 30 hectares of real estate or acquire limited property rights across the country.
• Acquisition of Undeveloped Land: If the acquired property is undeveloped land, the foreign owner must apply to the relevant public authority within two years to develop a project on the land.
• Military Prohibited Zones: Foreigners are prohibited from acquiring and leasing real estate in military prohibited zones and security zones.
• Special Security Zones: Foreigers can acquire and lease real estate in special security zones only with the permission of the governor’s office. Seeking legal support from a rental law attorney may be necessary during the leasing process.
• Farmland Acquisition: Approval from the Ministry of Agriculture and Forestry is required to acquire farmland.
• Real Estate in Protected Areas (SIT Zones): Foreigners wishing to acquire real estate in a protected area must obtain approval from the Ministry of Culture and Tourism or the Ministry of Environment and Urbanization, depending on the characteristics of the area.
• Municipal Property Ownership Quota: Foreign natural persons can own real estate and acquire limited property rights in a district, but only up to a maximum of 10% of the privately owned land in that district.

There are no restrictions on establishing a mortgage in favor of foreign persons and foreign commercial companies.

4. Liquidation of Illegally Acquired and Misused Real Estate

Foreigners who acquire real estate in Turkey in violation of the law, use the property contrary to its intended purpose, or fail to complete the committed projects within the required timeframe are subject to enforcement and liquidation procedures.

The following situations may lead to the liquidation of real estate acquired by foreigners in Turkey:

1. Use Contrary to the Purpose of Acquisition: If the acquired property is used for purposes other than its intended use and the issue is not corrected within the given period, the property may be subject to liquidation.
2. Failure to Develop Projects on Undeveloped Land: If no application is made to the relevant public authority or if the required projects are not completed within the specified time frame for undeveloped land, the property may be subject to liquidation.
3. Real Estate Acquired Through Inheritance: If real estate or limited property rights acquired through a will or inheritance by foreign nationals violate the legal restrictions on foreign ownership, such properties may be subject to liquidation.
4. Transfer Period Set by the Ministry of Finance: Owners of real estate subject to liquidation are given a one-year period by the Ministry of Finance to transfer the property. If the property is not transferred within this period, it will be liquidated, and its value will be paid to the rightful owner.

These regulations establish an important mechanism to control foreigners buying property in Turkey, prevent unlawful ownership, and ensure national security.

5. Application Process for Real Estate Acquisition by Foreigners in Turkey

Foreigners who wish to acquire real estate in Turkey must be listed among the “Citizens of Countries Eligible to Acquire Real Estate and Limited Property Rights in Turkey” and meet the required conditions.

a- Application Steps at the Land Registry Office

• The property owner or an authorized representative must submit a preliminary application to the Land Registry Office.
• Turkish citizens and authorized representatives can apply through the E-Government and Webtapu systems.
• If there are missing documents, the preliminary application may be put on hold until the file is complete.

b- Required Documents for Application

• The title deed of the property or relevant location details (village/neighborhood, block, parcel, building, independent section information).
• Identity document or passport (with a notarized translation if required).
• “Property Tax Value Certificate” obtained from the relevant municipality.
• Compulsory earthquake insurance (DASK) policy for buildings.
• A sworn translator for parties who do not speak Turkish.
• If transactions are to be carried out with a power of attorney issued abroad, the original or certified copy of the power of attorney, along with a notarized translation.

c- Characteristics of Powers of Attorney Issued Abroad

• Powers of attorney issued by the Turkish Embassy or Consulate are valid.
• Powers of attorney issued by foreign notaries do not require additional approval from the Turkish Consulate if they bear the “Apostille” stamp under the Hague Convention of October 5, 1961.
• In countries that are not parties to the Hague Convention, the notary’s signature must be approved by the competent authority, and the signature and seal of this authority must be authenticated by the Turkish Consulate.

d. Financial Obligations for Foreigners Buying Property in Turkey

• The title deed fee is paid by both the buyer and the seller based on the sale price. (According to the Fees Law No. 492, the rate is set at 2% for each party in 2025.)
• The revolving fund fee is determined regionally.
• During the procedures carried out to determine whether the property is located in a military or security zone, an additional fee may be required for a map prepared by the Cadastre Directorate if necessary.

6. Important Considerations for Foreigners Buying Real Estate in Turkey

• The Land Registry Office should be checked for any mortgage, lien, or other restrictions on the property.
• If a real estate acquisition application is rejected, an appeal can be made to the Regional Directorate of the Land Registry Office.
• It is recommended not to work with unknown or unreliable individuals or companies.
• Foreigners are not required to obtain a residence permit to acquire real estate in Turkey.
• To avoid potential tax penalties, the correct sales price of property must be declared at the Land Registry, and tax consultancy should be sought if necessary.
• In case of any disputes, legal action can be taken through Turkish courts.

• Conditions of Foreign Companies Purchasing Property in Turkey

The acquisition of real estate in Turkey by foreign companies is subject to different exemptions and rules depending on the foreign status of the company. Turkish law distinguishes between foreign-capitalized companies (companies established in Turkey with foreign shareholders) and direct foreign companies (companies incorporated abroad), shaping the regulations within the framework of economic and security policies.

While foreign-capitalized companies established under Turkish law are subject to specific regulations, companies incorporated abroad cannot acquire property in Turkey unless permitted by special laws. These legal provisions aim to balance investment facilitation with national strategic interests.

1. Property Acquisition for Foreign Companies in Turkey

According to Article 35 of the Turkish Land Registry Law (Law No. 2644), commercial companies incorporated under foreign laws can only acquire real estate in Turkey under special laws. The primary special laws that allow this are:

• Petroleum Law (Law No. 6326)
• Tourism Promotion Law (Law No. 2634)
• Industrial Zones Law (Law No. 4737)

Companies, branches, liaison offices, or subsidiaries established in foreign countries cannot directly purchase real estate in Turkey. However, they can acquire property by establishing a company in Turkey and purchasing it under that company’s name.

Foreign companies operating as branches in Turkey cannot directly acquire property ownership in Turkey but may have rights such as long-term leases.

Except for areas permitted under these laws, foreign companies cannot acquire real estate in Turkey. However, there are no restrictions on establishing real estate mortgages in favor of these foreign commercial companies.

Foundations, associations, and other foreign legal entities can not acquire real estate in Turkey, nor can limited real rights be established in their favor.

2. Acquisition of Property by Foreign-Capitalized Companies in Turkey

With the amendment of Article 36 of the Land Registry Law (Law No. 2644) and the enactment of the Regulation on the Acquisition of Real Estate by Companies under Article 36 (Published on August 16, 2012), the real estate acquisition process for foreign-capitalized companies was redefined.

The 36th article of the revised Title Deed Law states:

1. Foreign nationals, legal entities established under the laws of foreign countries, and international organizations, as well as companies established in Turkey that are at least 50% owned or have management rights by foreign entities, are considered “foreign capital companies.”
2. Foreign capital companies can acquire real estate ownership or limited property rights in Turkey only for the activities specified in their articles of association.
3. Other foreign companies, excluding foreign capital companies, may acquire real estate ownership and limited property rights under the provisions applicable to domestic companies.
4. Individuals covered by Article 28 of the Turkish Citizenship Law No. 5901, dated May 29, 2009, are excluded from this regulation.

With this regulation, the real estate acquisition by foreign corporations in Turkey has been restricted to their areas of activity, and a clearer legal framework has been established for such companies. The real estate acquisition processes for foreign capital companies in Turkey are designed to support investments only in specific sectors.

Things to Consider for Foreign Capital Companies Purchasing Property in Turkey:

• Foreign Capital Status and Restrictions: The company’s foreign capital status and whether there are any restrictions on real estate acquisition are evaluated under the relevant regulations.
• Permission from Local Authorities: To acquire real estate, foreign capital companies must obtain permission from the Governor’s Office of the province where the property is located (specifically the Provincial Planning and Coordination Directorate).
• Use of Acquired Property: The real estate acquired by foreign capital companies must be used only in a manner consistent with the company’s field of activity.
• Limit on Land Acquisition: Foreign companies may acquire a maximum of 30 hectares (300,000 m²) of real estate across Turkey. This limit may be increased up to twice the amount with approval from the President.
• Agricultural Land Acquisition: The acquisition of agricultural land by foreign capital companies is subject to the permission of the Ministry of Agriculture and Forestry. Additionally, foreign companies must obtain a separate permit to engage in agricultural production.
• Tenant Rights: In the event of purchasing a property with tenants in Turkey, the legal procedures must be followed without violating the tenants’ rights in Turkey.

These regulations are designed to clarify the process for foreign companies buying property in Turkey, aiming to attract investment in specific sectors while ensuring that foreign ownership complies with local laws and policies.

a- Governor’s Office Approval Requirement for Foreign Companies Buying Property in Turkey

The acquisition of real estate in Turkey by foreign companies is subject to Article 36 of the Turkish Title Deed Law No. 2644 and the “Regulation on Real Estate Ownership and Limited Property Rights of Companies and Affiliates Under Article 36 of Law No. 2644,” dated August 16, 2012.

This regulation includes specific security procedures for foreign investors to acquire rights over real estate in Turkey. Foreign capital companies are required to obtain approval from the Governor’s Office under certain special conditions before proceeding with purchasing real estate in Turkey. This approval process is carried out in accordance with the security status and legal conditions of the location where the property is situated.

1. Application Process: Foreign capital companies that either own 50% or more of the shares or have the authority to appoint or dismiss the majority of the managers, even if they do not hold such a share, must apply to the Provincial Planning and Coordination Directorate of the Governor’s Office to acquire real estate in Turkey. The application is made with the documents specified in the regulation.
2. Evaluation and Monitoring Procedure: Once foreign capital companies submit their applications to the Provincial Planning and Coordination Directorate to acquire real estate in Turkey, the evaluation process begins. This process aims to determine whether the property is located in a special security zone or military prohibited areas. The Governor’s Office shares this information with the relevant military and security authorities and performs a detailed assessment of the property’s security situation.
3. Governor’s Approval: The Governor’s approval process is a critical step to ensure the suitability of the real estate acquisition in terms of security and to protect Turkey’s national security. The approval must be obtained before the property acquisition, and specific procedures must be followed to complete it.
4. Governor’s Office Procedures: After the application is made, the Governor’s Office sends the property’s title deed information and the coordinate-based map sample to the General Staff or authorized military commands within three working days. A response is requested from the military commands regarding whether the property is within a military prohibited area, military security zone, or the area defined under Article 28 of Law No. 2565. If a response is not received within 15 working days, the property is considered not to be in these areas, and the process proceeds. Additionally, the local police department or gendarmerie command is asked if the property is within a special security zone. If no response is received within 15 working days, it is assumed the property is not in that zone.
5. Security Evaluation: If the property is located within a military prohibited zone, military security zone, or any area defined under Article 28 of Law No. 2565, the Governor’s Office sends the other required documents to the General Staff or military commands three working days after the application. These documents are used to evaluate whether the property acquisition request is suitable from a national security perspective. A response must be received within 30 days. If no response is received within this period, it is assumed that the property acquisition is deemed suitable for security purposes.
6. Registration Process: If the application is approved or considered approved, the Governor’s Office sends written information to the relevant company or affiliate and the Title Deed Registry Office within three working days to proceed with the registration process. The registration request must be made within six months of the written notice being delivered to the company or affiliate. If registration is not completed within this period, the application must be renewed.

This procedure regulates the security and local government approval processes for foreign companies buying property in Turkey.

b- Notification Requirement in the Change of Partnership Structure via Share Transfer

As a result of a share transfer, companies falling under the scope of the Regulation are required to notify the Ministry of Economy of the share transfer. This notification must be made within one month after the completion of the share transfer. The notification is made in accordance with the “Regulation on the Implementation of the Direct Foreign Investment Law” published in the Official Gazette No. 25205 on 20/08/2003.

However, this notification requirement only applies to subsidiaries that own real estate. Other subsidiaries are not required to notify due to the share transfer. This regulation is implemented to ensure the traceability of changes in the share structure of companies and foreign capital movements.

c- Liquidation of Real Estate Acquired by Foreign Capital Companies in Turkey for Unauthorized Use

Real estate or limited rights acquired in Turkey by foreign capital companies under the Regulation will be monitored by the Directorate General of Land Registry and Cadastre for compliance with the activities outlined in the company or affiliate’s articles of association. This inspection will be carried out by the relevant Commission.

If it is determined that the real estate or limited right is being used for purposes other than those stated, the company or affiliate will be notified in writing within three working days. The company or affiliate must respond in writing within thirty days. Otherwise, the contents of the notification will be deemed accepted. If it is found that the use is contrary to the articles of association, a one-time six-month period may be granted to rectify the usage.

If it is determined that the real estate or limited rights were acquired or used in violation of the Regulation, liquidation procedures may be initiated for those properties or rights. This regulation aims to encourage the proper use of real estate and prevent illegal usage.

d- Actions to Be Taken After Real Estate Acquisition by Foreign Corporations in Turkey

Foreign capital companies are subject to certain obligations defined by the state after acquiring real estate in Turkey:

• Declaration Requirement: After the acquisition of real estate in Turkey, the company is required to submit a declaration to the relevant Land Registry Office.
• Zoning and Usage Rules: The acquired real estate must be used in accordance with the zoning plan. Real estate purchased by foreign companies must be planned and put into use within five years.
• Transfer and Sale of Real Estate: Foreign capital companies may transfer the acquired real estate to Turkish companies or other foreign capital companies. However, a new permission must be obtained from the relevant governorate for this transfer.

e- Advantages of Foreign Companies Purchasing Real Estate in Turkey

There are many advantages to foreign companies purchasing real estate in Turkey:

• Strategic Location: Turkey has a strategic location acting as a bridge between Europe, Asia, and the Middle East.
• Investment Incentives: Special incentives and tax advantages are provided for investments in industrial zones, tourism, and technology.
• Increase in Property Values: The real estate sector in Turkey offers high-return investment opportunities.
• Rental Income: The rental income and rental increases of the acquired real estate will provide resources for the company, strengthening its financial position by being recorded as revenue.
• Free Zones and Special Investment Areas: Foreign companies can benefit from advantageous investment opportunities in free trade zones.

Property Acquisition for Foreign Companies in Turkey is possible within the framework of legal regulations. However, to ensure the process is carried out correctly, compliance with the Land Registry Law, relevant regulations, and governorate approval processes is required. Therefore, seeking legal advice and ensuring that applications to the relevant authorities are fully completed is one of the most important steps to facilitate the process for acquisition of real estate in Turkey by foreign companies.

LIMITED REAL RIGHTS ACQUISITION BY FOREIGN LEGAL ENTITIES IN TURKEY

The acquisition of limited real rights, such as usufruct rights, easement rights, or real property burdens, by foreign legal entities in Turkey is subject to certain limitations set forth by the Turkish Land Registry Law (Law No. 2644) and relevant regulations. Generally, foreign legal entities can acquire limited real rights on real estate in Turkey only under specific conditions. These regulations create a control mechanism to safeguard Turkey’s security and economic stability by limiting foreign ownership rights on real estate.

Below are the key legal limitations regarding foreign legal entities’ acquisition of limited real rights in Turkey:

1. Right to Acquire: Foreign legal entities in Turkey can only acquire limited real rights through commercial companies established according to the laws of their own countries. Such foreign legal entities cannot acquire real estate through foundations, associations, or similar structures.
2. Definition of Foreign Capital Companies: Companies established in Turkey where foreign investors hold 50% or more of the shares, or have the majority authority to appoint and dismiss the board members, are considered foreign capital companies. These companies can acquire real estate or limited real rights in Turkey only for the purpose of performing the activities specified in their articles of association.
3. Governorship Permission Requirement: Foreign capital companies must apply for permission from the governorship of the area where the real estate is located to acquire limited real rights. If the real estate is located in a military restricted area or a military security zone, permission from the General Staff is required. If the real estate is within a private security zone, permission from the relevant governorship is required.
4. Mortgage Exception: There are no restrictions on the establishment of mortgages on real estate in favor of foreign natural and legal persons. This provision allows foreign entities to freely use mortgages along with property acquisition. Mortgage establishment and the rights of the mortgagee to liquidate the mortgage can be carried out without governorship permission.
5. Banking Legislation Exception: Transactions related to real estate acquisitions made for the purpose of banking operations, including the collection of receivables, may be directly processed through the Land Registry without the need for an application to the relevant authorities.

The acquisition of limited real rights by foreign legal entities in Turkey aims to protect the country’s security and economic interests. Therefore, although limited real rights acquisitions by foreign legal entities are possible under certain exceptions and conditions, there is strict oversight and regulation in place to ensure compliance with these goals.

FOREIGNERS’ RIGHT TO ACQUIRE REAL ESTATE IN TURKEY THROUGH INHERITANCE

Turkey protects the inheritance rights of foreigners over real estate they own. When a foreigner purchases real estate in Turkey, their heirs can inherit this property upon their death. However, there are specific regulations governing the inheritance rights of foreign nationals over real estate in Turkey.

Foreigners’ inheritance rights in Turkey are protected equally to those of Turkish citizens. The real estate acquired by foreigners in Turkey passes to their heirs after their death. However, the heirs must meet certain conditions to acquire the property. The following conditions apply:

• Nationality of the Heir: The heir must be a foreign national permitted to acquire real estate in Turkey and must comply with the relevant restrictions.
• Individual and Country-Wide Restrictions: The heir must comply with the restrictions on acquiring real estate in Turkey. Otherwise, the heir will be required to transfer the property.
• Immediate Transfer of Property: If the heir is unable to acquire the property due to legal restrictions, the property must be immediately transferred. If the heir does not transfer it, the Ministry of Finance will put the property up for sale and pay the proceeds to the heir.

These regulations aim to protect Turkey’s security and economic interests while overseeing the inheritance of real estate by foreigners. Foreign heirs are advised to seek legal assistance from an inheritance lawyer in Turkey to navigate this process.

RIGHT TO ACQUIRE TURKISH CITIZENSHIP THROUGH PROPERTY PURCHASE

Turkey allows foreign nationals who meet specific criteria to apply for Turkish citizenship by acquiring real estate. The conditions for acquiring citizenship through purchasing real estate are as follows:

• Real Estate Acquisition of One Million Dollars or More: Foreign nationals can apply for Turkish citizenship by purchasing real estate valued at a minimum of one million dollars.
• Application Requirements: During the application process, the foreign national must declare that the property was purchased for this purpose. This declaration must be included in the official deed, and a note must be made in the title deed stating that the property will not be sold for three years.
• Condition to Not Sell the Property: The foreign national must commit not to sell the property for at least three years. If this condition is not met, the application for Turkish citizenship will be invalid.

This regulation aims to contribute to Turkey’s economic development and attract foreign investment. Obtaining Turkish Citizenship by real estate acquisition is an exceptional path available only to foreign nationals who meet the specified conditions.

IMPORTANCE OF LEGAL SUPPORT IN THE PROCESS FOR FOREIGNERS BUYING REAL ESTATE IN TURKEY

The acquisition of real estate by foreigners in Turkey is subject to legal restrictions and procedures outlined in Articles 35 and 36 of the Turkish Land Registry Law and relevant regulations. These regulations link the real estate acquisition by foreigners in Turkey to specific exceptions and prerequisites, and failure to meet these conditions may lead to severe penalties such as liquidation of the property or revocation of ownership. Therefore, foreigners buying property in Turkey must ensure compliance with these legal requirements to avoid legal complications

Article 36 of the Turkish Land Registry Law contains special provisions for foreign capital companies established in Turkey that want to purchase real estate in Turkey. Under this provision, foreign companies buying property in Turkey must obtain permission from the relevant governorship for real estate acquisition, and the properties must be used in connection with the company’s stated activities. Otherwise, the authorities may decide on the compulsory liquidation or disposal of the property, affecting property ownership in Turkey

In this context, especially for companies, the assistance of a commercial lawyer is crucial in minimizing legal risks for foreign investors buying property in Turkey. A corporate lawyer can provide consultancy on Turkish company law, permit procedures, and activity area compliance, especially in the acquisition process of real estate by companies in Turkey.

For foreign investors, legal risks in the real estate acquisition process in Turkey are not limited to the loss of ownership but may also lead to significant financial losses and prolonged legal disputes. Specific risks include:

• Presence of mortgages, liens, or annotations in the title deeds,
• The property being classified as a restricted area,
• Foreign investors’ inability to benefit from legal exceptions,
• Loss of co-owned properties through partition lawsuits,
• Difficulties in the eviction process of tenants in leased properties,
• Violation of procedural rules in sale agreements,
• Acquisition of property outside the company’s activity area.

Such situations may lead to the loss of property in Turkey or force the foreign investor to pay substantial compensation.

To mitigate these risks, a real estate lawyer in Turkey can examine the legal status of the property in detail, providing the buyer with comprehensive information on title records, mortgage status, and the property’s legal history.

The acquisition of real estate by foreigners in Turkey is a process that requires careful legal handling. Any misstep can lead to ownership loss and significant financial harm. Violating the legal limits set by the Land Registry Law and regulations may lead to severe penalties, including the mandatory sale of the property by the authorities. Therefore, it is essential for foreigners to seek legal support to manage the process in compliance with the law.