Numerous restrictions on real estate acquisitions by foreigners in Turkey had been practiced due to the political risks, security, protection and similar reasons. There has been a significant amendment on the restrictions for real estate acquisitions of foreigners in Turkey through the enactment of the Law on Amendments on Land Registry Law and Cadastral Law numbered 6302 in 2012.

Article 36 of the Land Registry Law numbered 2644 (the “Law”) and the Communiqué published in the Official Gazette dated 16 of August 2012 numbered 28386 (the “Communiqué”) determines the conditions of immovable acquisitions in Turkey by Turkish entities having foreign capital. There are certain conditions where companies are assumed as company with foreign capital and subject to Article 36 of the Law:

– If 50% or more shares are owned by foreign real persons, companies incorporated in accordance with the laws of foreign countries, or international institutions; or

– If foreign real persons, companies incorporated in accordance with the laws of foreign countries, or international institutions have the right to assign or depose the majority of the persons having the management rights in that company established under Turkish laws.

The Turkish entities having foreign capital which meet any of the above conditions can acquire ownership of a real property only if such acquisition is in relation to scope of activities stipulated in its articles of association. However, acquisition of a real property in a Military Restricted Zone, Military Security Zone or a Strategic Zone is subject to the approval of the commanderships which are authorized by the General Staff. The acquisition is also subject to the Governorate’s approval, where the immovable resides, if the immovable is in a special security zone. Therefore, while acquiring the real estate, certain approval process should be followed.

In case a foreign capital Turkish entity does not fall into the scope of article 36 above (i.e. in case the foreign share is less than %50) then such entity will have equal standing with the local Turkish entities.

As a result of the changes introduced to the Law which have reduced the restrictions regulated for real estate acquisitions by foreigners and the remarkable geographical position of Turkey; Turkey became one of the most popular countries that the foreign investors realize their real estate investments.