Turkey: Brand New Regulation on Real Estate Acquisitions in Turkey by Foreign-Owned Turkish Companies

For almost a decade, real estate has undoubtedly been one of the hottest foreign investment sectors in Turkey. Needless to say that the enactment of liberal laws/regulations, which allow investors to acquire real estates much more conveniently than before, has played a major role in the latter.

In Turkey, a body of laws composed of (i) Land Registry Law1, (ii) Foreign Direct Investment Law2 and (iii) Military Forbidden Zones and Security Zones Law3 should collectively be taken into account as regards any real estate acquisition in which foreign individuals or legal entities are directly or indirectly involved. Besides, the regulations issued by the relevant ministries in accordance with the afore-mentioned laws should be considered. The partial annulment of some of the said laws by the Turkish Constitutional Court and frequent amendments to the relevant regulations have unfortunately caused the matter of "real estate acquisition by foreigners in Turkey" to be quite complicated.

Before continuing to read this article, one should remember that a foreign-related real estate acquisition in Turkey may be realized in 3 (three) different manners:

  1. The acquiring party may be a foreign individual (who does not have Turkish nationality),
  2. The acquiring party may be a foreign legal entity (which is incorporated outside of Turkey subject to the applicable foreign law), or
  3. The acquiring party may be a Turkish company (incorporated in Turkey in accordance with Turkish law) whose shares are partly or wholly owned by foreign individuals and/or legal entities ("Foreign-owned Company").

While the first two possibilities mentioned above are called "direct acquisitions", the third one is an "indirect acquisition" because although the acquiring party is a Turkish company, the foreign nationality of its shareholders makes the transaction "foreign-related" and thus subject to approval by official bodies. In order to not cause any confusion to its readers, this article will only discuss indirect acquisitions which highly interest foreign investors.

The essential provision regarding indirect real estate acquisitions in Turkey is Article 36 of Land Registry Law. It stipulates that Turkish companies4 which are established or subsequently acquired by foreign investors may acquire (i) the ownership of real estates or (ii) rights in rem on real estates in order to carry out their business activities set forth in their Articles of Association. Details of the acquisition process are not indicated because Article 36, in its last paragraph, makes reference to a regulation to be issued by the relevant ministries considering the body of laws mentioned in the second paragraph of this article. The said regulation used to be "Regulation on Acquisition of Real Estate by Foreign-Owned Companies" ("the Regulation"). It was published in the Official Gazette No. 27052 dated 12 November 2008. Since it entered into force, the Regulation has been subject to justifiable criticism because it lacked the necessary mechanisms for speeding up acquisition processes. Considering such shortcomings of the Regulation, the Ministry of Public Works has just issued a new regulation governing the matter: "Regulation on Acquisition of Real Estate Ownership and Limited Rights in Rem by Foreign-Owned Companies" ("the New Regulation"). The New Regulation, which expressly abrogates the Regulation, was published in the Official Gazette No. 27721 dated 6 October 2010 and entered into force on the same day.

Below are listed the main features of the New Regulation and its superiorities over its predecessor;

  • "Foreign investor", which comprises foreign individuals, foreign legal entities and also international organizations, has been defined in the New Regulation. One should bear in mind that the acquiring party (in real estate acquisitions subject to the New Regulation) is not a foreign investor, but a Turkish company partly or wholly owned by a foreign investor. In this article, such companies are called "foreign-owned companies".
  • All applications for real estate acquisitions are directly made to the governorship of the city where the real estate to be acquired is located. Foreign-owned companies do not have to deal with any official authority other than the governorship. The governorship is responsible for coordinating the applications with other official authorities such as the Armed Forces and police departments, which saves applicants from the burden of traveling back and forth between different authorities.
  • The documents required for applications are exhaustively listed. Article 4 of the New Regulation particularly stipulates that applicants cannot be requested to submit any additional document.
  • The New Regulation's feature which would be most embraced by foreign investors is probably the "accelerative mechanism" preventing applications from dragging on. Within the framework of its application coordination, the governorship holds correspondences with other authorities in order for them to declare their views on the real estate acquisition subject to application. At the time when the Regulation used to be in force, the non-responsiveness of a specific authority was delaying applications for months. The New Regulation has permanently solved this problem as follows: In the case where a certain authority does not reply the governorship in 15 (fifteen) days, the governorship shall go ahead with the application assuming that the said authority has approved it.
  • Article 3 of the New Regulation has introduced a new 10% threshold as regards publicly-owned companies. Accordingly, the New Regulation shall not be applied as long as less than 10% of the share capital of a public company (having real estates in Turkey) is owned by foreign investors. If this provision had not been foreseen in the New Regulation, public companies would have been obliged to make constant applications for real estate acquisition because the sale of their one single share to a foreign investor would trigger the implementation of the New Regulation. On the other hand, considering that share certificates (representing shares) are exchanged at the Istanbul Stock Exchange on instant basis, it would be literally impossible to determine whether the 10% threshold is exceeded at a certain time5.
  • In accordance with the New Regulation, acquisition by a foreign-owned company of a mortgage right (or another limited right in rem) is very simplified. In the case of mortgage, there is no need to apply to the governorship. The foreign-owned company directly applies to the relevant land registry together with a few documents. This provision is vital for foreign-owned companies (e.g. banks) seeking proper security in return for loans extended.
  • In case an application is approved, the governorship issues a petition addressed to the land registry where the real estate is located and states that the foreign-owned company is permitted to acquire the real estate right subject to application. Upon request, such petition is delivered by hand to the foreign-owned company, which further speeds up the process.
  • Finally, the possibility for a foreign investor to totally circumvent the New Regulation is also worth to be mentioned in this article. Let us illustrate it by way of an example: A, which is a foreign company, establishes B, a Turkish company in Turkey. Subsequently, B establishes C, again a Turkish company in Turkey. In other words, C is indirectly owned by A. In this scenario, although any real estate acquisition by B is subject to the New Regulation (because it is a foreign-owned company), real estate acquisitions by C are not subject to any limitation because the owner of C is B which is a Turkish company. There is nothing in the New Regulation preventing foreign investors from using the above-described structure, which may be defined as a "dramatic insufficiency" of the New Regulation.


1. Published in the Official Gazette dated 29 December 1934 and numbered 2892.

2. Published in the Official Gazette dated 17 June 2003 and numbered 25141.

3. Published in the Official Gazette dated 22 December 1981 and numbered 17552.

4. A Turkish company means a company incorporated in Turkey in accordance with Turkish law.

5. Accordingly, we are of the view that the implementation of the said threshold for publicly-traded shares is simply impracticable. The threshold would only make sense in case a public company's non-public shares are sold to a foreign investor.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.