REAL ESTATE ACQUISITIONS OF FOREIGN CAPITAL COMPANIES

The Regulation prepared on the implementation of Article 36 of the Land Registry Law No. 2644, which regulates the procedures and principles regarding the Acquisition of Property by Foreign Capital Companies, amended by the Law No. 6302 published in the Official Gazette dated 18.05.2012 and numbered 28296, was published in the Official Gazette dated 16.08.2012 and numbered 28386. It was published. The regulation will enter into force on 18.08.2012.

Article 2 of the Law No. 6302 Amending the Land Registry Law and the Cadastre Law and article 36 of the Law No. 2644 were amended, and the acquisition of real estate by foreign capital companies was rearranged.

In the amended article 36 of the said law, foreign national real persons, legal persons established in accordance with the laws of foreign countries and international organizations, with the exception of persons within the scope of article 28 of the Turkish Citizenship Law dated 29/5/2009 and numbered 5901, shall be entitled to fifty percent or more Companies with legal personality established in Turkey, in which they own or have the authority to appoint or dismiss the majority of the persons who have the right of management, are considered as “foreign capital” companies. It was stipulated that these companies could acquire immovable property or limited real rights only in order to carry out the activities specified in their articles of association. Companies with foreign capital outside this scope will be able to acquire immovable property and limited real rights within the framework of the provisions to which domestic capital companies are subject.

In accordance with the aforementioned law and regulation

1. Only foreign investors (real person with foreign citizenship who establishes a new company in Turkey or becomes a partner in an existing company through acquisitions other than stock exchanges or acquisitions that provide at least 10% of the shares or voting rights in the stock exchanges, foreign legal persons, international organizations established in accordance with the laws of the countries), companies in which they have fifty percent or more shares, or,
2. Companies in which foreign investors have the authority to appoint or dismiss the majority of the directors, with a shareholding ratio of less than fifty percent,
3. In case the foreign capital companies within the scope of Article 36 of the Land Registry Law No. 2644 are direct or indirect partners of another company established in Turkey, the real estate ownership of the companies (association) and the acquisition of limited same rights, the final shareholding rate of the foreign investor in the partner company is fifty percent. or more, are companies with foreign capital within the scope of Article 36 of the Land Registry Law No. 2644, and companies with foreign capital other than the companies mentioned above will be able to acquire and use immovable property and limited real rights on equal terms with domestic capital companies.

Companies with Foreign Capital within the Scope of Article 36 of the Land Registry Law No. 2644

Pursuant to the regulation, companies with legal personality established in Turkey, in which foreign investors who want to acquire real estate in Turkey hold 50% or more of jointly or separately a share of, or do not have this share, but have the power to appoint or dismiss the majority of the directors, as specified in the regulation. They will need to apply to the Provincial Planning and Coordination Directorate of the Governorship where the real estate is located.

The governorship, within three working days following the application for real estate acquisition, sends the title deed registration information and coordinated diameter sample of the real estate to the General Staff or the commands it will authorize, whether the real estate remains within the military forbidden zone, military security zone or the region determined within the framework of Article 28 of the Law No. 2565, will request to notify within fifteen days. If no response is given within this period, it will be decided that the real estate in question is not within the specified areas and action will be taken.

The governorship will request the provincial police directorate or the provincial gendarmerie command within three business days following the application to notify within fifteen days whether the immovable property remains in the private security zone. If no response is given within this period, it will be decided that the real estate in question is not in the private security zone and action will be taken.

In case it is reported that the immovable is in the military forbidden zone, military security zone or the zone determined within the framework of Article 28 of the Law No. 2565, the Governor's Office sends a copy of the other application documents to the General Staff or to the commandments to be authorized within three working days following the said notification, and the property acquisition request in terms of the country's security. If there is no response within this period, the property acquisition request will be judged to be appropriate in terms of national security and action will be taken.

If the result of the application is positive or deemed positive, the Governorship will give written information to the company or subsidiary and the land registry directorate within three working days for the registration process. The registration request will have to be registered within six months from the notification of the written information to the company or affiliate. If this period is exceeded, the application for real estate acquisition will be renewed.

OBLIGATION TO NOTIFY ANY CHANGES OF PARTNERSHIP STRUCTURE THROUGH THE TRANSFER OF SHARES

The company, which is within the scope of this Regulation as a result of the share transfer, will notify the Ministry of Economy within one month following the share transfer within the framework of Article 5 of the Foreign Direct Investment Law Implementation Regulation published in the Official Gazette dated 20/8/2003 and numbered 25205. The notification obligation applies to subsidiaries only if they own real estate.

THE USE OF IMPROVEMENTS OBTAINED WILL BE INSPECTED AND THE IMMOVABLE LIQUID CAN BE LIQUIDED IF I USE IT FOR NON-PURPOSE.

Whether the immovables or limited real rights acquired within the scope of the regulation and notified to the governorship by the General Directorate of Land Registry and Cadastre within the framework of the fourth paragraph of Article 11 are used within the scope of the activities specified in the articles of association of the company or subsidiary will be evaluated by the Commission.

If, as a result of the examination, it is determined that the immovable or limited real right is used in violation of the provisions of this article, this situation shall be notified in writing to the company or affiliate within three working days. It is obligatory to give a written response to the notification within thirty days. Otherwise, the content of the notification will be deemed to have been accepted. In case of detection of use contrary to the scope of activity specified in the main contract, a six-month period may be granted for once, in order to adapt the use to the field of activity specified in the main contract.

If it is determined that immovable or limited real rights have been acquired or used in violation of the provisions of this Regulation, the liquidation procedures of the acquired immovable or limited real rights may be initiated.

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