Foreigners and Property in Turkey
|Date Added: December 19, 2013 06:15:15 PM|
|Buying property in any country can be a difficult process. This is particularly true in Turkey where the bureaucratic system is a bit complicated and legal regulations may be amended frequently.|
However, buying property in Turkey has become an important investment way for foreigners, some in the form of a second home; others as an investment. Out of over 52,000 properties currently owned by foreign nationals in Turkey, over half belong to people of German, Russian and English citizenship. These properties are concentrated in the Mediterranean region in southern Turkey, mainly Antalya; Aegean region in western Anatolia, in the coastal area of Bodrum, Kusadasi, Izmir, Cesme, as well as Istanbul.
The reciprocity principle The reciprocity principle is widely referred while discussing property issues. According to this principle, if Turkish citizens can buy property in a foreign country, the nationals of that same country are also allowed to buy property in Turkey. So far, this principle has been incorporated in transactions related to real foreign persons and companies incorporated abroad, but not to companies established by foreign shareholders in Turkey.
Thus, it became common that foreigners acting as foreign investors in Turkey establish a company within the framework of the Turkish Commercial Code, especially after 2003, when the new 4875 FDI law was incorporated. In these cases, the company is treated as a Turkish legal entity which may freely acquire real estate within the territory of Turkey. Regardless of the citizenship of the shareholders, a foreign capital company can be established in one week and if the company in question decides to acquire real estate in Turkey, it successfully bypasses the reciprocity principle, which normally applies to real foreign persons. Mainly because the reciprocity principle is ignored in the above mentioned cases, property sales to foreigners had become the focal point of the recently heated discussions in Turkey.