Buying property through a Turkish company
Foreign nationals quite often buy property through Turkish companies. Sometimes larger investors who wish to buy land and property set up limited companies in Turkey so they can conduct their business operations therein.
A foreign capital company (different from a ‘foreign company’) is set up according to Turkish Trade Law and enrolled in the Turkish Trade Registry. Therefore, the company is subject to Turkish law, while all or part of its capital belongs to a foreign national. This is therefore a limited company abiding by Turkish company law with foreign shareholders.
Sometimes, buying property through a Turkish company rather than registering the title deed to a person can be more advantageous. And, sometimes, it may be the only way a foreign national can own Turkish real estate in a particular area or for a particular type of property.
In 2003, The Foreign Direct Investment Law was passed, to encourage foreign investment and protect foreign investors’ rights. Foreign investors were therefore given the same rights and treatment as domestic investors.
How to set up a company in Turkey
The most efficient and cheapest way to establish a trading company for an individual is to set up a limited liability company in Turkey – this requires a minimum of two people. The two people can be foreign and one of them can be Turkish. The share structure of the company is divided into a 99.9% share for the main person (who is named as director) and 0.1% to the second person. Usually a lawyer steps in to hold the nominal share (how much percentage as that comes to 100%?!)
To begin the process you will need:
– preparation of the power of attorney
– copies of your passport
– two passport-sized photographs
Once the documents are received, the application will be processed. While it is all being processed, you will need to apply to the relevant authority for the necessary permissions. Articles of association and company books are prepared, together with an application to the tax authority. Once the company is established, the legal address is checked by tax officials before the final permission is granted. Usually lawyers complete this step.
Having registered the company, a second power of attorney is needed so your lawyer will now apply to the governor for permission to purchase real estate in Turkey before the Land Registry. The governor will also ask for military clearance.
Once the governor grants permission, an application is made before the Land Registry together with the seller. The Land Registry will contact the city to ask about the Turkish property’s current status.
Costs of setting up and maintaining a company in Turkey
The set up costs are around £1,500 with annual fees of £1,000 including registry submission and accounting fees.