According to the ministry for environment and urbanisation the bill defines separate procedures for the possession of real estate by three groups; individual foreign buyers, foreign companies and companies that are wholly or partly owned by foreign investors.
It will clarify rights for ownership by foreign buyers and foreign companies and introduce important exemptions for property ownership for companies with foreign investors, including mortgage exemptions, exemption for immovable assets that were acquired in the course of merger and demerger and exemption for immovable assets that were put up for sale.
‘Wasting time on unnecessary procedures will be avoided,’ said a spokesman for the environment and urbanisation ministry.
Under existing regulations it isn’t clear whether a company should be classified as local or foreign and therefore which legal procedures they are subject to. In cases where a foreign company has bought shares in a Turkish company, or a foreigner has even a 1% share in the company, there are likely to be changes in the procedures the company should follow.
Currently if 51% of a company’s administrative body consists of foreigners, it is defined as a foreign company. Companies in which the shares of foreign partners are less than 50% are categorised as foreign capitalised companies which are treated differently from foreign companies.
Under new regulations companies that are funded by foreign capital will no longer be dealt with under the procedures of the 36th Article of the Land Registry Law, which regulates the position of foreign investors in Turkey.
The new bill will also restore the amount of land that can be owned by a foreign buyer to a maximum of 30 hectares. It had been reduced to two and a half hectares.
Foreign companies seeking to purchase more than 30 hectares of land will be permitted to own up to 60 hectares. However, this increase will be conditional on them beginning their relevant project within two years. If a foreign company fails to begin its project within this two year period, the real estate they have purchased will be expropriated.
