Introduction
In recent years, Türkiye has become an attractive real estate market for foreign investors. Its strategic location, rich cultural heritage, and economic opportunities make Türkiye a desirable destination for investment. However, the process of purchasing real estate and acquiring citizenship in Türkiye involves certain legal regulations, making it essential to manage these processes correctly.

1 – Real Estate Acquisition and Restrictions for Foreign Individuals in Türkiye

The acquisition of real estate by foreign individuals in Türkiye is governed by specific limitations outlined in the 35th article of the Land Registry Law. The main restrictions that foreign individuals should consider are as follows:

• Land Limits: Foreign individuals can own up to 30 hectares of land throughout Türkiye.
• Military Restricted Zones: Foreigners are prohibited from purchasing real estate in military restricted zones and security zones.
• Total Foreign Ownership: The total area of real estate owned by foreigners in a district cannot exceed 10% of the district’s total area.

Key Considerations
Foreign investors must take into account several important factors when purchasing real estate in Türkiye:

• Military and Security Zones: It is crucial to check whether the property to be purchased is located within a military restricted zone or a security zone. This check is conducted by the General Directorate of Land Registry and Cadastre. If the property is not within such zones, the sale can proceed smoothly.
• Title Deed Transfer: In Türkiye, real estate ownership is officially transferred to the buyer upon the delivery of the title deed. Sale agreements or promises to sell may be misleading and can lead to significant losses if not handled properly.
• Tax Obligations: Foreign investors who purchase real estate in Türkiye are subject to certain tax obligations, including property tax, title deed fees, and income tax on gains from the sale of real estate.

2 – Real Estate Acquisition and Restrictions for Foreign Legal Entities in Türkiye

The acquisition of real estate by foreign companies in Türkiye is regulated under the Foreign Direct Investment Law No. 4875. According to this law, foreign companies can acquire real estate in Türkiye, but they must adhere to certain conditions:

• Establishment Requirement: Foreign companies must acquire real estate through a company established in Türkiye under the provisions of the Turkish Commercial Code. A foreign-capitalized company established in Türkiye is treated as a domestic company and has the right to acquire real estate.
• Activity Area Requirement: Foreign companies can only acquire real estate related to the activities specified in their articles of association.

Exceptions and Restrictions
There are certain exceptions and restrictions regarding the acquisition of real estate by foreign-capitalized companies:

• Military Restricted Zones and Security Zones: Like individuals, foreign companies are prohibited from acquiring real estate in military restricted zones and security zones.
• Agricultural Lands: The acquisition of agricultural lands, which are of strategic importance, is restricted for foreign companies.

3 – Foreign Individuals as Cooperative Members

Foreign individuals are allowed to become members of cooperatives in Türkiye under the Cooperatives Law, provided that no restrictions are imposed by the cooperative’s articles of association. In the absence of any such restrictions, foreign individuals can freely become members of cooperatives.

Managerial and Supervisory Restrictions
However, according to articles 56 and 65 of the Cooperatives Law, foreign individuals cannot serve as managers or supervisors within cooperatives. Apart from these restrictions, foreign individuals can become cooperative members and have their rights protected under the general assembly and the articles of association.

Investment Opportunities
Cooperatives in Türkiye offer various investment opportunities. For example, investing in a “tourism development cooperative” or a “real estate management cooperative” can provide economic returns and allow investors to benefit from designated areas related to the cooperative’s activities.

4 – Acquisition of Turkish Citizenship and Relationship with Cooperatives

One of the key ways for foreigners to acquire Turkish citizenship is through the purchase of real estate. Currently, the acquisition of a property valued at 400,000 USD or more qualifies for a citizenship application.

Cooperative Membership and Citizenship
However, payments made through cooperative membership are not considered as real estate purchases and therefore do not qualify for citizenship. According to Article 20 of the Regulation on the Implementation of the Turkish Citizenship Law, certain conditions must be met for citizenship acquisition:

• Purchase of a property valued at least 400,000 USD or its equivalent in foreign currency,
• A commitment to not sell the property for three years, which is recorded in the title deed,
• Purchase of a property with floor ownership or floor easement, valued at least 400,000 USD or its equivalent in foreign currency, and registration of a commitment in the land registry to not transfer or cancel the title deed for three years.

Since these conditions cannot be met through cooperative membership, citizenship cannot be acquired through this route.

5 – Payment and Security for Cooperative Membership

The method of payment and participation in cooperatives can be determined by the cooperative’s articles of association and the decisions of the general assembly. A cooperative member, whether through an installment or dues system or a lump-sum payment, will have their rights secured by the cooperative membership certificate.

6 – Challenges and Solutions

Foreigners seeking to acquire real estate and citizenship in Türkiye may encounter various challenges, such as bureaucratic complexities, language barriers, and fraud. Here are some suggested solutions:

• Bureaucratic Barriers: The bureaucratic process involved in real estate acquisition and citizenship applications can be discouraging for foreign investors. It is important to make these processes more transparent and straightforward, particularly by enhancing online services.
• Language Barrier: Many foreign investors do not speak Turkish, which can lead to difficulties in title deed transactions and citizenship applications. Improving language services for foreign investors, offering multilingual documents, and increasing specialized guidance services can help alleviate this issue.
• Fraud: There is a risk of fraud among foreign investors. To mitigate this risk, it is essential to work with reliable and experienced lawyers. Ensuring that all legal procedures are carefully followed at each stage of the real estate acquisition process will help minimize the risk of fraud and protect the investor’s rights.

7 – Comparative Analysis: Real Estate Investment for Foreigners in Türkiye and Other Countries

To better understand the opportunities Türkiye offers to foreign investors, it is beneficial to compare Türkiye with other countries that have similar economic profiles and geographical locations.

1. Minimum Investment Amount

• Türkiye: 400,000 USD (for citizenship)
• Portugal: 350,000 EUR (Golden Visa program)
• Greece: 250,000 EUR (Golden Visa program)
• Spain: 500,000 EUR (Golden Visa program)

Analysis: Türkiye’s minimum investment amount is mid-range compared to other popular Golden Visa programs in Europe. Portugal and Greece have lower investment requirements, while Spain’s requirement is higher. Türkiye’s threshold of 400,000 USD can be seen as an attractive option, especially when compared to the European markets.

2. Citizenship/Residency Process

• Turkey: Direct citizenship (within 3-6 months, though this period may be extended due to security checks)
• Portugal: Permanent residency after 5 years, citizenship application after 6 years
• Greece: Citizenship application after 7 years
• Spain: Citizenship application after 10 years

Analysis: Turkey stands out by offering direct citizenship through investment. However, in practice, the process can be delayed due to security checks and additional procedural requirements. On the other hand, in Portugal, Greece, and Spain, the citizenship process takes longer and initially provides only residency. While Turkey remains an advantageous option for investors seeking a quicker citizenship process, it should be noted that practical delays may extend the overall timeline​.

3. Restrictions on Real Estate

• Türkiye: Restrictions in certain areas
• Portugal: No restrictions
• Greece: Restrictions in border areas
• Spain: No restrictions

Analysis: While Türkiye has specific restrictions on foreign ownership in certain areas, Portugal and Spain do not impose such restrictions. Greece, on the other hand, has restrictions in border areas. Investors should consider regional restrictions when making their decisions.

4. Tax Advantages

• Türkiye: No property tax exemption, but low rates
• Portugal: 10-year tax exemption on certain incomes
• Greece: Standard tax rates apply
• Spain: Standard tax rates apply

Analysis: Türkiye does not offer special tax exemptions for real estate investments, but it generally has low property tax rates. Portugal offers a 10-year tax exemption on certain incomes, making it a more attractive option from a tax perspective. Greece and Spain apply standard tax rates.

5. Economic and Political Stability

• Türkiye: Economic fluctuations present, but with high growth potential
• Portugal, Greece, Spain: More stable due to EU membership, but slower growth

Analysis: Türkiye presents higher risks and potential returns due to its economic fluctuations, while Portugal, Greece, and Spain offer more stable economic environments due to their EU membership. However, these EU countries generally experience slower growth compared to Türkiye.

6. Geographical Location and Tourism Potential

• Türkiye: A bridge between Asia and Europe, rich in history and culture
• Portugal, Greece, Spain: Free movement within the EU, developed tourism infrastructure

Analysis: Türkiye’s unique geographical position and rich cultural heritage are major attractions for investors. In contrast, Portugal, Greece, and Spain benefit from free movement within the EU and have highly developed tourism infrastructures, making them strong competitors in attracting real estate investments.

7. Comparative Analysis: Real Estate Investment for Foreigners in Türkiye and Other Countries

Türkiye continues to be an attractive real estate market for foreign investors. As of 2022, property sales to foreigners reached 67,490 units, marking a 15.2% increase compared to the previous year. These sales accounted for approximately 4.5% of all real estate transactions in the country. The cities with the highest sales to foreigners were Istanbul, Antalya, and Mersin, which together represented 75.7% of all foreign property purchases (Antalya Homes) (Imtilak Real Estate).

Notably, Russian citizens were the top buyers in 2022, with their purchases increasing by 203.2%. This surge highlights the growing popularity of Türkiye’s strategic location and economic opportunities among foreign investors.

8 – Conclusion

The acquisition of real estate and citizenship by foreigners and foreign-capitalized companies in Türkiye significantly contributes to the country’s economy. However, it is crucial that the legislation and practices in this area are clear and accessible to foreign investors. The complexity of the process and the challenges posed by local legal regulations can create difficulties for investors.

At this point, working with a lawyer who can guide the process, ensure that all necessary documents are accurately prepared, and provide professional advice on issues such as title deed transactions, tax obligations, and citizenship applications can offer significant advantages for foreign investors. Legal assistance helps in correctly understanding and complying with the legislation, speeding up the process, and minimizing potential mistakes.

The process of real estate acquisition and citizenship for foreign investors in Türkiye requires careful attention to detail. Proper guidance and professional support can ensure that this process is completed smoothly and successfully. It is hoped that this article will serve as a helpful resource for foreign investors seeking to navigate the legal landscape in Türkiye.