Advantages of Buying Property by a Company in Turkey in 2025

As Istanbul’s vibrant economic landscape continues to flourish, 2025 presents an opportune moment for astute investors to consider property acquisition in Turkey. While individual property ownership remains a popular choice, purchasing real estate through a company offers a unique blend of strategic advantages, particularly for foreign investors.

At Akkas & Associates Law Firm, a top-notch full-service law firm located in Istanbul, providing unparalleled legal services since 1992, we understand the intricate nuances of Turkish real estate and corporate law. This comprehensive guide delves into the compelling reasons and essential considerations for acquiring property via a legal entity in Turkey.

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The Strategic Edge: Why Companies Lead the Way in Turkish Property Investment

Investing in Turkish real estate through a corporate structure is far more than a mere formality; it’s a strategic decision that can yield significant long-term benefits. This approach is particularly advantageous for those seeking to maximize tax efficiency, secure asset protection, and streamline future property management or transfer processes.

1. Enhanced Legal Protection and Asset Segregation

One of the foremost benefits of acquiring property through a company is the inherent legal protection it offers. A limited liability company (LTD. Şti.) or a joint-stock company (A.Ş.) in Turkey acts as a separate legal entity from its shareholders.

This means that if the company faces financial difficulties or legal disputes, the personal assets of the shareholders are typically shielded. Creditors can only claim against the company’s assets, not the personal wealth of its owners. This separation of assets provides a crucial layer of security, making it a cornerstone for serious investors.

2. Significant Tax Efficiencies and Deductions

Turkish tax regulations offer compelling incentives for corporate property ownership. Companies can often benefit from various tax deductions and exemptions that are not available to individual buyers.

• Corporate Tax Rate: Rental income generated from properties owned by a company is subject to corporate tax, which, depending on the current legislation and specific circumstances, can be more favorable than personal income tax rates, especially for higher rental incomes. As of January 2025, the standard corporate income tax rate in Turkey is 25%, with a domestic minimum tax regime ensuring a minimum of 10% on corporate income before certain exemptions.
• Deductible Expenses: Companies can deduct a wide array of expenses related to property ownership and management from their taxable income. These include maintenance costs, renovation expenses, property management fees, and even mortgage interest. This ability to deduct operational costs significantly reduces the overall taxable profit.
• VAT Reclaim: In specific scenarios, particularly if the property is acquired for commercial use and the company is VAT registered, it may be possible to reclaim Value Added Tax (VAT) paid on the property purchase. This can lead to substantial savings, which are generally not accessible to individual purchasers.
• Capital Gains Tax Benefits: When a property held by a company is sold, any capital gains are subject to corporate tax. However, if the property has been held for a certain period (typically two years), a significant portion of the capital gain may be exempt from taxation, offering a notable advantage compared to individual capital gains tax implications.

3. Simplified Property Transfer and Succession Planning

Transferring ownership of property held by a company is often much simpler than transferring individually owned property. Instead of undertaking a complex property deed transfer process, the ownership of the property can be transferred by selling the shares of the company.

This streamlines the process, reduces associated fees, and can be particularly advantageous for succession planning or when bringing in new investors. It offers a high degree of flexibility in managing and divesting real estate assets.

4. Increased Investment Scalability and Business Flexibility

For investors looking to build a portfolio of properties or engage in larger real estate development projects, a corporate structure provides unparalleled scalability. Companies can more easily acquire multiple properties, manage a diverse portfolio, and benefit from economies of scale in property management and maintenance.

Furthermore, a company structure facilitates joint ventures and partnerships, enabling investors to pool resources and expertise for more ambitious undertakings.

5. Navigating Restrictions for Foreigners (in specific cases)

While Turkish law has largely eased restrictions on foreign individual property ownership, in some highly specific circumstances or for certain types of land/properties, a company structure can offer a smoother path.

Companies established under Turkish law, even with foreign capital, are considered Turkish legal entities, which can sometimes bypass certain limitations that might apply to foreign individuals, especially concerning agricultural lands or properties in specific zones.

6. Enhanced Credibility and Professionalism

Operating through a formal company structure lends an air of professionalism and credibility to your real estate ventures. This can be beneficial when seeking financing, engaging with contractors, or dealing with various governmental agencies. It presents a more organized and legitimate front, potentially opening doors to larger opportunities and more favorable terms.

7. Greater Ease in Obtaining Financing

Banks and financial institutions often prefer lending to established corporate entities over individuals, especially for significant property investments. A company’s structured financial records and clear business purpose can make it easier to secure loans and favorable financing terms for property acquisitions and development projects in Turkey.

The Essential Steps for Buying Property Through a Company in Turkey (2025)

While the benefits are substantial, the process of buying property through a company in Turkey requires careful planning and expert legal guidance. Here’s a general overview of the key steps:

1. Company Formation: The first step involves establishing a legal entity in Turkey. The most common choice for foreign investors is a Limited Liability Company (Limited Şirket – LTD. Şti.) or a Joint Stock Company (Anonim Şirket – A.Ş.). This process involves drafting Articles of Association, obtaining a tax identification number, registering with the Trade Registry Office, and depositing the minimum required capital into a corporate bank account. Our experienced Turkish Business Lawyers at Akkas & Associates Law Firm can provide comprehensive assistance with company incorporation and structuring.
2. Due Diligence: Once the company is established, thorough due diligence on the prospective property is crucial. This includes verifying the property’s title deed (Tapu) for authenticity, checking for any existing liens, mortgages, or encumbrances, and ensuring compliance with zoning and building regulations. A comprehensive legal review will also confirm that the property’s use aligns with the company’s stated activities in its Articles of Association, as required by Turkish law for foreign-invested companies. Our Turkish Real Estate Lawyers specialize in conducting meticulous due diligence to safeguard your investment.
3. Property Valuation: A mandatory appraisal report is required for foreign purchasers, whether individuals or companies, to ascertain the property’s market value.
4. Sales Agreement: A detailed sales agreement must be drafted and signed, outlining the terms of the purchase, payment schedule, and any specific conditions. It is highly advisable to have this agreement reviewed by legal counsel to protect your company’s interests.
5. Tax and Fee Payments: Various taxes and fees are payable during the property transfer process, including stamp duty and land registration fees.
6. Title Deed Transfer: The final step involves the official transfer of the title deed at the Land Registry Directorate (Tapu ve Kadastro Müdürlüğü). Both parties or their legal representatives must be present for this process.

Important Legal Considerations in 2025

• Restrictions on Military and Security Zones: Companies, like individuals, cannot acquire property within military forbidden zones and security zones.
• Purpose of Acquisition: For foreign-invested companies, the acquisition of immovable property must generally align with the company’s stated field of activity in its Articles of Association.
• Reporting Requirements: Companies with foreign investment that acquire real estate must report this to the relevant Governorate Provincial Planning and Coordination Directorate.
• Limits on Land Area: While typically applying to individuals, there are also limits on the total land area a company with foreign investment can own in a specific district, generally not exceeding 10% of the total privately owned area in that district.

FAQs: Buying Property by a Company in Turkey

Q1: Can a foreign company directly buy property in Turkey without establishing a Turkish subsidiary? A1: Generally, commercial companies established abroad with legal personality may acquire property in Turkey only in exceptional cases stipulated by international conventions or special provisions. For most practical purposes, establishing a Turkish company (e.g., LTD. Şti. or A.Ş.) is the standard and more straightforward route for foreign investors to acquire property.

Q2: What is the minimum capital requirement for establishing a company in Turkey to buy property? A2: For a Limited Liability Company (LTD. Şti.), the minimum capital requirement is currently TRY 50,000. For a Joint Stock Company (A.Ş.), it’s TRY 250,000, with at least 25% paid up front. These figures are subject to change based on Turkish Commercial Code amendments.

Q3: Are there any restrictions on the type of property a company can buy? A3: While companies can acquire various types of property (residential, commercial, land), the acquisition by foreign-invested companies generally needs to be for the purposes of conducting the activities specified in their Articles of Association. There are also restrictions on purchasing property in military and security zones.

Q4: How long does the process of establishing a company and then buying property typically take? A4: Establishing a company can take a few days to a couple of weeks, depending on the completeness of documents and the speed of the Trade Registry Office. The property purchase process itself, after company establishment, can range from a few days to several weeks, depending on due diligence, negotiations, and scheduling at the Land Registry Office.

Q5: What are the ongoing obligations for a company owning property in Turkey? A5: Companies owning property in Turkey must adhere to Turkish commercial and tax laws. This includes maintaining accurate financial records, filing annual tax returns, paying corporate income tax on profits (including rental income), and adhering to any reporting requirements related to foreign investment.

Q6: Can a company obtain Turkish Citizenship by Investment through property purchase? A6: Turkish Citizenship by Investment programs typically require the property to be purchased by an individual. While a company owning property offers many advantages, it generally does not directly qualify for citizenship by investment for the shareholders, as the investment criteria usually specify direct individual ownership. However, individual shareholders may still qualify for residence permits based on their investment.

Q7: Is it possible for a company to buy agricultural land in Turkey? A7: Acquisition of agricultural land by foreign entities, including companies with foreign capital, is subject to specific regulations and restrictions. The primary purpose of the acquisition must align with the company’s agricultural activities and be in line with national agricultural policies. Expert legal advice is crucial for such acquisitions.

Contact us for Buying Property by a Company in Turkey

In conclusion, buying property through a company in Turkey, especially in the promising landscape of 2025, offers a sophisticated and advantageous investment pathway. From robust asset protection and significant tax efficiencies to streamlined management and enhanced credibility, the corporate route provides a powerful framework for strategic real estate endeavors.

For comprehensive guidance on Turkish company formation, Turkish real estate law, or any aspect of buying property by a company in Turkey, contact Akkas & Associates Law Firm. Our experienced team is ready to provide tailored legal solutions to ensure your investment success in Turkey.

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