ACQUISITION OF AGRICULTURAL LAND BY FOREIGN NATIONALITIES AND TURKISH COMPANIES WITH FOREIGN SHAREHOLDERS
The persons with foreign nationalities and the Turkish Companies with foreign shareholders (“foreigners”) are able to acquire all kinds of real estates (House, Workplace, Land, Agricultural land). However, when foreigners acquire lands (for which the legal processes are not completed for any kind of construction) and agricultural lands, they need to go through some additional procedures compared to other types of real estates. These additional procedures are shortly; getting approval from relevant government entities for a project to implement on the land or the agricultural land and putting an annotation to the official record of the land committing that “The project will be submitted for the approval of the relevant Ministry within 2 years”.
IS THE ACQUISITION OF REAL ESTATE AS AGRİCULTURAL LAND SUBJECT TO PERMISSION?
Yes. Unlike the lands that are suitable for construction as per the relevant zoning plan, the purchase of agricultural lands by foreigners is subject to the approval of the relevant Provincial Directorate of Agriculture and Forestry.
The proposed project will be investigated by a commission established by the relevant Provincial Directorate of Agriculture and Forestry. If the approval of the said entity is obtained, it is a must to put an annotation on the official record of the agricultural land at the relevant land registry office committing that an “agricultural project’’ will be carried out on that agricultural land.
IS THERE A RESTRICTION FOR THE SURFACE AREA OF THE AGRICULTURAL LAND?
Yes. The limitations are determined by the relevant Ministry and changes from region to region.
WHO CAN MAKE THE APPLICATION?
A foreign national or the legal representative of the foreign national can make the applications for the abovementioned processes. However, it is required by law that the foreigner applicant must show/appoint a Turkish Citizen as a legal representative in any case.
WHAT DOES A TURKISH LEGAL REPRESENTATIVE MEAN?
The Turkish Legal Representative is any person who will be appointed by the foreigner to follow the application process and to carry out the proposed agricultural project. Additionally, all legal notices regarding the project will be made to the Turkish Legal Representative.
WHAT IS THE SUBJECT OF THE COMMITMENT TO BE MADE BY THE INVESTOR DURING THE ACQUISITION PROCESS?
The commitment relates to the usage purpose of the relevant parcel and the agricultural activity project to be developed on the on the land which is supposed to be submitted for the approval of the relevant Ministry for approval within two years starting from the date of acquisition.
WILL THE ANNOTATION OF COMMITMENT BE REGISTERED TO THE RECORDS OF THE RELEVANT LAND?
If the Agriculture and Forestry Provincial Directorate approve the acquisition of the land; it is mandatory to put an annotation to the land registry records of the relevant land stating that “The agricultural project will be submitted for the approval of the relevant Ministry within 2 years.’’, and this annotation will be registered to the official records of the land with its date and document number.
IS THERE A SANCTION IF THE COMMITED PROJECT IS NOT DEVELOP/ SUBMITTED?
If the project is not submitted/developed or annotation is not made on the land registry records which is subject to approval of the Ministry, the land will be liquidated. In other words, the price of the real estate will be returned to the investor and the ownership of the real estate will be lost. However, the liquidation process is not generally being implemented in practice.
IS IT REQUIRED FOR FOREIGNERS TO OBTAIN APPROVAL WHILE ACQUIRING A LAND THAT IS SUITABLE FOR CONSTRUCTION AS PER THE RELAVENT ZONING PLAN?
No. The acquisition can be made within the framework of general legislation. However, it is mandatory to develop a project on the land and submit it to the relevant Ministry for approval within 2 years.
The annotation stating that a project will be carried out should be put to the Land Registry Records. If the Land Registry record does not annotate that a project has been submitted or approved, the real estate will be subject to liquidation proceedings.
IS IT LEGALLY POSSIBLE FOR THOSE COMPANIES ESTABLISHED IN FOREIGN COUNTRIES TO ACQUIRE REAL ESTATES IN TURKEY?
Companies that are established in foreign countries as per the laws of a foreign country cannot directly acquire a real estate in Turkey. However, it is possible for them to acquire a real estate with the approval of the relevant Ministry.
CAN TURKISH COMPANIES WITH FOREIGN CAPITAL ACQUIRE REAL ESTATES?
Companies with legal entities established in turkey are able acquire real estates and limited real rights to carry out the activities specified in their master agreements. In order for this type of companies to acquire the real estates, the real foreign persons or legal foreign persons or international organizations as the shareholders of that company need to have at least 50 percent or more shares of the company acquiring the real estate or they at least need to have the authority to appoint and dismiss the members of the board of directors.
IS IT REQUIRED FOR A TURKISH COMPANY WITH FOREIGN CAPITAL TO ANNOTE A COMMITMENT IN ORDER TO ACQUIRE REAL ESTATES?
The answer of this question is yes if the company is acquiring an agricultural land. For the acquisition of agricultural lands, a commitment should be annotated to the official records of the real estate stating “The project to be developed will be submitted for the approval of the relevant Ministry within 2 years”.
The acquisition of agricultural lands is subject to approval of the relevant government entities. However, if the company is acquiring a land which is suitable for construction as per the zoning plan, the said approval will not be required.
For your kind attention,