ISTANBUL PROPERTY INVESTMENT
INTERNATIONAL MARKETING COMPANY
 
 

We are a bridge between Turkish property developers and International property investors.



 


ISTANBUL HOUSE  INVESTMENT

 
Real Estate Sector in Turkey
Real Estate in Istanbul
Buying Process
Taxes
Turkish citizenship & Residency
Invest in Turkey
Living in Turkey
Prior to Arrival in Turkey
Establishing a Business in Turkey
Transferring Assets
Cost of Doing Business in Turkey
Financing a Business
Incentives
Employees and Social Security
Demography and Labor Force
Regulatory and Supervisory Authorities
 
Macroeconomic Indicators
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Investment Legislation
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Useful information About Istanbul
Starting a Business in Turkey / REAL ESTATE

Turkey has a non-discrimination and equal treatment policy towards foreign investors, thus foreigners have the same rights and liabilities as locals. There are no rules requiring Turkish participation in the capital or management of a company with foreign capital; a company may be established with 100 percent foreign capital. Almost all sectors are open to foreign capital.

The company establishment procedures have been simplified to a great extent through the shift from a “screening system” to a “monitoring system” for foreign investments and through the elimination of the unnecessary procedures to set up a business for both local and foreign investors.

Registration Requirements

“The World Bank-Doing Business 2013 Report” summarizes all the procedures and requirements for establishing a business in Turkey.

Example: Standardized Company

City: Istanbul

Legal Form: Limited Company

Paid in Minimum Capital Requirement: TRY 1,250

Start-up Capital: 10 times GNI per capita

 

No.

Procedure

Time to complete

Cost to complete

1

Execute and notarize articles of association, signature declaration of the managers and commercial books.

 The following documents are required:

  • Notarized articles of association (three, one original
  • Notarized signature declarations (two copies)
  • Notarized identity cards of company managers (two copies)

 The incorporation documents are exempt from the stamp tax. There are no fees to be paid for the articles of association and the signature declarations. However, there still are fees for notary services and for the valuable papers.

1 day

Paper cost: TRY 118.13

Notary services: TRY 296.65

Total = TRY 414.78

2

Deposit a percentage of capital to the account of the Competition Authority.

 To register with the Commercial Registry, founders must obtain the original receipt from Halk Bankasý. This receipt shows that 0.04% of the company’s capital has been paid to the Competition Authority at the Central Bank of the Republic of Turkey (CBRT) or a public bank.

1 day

0.04% of capital

3

Deposit the initial capital in a bank and obtain the certificate of paid-in capital.

 If the whole capital of the company is not paid in advance, the capital of the company can also be paid in within three months following the registration. Kindly note that another option is to pay 25 percent of the capital wýthin the first 3 months following the registration of the company; the balance of the subscribed capital shall be paid within 3 years of incorporation.

1 day

no charge

4

File the incorporation notice form, commitment letter, and Chamber registration statement at the Trade Registry Office.

Founders must submit a petition for the establishment, incorporation notice form, the commitment letter, and the chamber of commerce registration statement to the Commercial Registry Office. However, the formation of a limited liability company does not require a court application. Thus, upon gathering the following documents, founders may begin the registration process:

  • For each individual shareholder, who is a Turkish citizen or for a Turkish representative of such shareholder, two certified copies of the identity card
  • Three copies of an establishment notification form (kuruluþ bildirim formu)
  • Three copies of the notarized articles of association (one original)
  • Bank deposit receipt with respect to the payment made to the bank account of the Competition Authority (0.04% of the company's share capital)
  • An undertaking (taahhütname) signed by the authorized company representatives
  • For each person authorized to represent the founders of the limited liability company, two copies of the signature declarations

Following the completion of the registration phase before the Commercial Registry, the Commercial Registry notifies the relevant tax office and the Social Security Administration ex-officio regarding the incorporation of the company. The Commercial Registry arranges for an announcement in the Commercial Registry Gazette within approximately 10 days as of the company registration.

A tax registration certificate must be obtained from the local tax office following the Commercial Registry Office notifies the local tax office.

 If there will be employee(s), a social security number for the company must be obtained from the relevant Social Security Administration. For the employees, a separate application has to be made following the registration of the company with the Social Security Administration.

  • The registration fee for a limited liability company: TRY 300
  • Initial registration fee of the Chamber of Commerce: TRY 695
  • Publication or announcement fee: TRY 0,3 per word
  • Start-up notice: TRY 50
  • Commercial Registry Gazette fee: TRY 2
  • Registration fee for manager's signature

- First manager's signature: TRY 350

- Each additional manager's signature: TRY 250

Fee schedule for annual membership in the Istanbul Chamber of Commerce (based on capital):

  • TRY 1 - 999 (capital): TRY 95
  • TRY 1,000 - 24,999 (capital): TRY 100
  • TRY 25,000 - 249,999 (capital): TRY 150
  • TRY 250,000 - 999,999 (capital): TRY 200
  • TRY 1,000,000 and up (capital): TRY 225

2 days

TRY 150 (initial registration fee of Chamber of Commerce) + TRY 695 (commercial registration including first manager’s signature) + TRY 246.20 (for each additional manager) + TRY 0.30 per word for publication+ TRY 2 (Trade Registry Gazette fee)+ TRY 50 (fee for start-up announcement)

5

* Have a notary certify the legal books.

The founders must certify the legal books the day they register the company with the Commercial Registry. The notary public must notify the Tax Office about the commercial book certification.

 

Fee schedule for legal book certification:

 

  • Certification up to 100 pages: TRY 45
  • Certification up to 200 pages: TRY 56

1 day (simultaneous with previous procedure)

TRY 206 (4 books)

6

Follow-up with the Tax Office on the Commercial Registry’s notification.

The Commercial Registry Office notifies the Tax Office and the Social Security Administration of the company’s incorporation. In practice, to expedite the registration process, company representatives follow up on whether the notification has been received. A tax officer comes to the company headquarters to prepare a determination report. There must be at least one authorized signature in the determination report. Trade Registry Officers send company establishment form which includes tax number notification to Tax Office.

1 day

no charge

 
Acquisition of immovable by foreign capital companies

Pursuant to the Law No. 5782 amending the Land Registry Law No. 2644, foreign real persons may acquire, with respect to provincial districts, at most 10% of the total area remaining within the scope of implemented development plans or local development plans.

The Council of Ministers is authorized to determine the area ratio of the immovable properties which are not allowed to be purchased by real persons and legal entities (by considering the request for acquisition of immovable and limited rights in-rem in irrigation, energy, agricultural, mining regions, green areas, and other areas requiring protection due to their religious and cultural values; special protection areas and in the sensitive zones such as floras and faunas and other locations which are deemed strategically important from the aspect of public interest and state security).

However, a regulation was circulated prescribing the procedures and principles relating to the acquisition of immovable and limited rights in-rem by the legal entity companies incorporated or participated in Turkey by foreign investors.

The Regulation relating to Acquisition of Immovable by Companies with Foreign Capital, published in the Official Gazette dated 12.11.2008 and No. 27,052 is issued on the basis of Article 36/4 of Land Registry Law No 2644.

Pursuant to this regulation, the companies willing to acquire immovable and/or limited rights in-rem in Turkey shall apply to the Provincial Planning and Coordination Directorate (Prefecture Office) at the location of the immovable by presenting the required documents.

Upon the application, the Prefecture Office shall request the Provincial Directorate of Industry and Commerce in writing to notify within seven days whether the application for acquisition of immovable is consistent with the company’s field of activity defined in its articles of association, and the General Staff or an authorized sub-command to inform within thirty days whether the immovable remains within a restricted military zone, military security zone or a militarily strategic region, and if so, whether the acquisition of immovable ownership is approvable or not; also, relevant law enforcement agency or General Directorate of Security is sought to report within twenty days whether the immovable is located in the special security zone or not.

According to the rules set forth in the said regulation:

The request for acquisition of ownership of an immovable remaining outside the restricted military zone, military security zone or a militarily strategic region is finalized by the Prefecture Office within the frame of the opinion conveyed by the Provincial Directorate of Industry of Commerce on the company’s field of activity defined in its articles of association.
In case the immovable is located in the restricted military zone, military security or strategic region, the General Staff assesses the request for the acquisition of immovable from the aspect of state security and notifies the Prefecture Office.

If an affirmative decision is taken, then Prefecture Office finalizes the request within the frame of the opinion of the Provincial Directorate of Industry and Commerce confirming compliance of the request for acquisition of immovable with the company’s field of activity defined in its articles of association.
In case the immovable is located in special security region, it is the duty of the commission to be formed within the body of the Prefecture Office to assess the request for acquisition of immovable from the aspects of state security and company’s field of activity defined in its articles of association and to decide by referring to the written comments of the relevant institutions and state bodies. The unanimous approval of the permanent commission members is required for the acquisition of the immovable.

In the application for acquisition of limited rights in-rem, the Prefecture Office requests the Provincial Directorate of Industry and Commerce in writing to notify within seven days whether the application is consistent with the company’s field of activity defined in its articles of association, and finalizes the application within the frame of the comments received from the relevant authorities.
In case a company with domestic capital becomes a foreign invested company through a share transfer, the Turkish Treasury is required to be notified. The Turkish Treasury informs the General Directorate of Land Registry and Cadastre monthly on this kind of capital transformations. The General Directorate of Land Registry and Cadastre notifies the Prefecture Office as to the immovable owned by the company. Then Prefecture Office shall request the Provincial Directorate of Industry and Commerce in writing to notify within seven days whether the application for acquisition of immovable is consistent with the company’s field of activity defined in its articles of association, and the General Staff or its authorized sub-commands to inform within thirty days whether the immovable remains within the restricted military zone, military security zone or militarily strategic regions, and if so, whether the acquisition of immovable ownership is approvable or not; also, the relevant law enforcement agency or General Directorate of Security is sought to report within twenty days whether the immovable is located in the special security zone or not.

If the shareholding structure changes, in other words, if an incoming foreign partner participates in the foreign invested company, the same principles and procedures with the above mentioned situation are applied. However, in case of a change in the shareholding structure, the Prefecture Office does not investigate whether the application for acquisition of immovable is consistent with the company’s field of activity defined in its articles of association or not.

The commission to be formed within the body of the Prefecture Office may file a legal action against the decision unanimously rendered for the acquisition of immovable by relying on Article 125 of the Constitutional Law stipulating “Any person may pursue a judicial action against any and all actions and transactions of the Administration”. In actions to be filed against the transactions executed by the Administration, the prescribed period starts to run as of the date of the written notification.

There is no difference between the applications of immovable acquisition and limited right in-rem application process except the required term from the authorities giving their opinions. Each process requires the positive opinion of the relevant authorities, such as Turkish General Staff regarding the country security. Therefore, when the process is considered in terms of time limitations, acquisition of limited rights in-rem is more convenient and practical.

Additionally, it is important to note that, except in military zones, acquisition of an immovable will not take a long and is not a bureaucratically complicated process.

The subject whether the acquired immovable or limited rights in-rem are used or not used to serve the object defined in the company’s articles of association is assessed by the relevant commission. The assessment period starts ex officio or upon the written application of real persons or legal entities. In case the assessment is resulted negatively, the commission notifies the Prefecture Office in order to provide enforcement of the relevant clause of the regulation relating to liquidation of the immovable. If the immovable and the limited rights in-rem are determined to have been acquired or used contrary to this clause and if the liquidation of the immovable not completed by the owner within the period granted by the Ministry of Finance, then foreclosure proceedings are applied and the proceeds are paid to the beneficiary.

Obtaining a Work Permit in Turkey

Applications for work permits can be made inside or outside Turkey:

Foreigners residing outside Turkey shall apply to the relevant Turkish Consulate of either his/her country of residence or his/her country of citizenship.

Foreigners with a valid residence permit (valid for a minimum of 6 months, except for residence permits for educational purposes) can apply directly to the Ministry of Labor and Social Security.

Documents to be submitted by the employer for the first application
• A work permit application form addressed to the Ministry of Labor and Social Security, (scanned and sent online during electronic application; printed when directly applying to the Ministry)
• A balance sheet and a profit & loss statement for the past year certified by tax authorities (scanned and sent online during electronic application)
• The Turkish Trade Registry Gazette indicating the most recent capital and shareholding structure of the organization (scanned and sent online during electronic application)
• When applying online, a notarized power of attorney for the authorized person and the employee’s work contract with the applicant company (scanned and sent online during electronic application)
• As for corporate bodies that intend to employ foreign experts in the fields of engineering, construction, contractorship and consultancy services, payslips of Turkish citizens working in the same positions and the contract between the foreign expert and the employer (scanned and sent online during electronic application)

Other documents to be submitted for specific sectors
• In the education sector, the Private Education Institution Certificate taken from the Ministry of National Education or Establishing a Business and Operating License taken from the related municipality (scanned and sent online during electronic application)
• For enterprises in the healthcare sector, charity organizations and similar associations, the certificate of conformity, granted permits or licenses taken from the related governmental authority (scanned and sent online during electronic application)
• For certified tourism enterprises, copies of the Operating License and Tourism Investment Certificate taken from the Ministry of Culture and Tourism (scanned and sent online during electronic application)

Documents to be submitted by foreign individuals applying for the first time
• Application Form for Foreigners (one copy of the printed online application form signed by the employer and the employee or one copy of the printed online application form with work contract). For applications within Turkey, a valid residence permit (scanned and sent online during electronic application)
• With the exception of residence permits for educational purposes, the residence permit has to be valid for a minimum period of 6 months; if not, the applicant is to apply from his/her country of residence via Turkish Consulates/Embassies
• A notarized copy of the passport translated into Turkish (scanned and sent online during electronic application)

In addition to the documents above, foreigners applying for a work permit as experts in specific fields have to present the following documents:


• Foreign Degree Equivalency for applicants that received their higher education outside Turkey, in accordance with the Regulations for Equivalency of Degrees Obtained Abroad, pursuant to the articles 3 and 7/p of the Law No. 2547 (scanned and sent online during electronic application)
• If deemed necessary for the Ministry, a translated and notarized copy of the degree or provisional certificate of graduation; for pilots, pilot’s license taken from their country of origin (scanned and sent online during electronic application; also printed for application file)
• For Certified Tourism Enterprises, copies of the work contract in Turkish and applicant’s native language along with the Letter of Recommendation translated into Turkish (scanned and sent online during electronic application; printed for direct application)
• For foreigners to be employed in educational services subject to the authority of the Ministry of National Education, the Certificate of Proficiency obtained from the same Ministry. (scanned and sent online during electronic application)

Documents to be submitted by the employer for extending a work permit
• A work permit application form addressed to the Ministry of Labor and Social Security, (scanned and sent online during electronic application; printed when directly applying to the Ministry)
• Documents showing the employer company has no unpaid tax debt (available online from the Ministry of Finance)
• Documents showing the employer company has no unfulfilled social security obligations (available online from the Social Security Institution)
• A certified copy of The Turkish Trade Registry Gazette indicating the most recent capital and shareholding structure of the organization in case of a change in shareholding or capital structure of the employer company (scanned and sent online during electronic application)
• When applying online, a notarized power of attorney for the authorized person and the employee’s work contract with the applicant company (scanned and sent online during electronic application)

Documents to be submitted by foreign individuals for extending a work permit
• Application form for foreigners (one copy of the printed online application form signed by the employer and the employee or one copy of the printed online application form with work contract)
• Residence permit (scanned and sent online during electronic application)
• Existing work permit and cover letter (scanned and sent online during electronic application)
• A notarized copy of the passport translated into Turkish (scanned and sent online during electronic application)
• The renewed Certificate of Proficiency obtained from the Ministry of Education, should the foreign employee switch jobs between educational institutions subject to the authority of the same Ministry (scanned and sent online during electronic application)
• For foreigners working as engineers/architects/urban planners, an interim membership certificate from the Union of Chambers of Turkish Engineers and Architects according to the article 36 of the Law No. 6235 (scanned and sent online during electronic application)

Work permit criteria for foreigners
The evaluation criteria designated by the Ministry of Labor and Social Security for the purpose of fulfilling transactions related to foreigners’ work permit requests quickly and objectively are defined below:
1) At the workplace for which work permit is requested, at least five persons who are citizens of the Republic of Turkey must be employed. In case the foreigner requesting work permit is a co-partner of the company, aforementioned condition related to the employment of five persons who are Turkish citizens will be required for the last six months of one-year work permit to be granted by the Ministry. In case of requesting work permit for more than one foreigner at the same workplace, for each foreigner following the first foreigner who is granted a work permit, the condition regarding the employment of five persons who are Turkish citizens will be required individually.
2) Paid-in capital of the workplace must be at least TRY 100,000 or the lowest figure for its gross sales amount must be equal to TRY 800,000 or its export amount in the last year must be at least USD 250,000.
3) For work permit requests concerning foreigners to be employed by associations and foundations, Article 2, and for evaluations regarding work permit applications related to foreigners to be employed in representative agencies of foreign countries’ airlines in Turkey as well as those to work in education sector and home services sector Articles 1 and 2 will not be applied.
4) Foreigner requesting work permit who is a co-partner of the company must own at least 20% shares in the company, and this percentage shall correspond to at least TRY 40,000, as an obligation.
5) Salary amount which is declared by the employer to be paid to the foreigner must be at a level which complies with the position and competence of the foreigner. Accordingly, considering the minimum wage amount effective as of the application date, wage to be paid to a foreigner must be equal at least to the following:

• 6.5 times the minimum wage amount, for senior executives and pilots as well as engineers and architects requesting preliminary permit
• 4 times the minimum wage amount, for unit or branch manager as well as engineers and architects
• 3 times the minimum wage amount, for persons to be employed for jobs requiring expertise and proficiency as well as teachers
• 1.5 times the minimum wage amount, for persons to be employed for home services and other occupations.

6) Requests for persons to be employed as masseurs, masseuses and SPA therapists, occupations requiring expertise and proficiency, by tourism establishments with at least four stars licensed by the Ministry of Culture and Tourism proving that there is a licensed massage parlor within their facilities, as well as licensed holiday resorts will be evaluated, while requests by establishments and workplaces which are not meeting these criteria will not be considered appropriate.
7) For foreigners to be employed by firms operating in the entertainment sector as well as tourism-animation organization firms for occupations requiring expertise and proficiency there will not be a separate quota application provided that at least 10 persons who are citizens of the Republic of Turkey are employed in these firms.

Environmental Impact Assessment Directive Flow Schematics (25 work days)

Preparation of the project presentation file
Submitting the project presentation file to the Ministry and the Ministry checks the file for compliance (5 work days)
Evaluation of the project presentation file (15 work days)
Ministerial decision stage (5 work days)

EIA required
EIA not required


Environmental Impact Assessment Procedure (38 work days)

Preparation and submitting of the project presentation file to the Ministry
Evaluation of the project presentation file by the Ministry and forming of an Analysis and Evaluation Commission (AEC)
Public participation and formatting (12 work days)
Submitting the EIA report to the Ministry (within 1 year at most)
The Ministry checks the file for compliance with the format (3 work days)
Analysis and evaluation by the Commission members (10 work days)
Final EIA report is submitted to the Ministry (5 work days)
Ministerial decision stage - EIA positive /EIA negative (5 work days)

Commencement of the investment in a maximum of five (5) years.
Cancellation of the investment

5. Construction License
A construction license is the permission granted by the municipalities within the borders of adjacent areas and governorships (Directorates of Public Works and Settlement) outside the borders of adjacent areas, in order to start constructing a building that is subject to license.

In order to obtain a construction license, construction owners or their statutory agents have to submit the following documents to the relevant administrations (municipalities or governorships).
(Duration: 3 days - 1 week)

Application form
Letter of undertaking
Title deed
Letter of attorney and deed of consent (where necessary)
Cadastral extract
Construction project
Static project
Electricity, heating and mechanical systems projects
Environment and landscape projects
Accountable receipts of road and infrastructure contribution rates
Ground survey
Other documents for safety engineering (where necessary)

The person who obtains a construction license must start construction work within two years. If the construction work does not start within two years or in cases where the construction is not completed in conformity with the license in five years despite starting the project within two years following the issuing of the license, the license becomes invalid.

Operation License Procedure

1 - Registration of the company with the related regional office of the Ministry of Labor and Social Security.
2 - Application by the company to the regional office of the Ministry of Labor and Social Security with a petition for an operation license prior to the commencement of operations.
3 - Upon application by the company, the Ministry inspects the workplace for compliance with occupational health and safety regulations, as well as with the site plan and projects.
4 - If the workplace of the company complies with the rules and regulations, the regional office of the Ministry of Labor and Social Security sends the operation license to the company by post.
All services of the Ministry during this process are free of charge
 
Istanbul House Investment 
Phone and Fax:
+90 (212)  256 80 06 -  256 69 80 - 256 65 69
Address:
Aydede Cad. No: 4/3, Taksim, Istanbul, Turkey
E-mail: 
marketing@istanbulhouseinvestment.com     www.istanbulhouseinvestment.com