Real Estate Company Formation in Turkey

Overview: Real Estate Business in Turkey

Turkey’s real estate sector is one of the most dynamic in the region, driven by strong domestic demand, foreign buyer interest, and significant construction and urban regeneration activity. Foreign investors can participate in this market through:

• Real estate brokerage (buying/selling/renting on behalf of clients)
• Property development (construction and sale of residential or commercial projects)
• Real estate investment (acquiring properties for rental income or capital appreciation)
• Property management (managing properties on behalf of owners)

Each activity has different licensing requirements, tax implications, and corporate structure considerations.

Company Formation

Choosing the Right Structure

For most real estate activities, an LLC (Ltd. Şti.) is the standard choice:

• Minimum capital: 50,000 TRY
• 100% foreign ownership permitted
• Can own Turkish real estate directly
• Suitable for brokerage, investment, and development

For large-scale development projects or real estate investment trusts (Gayrimenkul Yatırım Ortaklığı — GYO), a JSC is required. Real estate investment trusts have special regulatory requirements under Capital Markets Board (SPK) rules.

The articles of association should explicitly state real estate trading, development, rental, and management as the company’s business activities.

See our LLC formation guide for complete formation steps.

Registered Capital for Development Companies

While the minimum is 50,000 TRY for an LLC, development companies typically require substantially more capital due to land acquisition and construction costs. Consider the practical capital needs of your specific projects when determining initial capital.

Real Estate Brokerage Licensing

TARES Registration

All real estate brokerage companies and agents in Turkey must be registered with TARES (Taşınmaz Ticareti Bilgi Sistemi), the Real Estate Trade Information System operated by the Ministry of Environment, Urbanization and Climate Change.

TARES registration requirements:

• The company must be registered in the Trade Registry
• At least one authorized real estate agent (yetkili gayrimenkul danışmanı) must be employed
• Authorized agents must hold a real estate agent certificate issued by an authorized training institution
• The company must have a physical office meeting minimum standards

Real Estate Agent Certification

Turkey’s 2018 Regulation on Real Estate Trading introduced mandatory certification for real estate professionals. Agents must:

• Complete a Ministry-approved certification program
• Pass a certification examination
• Register with TARES in their individual capacity

Foreign nationals who meet the language and qualification requirements can also obtain certification.

Operation Requirements

Licensed real estate brokerages must:

• Display their TARES registration certificate in the office
• Maintain a client agreement register
• Issue proper invoices for all brokerage commissions
• Comply with consumer protection regulations for distance transactions
• Maintain professional liability insurance (where required)

Foreign Ownership of Turkish Real Estate

Eligible Nationalities

Most foreign nationals can purchase real estate in Turkey. However, there are restrictions based on nationality and property location under the Military Forbidden Zones and Security Zones Act (Law No. 2565):

• Properties in military zones, strategic areas, and certain border regions are restricted
• Citizens of some countries face additional restrictions (check current regulations)
• Purchases require a military clearance check — this is handled automatically through the title deed registration process

Reciprocity Principle

Turkey applies a reciprocity principle for real estate purchases. Citizens of countries that permit Turkish citizens to purchase property in their jurisdiction can generally purchase property in Turkey. This covers most EU, US, UK, and many other nationalities.

Acquisition Limits

Foreign nationals (individually or collectively) may not own more than 10% of the total area of any single district (ilçe).

Corporate Ownership

A foreign-owned Turkish company can own Turkish real estate without the nationality-based restrictions that apply to direct foreign ownership. This makes the corporate structure advantageous for large-scale property investment.

Foreign companies (without a Turkish entity) face a different legal framework and generally require permission for each acquisition.

Tax Obligations for Real Estate Companies

Corporate Income Tax

Real estate company profits are subject to corporate income tax at 25%. This applies to:

• Brokerage commission income
• Development project profits
• Rental income (net of allowable expenses)
• Capital gains from property sales

VAT on Real Estate

VAT treatment of real estate transactions in Turkey:

Rental Income Withholding Tax

When a corporate entity (LLC or JSC) receives rental income, the tenant (if a company) must withhold 20% of the gross rent and remit it to the tax office on behalf of the landlord company. This withholding is credited against the landlord’s annual corporate income tax liability.

Land and Property Taxes

• Real estate tax (emlak vergisi): Annual property tax at 0.1% to 0.6% of assessed value (varies by property type and location)
• Title deed transfer fee (tapu harcı): 4% of declared value at transfer (split equally between buyer and seller)
• Capital gains tax: Profits from property sales are subject to corporate income tax at 25% (with a potential 50% exemption if held for more than 2 years and proceeds added to capital — verify current rules)

Property Development Process

For companies developing and selling real estate:

1. Land acquisition — Purchase site through title deed transfer
2. Zoning and planning permits — Obtain building permit from local municipality
3. Construction — Use licensed contractors; comply with building codes
4. Occupancy permit (iskân belgesi) — Required before sale of completed units
5. Pre-sale contracts (ön satış sözleşmesi) — Subject to Law No. 6362 for apartments sold off-plan; requires notarization
6. Title deed transfer — Transfer of completed units to buyers at the Land Registry

Frequently Asked Questions

Can a foreigner own 100% of a real estate company in Turkey? Yes. A foreigner can own 100% of a Turkish real estate company. The company can then own Turkish real estate directly, subject to general property laws rather than the nationality-specific restrictions.

Do real estate companies need a separate license from the standard company registration? Yes — brokerage activities require TARES registration and at least one certified real estate agent. Property development does not require a brokerage license but does require construction and building permits for each project.

Is VAT charged on residential property purchases? The first sale of residential properties up to 150 m² net area is subject to 1% VAT. Properties over 150 m² net and commercial properties are subject to 20% VAT on first sale. Resales between individuals are generally VAT-exempt.

What is the citizenship threshold for real estate investment? Foreign nationals can obtain Turkish citizenship by investing at least $400,000 in Turkish real estate (maintained for 3 years). See our Turkish Citizenship by Investment guide for the full process.