General

1. What are the restrictions for property acquisition by foreigners?

First of all, the country of the foreigner desirous of acquiring a property must be among the countries cleared by Turkey for property acquisition as specified in Article 35. Property acquisition by foreign real persons is only possible within the scope of legal restrictions further to Article 35 of the Land Registry Law 2644. Foreigners may not acquire properties in military forbidden zones further to the Military Forbidden Zones and Security Zones Law No.2565. A foreign real person may acquire properties and restricted real rights of up to 30 hectares maximum. The President may increase this size up to two times. Total area of properties acquired by foreign real persons and independent and continuous limited real rights may not exceed ten percent (10%) of the surface area of the subject district of the private property. Acquisition by foreigners is not possible at the places included in strategic areas and special security zones defined by the President as areas where foreign real and legal persons may not acquire properties.

2. Does the query of military forbidden zones remain in place?

The military forbidden zone query has been removed in 81 provinces (except in certain districts) as advised in our Communique 2017/4. As a result, foreign real persons’ property acquisition procedures are now the same as those applied to Turkish citizens.

Are there any liabilities required on the part of a foreigner who acquires a land without any building?

Any foreigner who acquires a land without any building is required to develop a project on the acquired land within 2 years from the date of acquisition, and submit the project for the approval of the related ministry depending on the type of the project. The time frame for completing the project shall be determined by the relevant ministry. (Review of regulations to extend the time frame is underway).

4. Is the transfer of property to foreign origin real persons by inheritance possible?

Transfer of property to foreign origin real persons by inheritance is possible. However, if the transferred property is located in a zone where a real person may not acquire a property; the property is required to be sold or liquidated otherwise after the transfer. Furthermore, in the event of transfer of property by inheritance to a person who is from a country not include in the list of Article 35, the property in question must be sold or liquidated otherwise after the transfer.

5. Can a person acquire the property of a company in which he/she is a shareholder, and apply for citizenship?

No, they can’t. The property to be acquired by foreign nationals through actual sale or a sale promise should not be registered to the title of the legal entity of the company that the real person owns or manages.

Tourism

1. How much do I have to pay an agent to help me buy a house?

Home shoppers pay little or no fees to an agent to buy a home. Here’s why: For most home sales, there are two real estate agents involved in the deal: one that represents the seller and another who represents the buyer. Listing brokers represent sellers and charge a fee to represent them and market the property. Marketing may include advertising expenses such as radio spots, print ads, television and internet ads. The property will also be placed in the local multiple listing service (MLS), where other agents in the area (and nationally) will be able to search and find the home for sale.

2. What kind of credit score do I need to buy a home?

Most loan programs require a FICO score of 620 or better. Borrowers with higher credit scores represent less risk to the lender, often resulting in a lower the down payment requirement and better interest rate. Conversely, home shoppers with lower credit scores may need to bring more money to the table (or accept a higher interest rate) to offset the lender’s risk.

3. How much do I need for a down payment?

The national average for down payments is 11%. But that figure includes first time and repeat buyers. Let’s take a closer look. While the broad down payment average is 11%, first time homebuyers usually only put down 3 to 5% on a home. That’s because several first-time home buyer programs don’t require big down payments. A longtime favorite, the FHA loan, requires 3.5% down. What’s more, some programs allow down payment contributions from family members in the form of a gift. Some programs require even less. VA loans and USDA loans can be made with zero down. However, these programs are more restrictive. VA loans are only made to former or current military servicemembers. USDA loans are only available to low to-middle income buyers in USDA-eligible rural areas.

4. Should I sell my current home before buying a new one?

If the built-up equity in your current home will be applied to the down payment on the new home, naturally the former will need to be sold first. Some home buyers decide to turn their current home into an investment property, renting it out. In that case, the current home will not need to be sold. However, your loan advisor will still need to evaluate your risk profile and credit history to determine whether making a loan on a new home is feasible while retaining title to the old home.

5. How many homes should I view before buying one?

That’s up to you! For sure, home shopping today is easier today than ever before. The ability to search for homes online and see pictures, even before setting a foot outside the comfort of your living room, has completely changed the home buying game. Convenience is at an all-time high. But, nothing beats visiting a home to see how it looks and ‘feels’ in person

Real Estate

1. What the first step of the home buying process?

Getting pre-approved for a mortgage is the first step of the home buying process. Getting a pre-approval letter from a lender get the ball rolling in the right direction. Here’s why: First, you need to know how much you can borrow. Knowing how much home you can afford narrows down online home searching to suitable properties, thus no time is wasted considering homes that are not within your budget. (Pre-approvals also help prevent disappointment caused by falling in love unaffordable homes.)

2. How long does it take to buy a home?

From start (searching online) to finish (closing escrow), buying a home takes about 10 to 12 weeks. Once a home is selected an the offer is accepted, the average time to complete the escrow period on a home is 30 to 45 days (under normal market conditions). Though, well-prepared home buyers who pay cash have been known to purchase properties faster than that. Market conditions are a major factor in how fast homes are sold. In hot markets with a lot of sales activity, buying a home may take a little longer than normal. That’s because several parties involved in the transaction get behind when business suddenly picks up. For example, a spike in home sales increases the demand for property appraisals and home inspections, yet there will be no increase in the number of appraisers and inspectors available to do the work. Lender turn-around times for loan underwriting can also slow down. If each party involved in a deal takes a day or two longer to get their work done, the entire process gets extended.

3. What is a seller’s market?

In sellers’ markets, increasing demand for homes drives up prices. Here are some of the drivers of demand: Economic factors – the local labor market heats up, bringing an inflow of new residents and pushing up home prices before more inventory can be built. Interest rates trending downward – improves home affordability, creating more buyer interest, particularly for first time home buyers who can afford bigger homes as the cost of money goes lower. A short-term spike in interest rates - may compel “on the fence” buyers to make a purchase if they believe the upward trend will continue. Buyers want to make a move before their purchasing power (the amount they can borrow) gets eroded. Low inventory - fewer homes on the market because of a lack of new construction. Prices for existing homes may go up because there are fewer units available.

4. What is a buyer’s market?

A buyer’s market is characterized by declining home prices and reduced demand. Several factors may affect long-term and short-term buyer demand, like: Economic disruption - a big employer shuts down operations, laying off their workforce. Interest rates trending higher – the amount of money the people can borrow to buy a home is reduced because the cost of money is higher, thus reducing the total number of potential buyers in the market. Home prices drop to meet the level of demand and buyers find better deals. Short-term drop in interest rates – can give borrowers a temporary edge with more purchasing power before home prices can react to the recent interest rate changes. High inventory – a new subdivision and can create downward pressure on prices of older homes nearby, particularly if they lack highly desirable features (modern appliances, etc.) Natural disasters - a recent earthquake or flooding can tank property values in the neighborhood where those disruptions occurred.

5. What is a stratified market?

A stratified market happens where supply and demand characteristics differ by price point, in the same area (typically by city). For example, home sales for properties above $1.5M may be brisk (seller’s market) while homes under $750k may be sluggish (buyer’s market). This scenario comes along every so often in West Coast cities where international investors - looking to park their money in the United States - buy expensive real estate. At the same time, home sales activity in mid-priced homes could be entirely different.

Startups

1. What are the types of companies that can be incorporated in Turkey?

The Joint Stock Company, Limited Company, Collective Company, Limited Partnership, Cooperative the branch are all options for a legal entity in Turkey.

2. Can a foreigner open a company in Turkey without a Turkish share holder?

Yes. Foreigners have equal rights to open companies, just as nationals. Turkey welcomes foreign investments in various business fields.

3. How fast can you start a new business in Turkey?

A business can be incorporated in 5-10 days depending on the type of company and if all the documents are in order.

4. Does the company need to have an office in Turkey?

Yes. A registered office is necessary for a newly incorporated company in Turkey. However, you can establish a company in a virtual office which is very economical to rent. This also applies for branches of foreign companies as well.

5. How many shareholders do I need to form a Company in Turkey?

Company registration in Turkey with a single shareholder is possible. Then, the sole shareholder of the company will automatically be a director.

6. Are there any limits on the number of shareholders?

For limited liability company in Turkey, the number of shareholders shall not exceed 50.

7. Is it mandatory to be present while opening a company in turkey?

No, you can send a power of attorney we can complete the process on your behalf through. However, after the company is established in Turkey, the presence of an authorized signatory is necessary for some procedures like Bank account etc.

8. Do I need to have any kind of permit like work permit or resident permit for opening a company in Turkey or I can do all this process while I am on a visit visa?

No, you do not need any kind of permit for opening a company in Turkey.

9. Will I get a residence permit when I open a company in Turkey?

No by establish a company in Turkey you will not get a residence Permit company formation and residence permit are completely separate process. There are other ways to get a residence Permit.

10. What is the minimum share capital in Turkey?

The minimum share capital depends on the type of company. This amount is larger for joint stock companies than for limited liability companies: 50,000 TRY as opposed to 10,000 TRY.

11. What are the requirements for opening a bank account in Turkey?

The bank account is mandatory for the company because the share capital is deposited upon incorporation. Banks will generally request the registration certificate of the company and other documents attesting the identity of the founding members. Certain fees apply, as per the bank’s policy.

12. Do you need special permits and licenses in Turkey?

Yes. For example, Tourism industry is regulated by TURSAB and import and export activities are regulated and business owners engaging in this activity based on certain permits obtained before starting the actual trading.

13. What are the taxes for companies in Turkey?

The corporate tax in Turkey is 22% but lower rates can apply. A payroll tax, real property tax, social security tax and other taxes also apply.

14. Do I need an accountant when I open a company in Turkey?

Yes, after you establish a company in Turkey, you need to have a certified accountant.

Trading

1. What is earnest money?

When you make an offer on a home, your agent will ask for a check to accompany it (checks are the same as cash, and the deposit is typically 1% to 2% of the purchase price). Earnest money is made in good faith to demonstrate - to the seller - that the buyer’s offer is genuine. Earnest money essentially takes the home off the market to anyone else and reserves it for you. The check (or sometimes cash) is deposited in a trust or escrow account for safekeeping. If a deal is struck, the earnest money is applied to the down payment and closing costs. If the deal falls through, the money is returned to the buyer.

2. How long can the seller take to respond to my offer?

Written offers should stipulate the timeframe in which the seller should respond. Giving them twenty-four hours should be sufficient.

3. Should I order a home inspection?

Yes! Home inspections are required if you plan on financing your home with an FHA or VA loan. For other mortgage programs, inspections are not required. However, home inspections are highly recommended because they can reveal defects in the home that are not easily detected. Home inspections bring peace of mind to one of the biggest investments of a lifetime.

4. Do I need to do a final walk-through?

It’s not required, but it’s a darn good idea! Final walk-throughs give buyers a chance to make sure nothing had changed since their first visit. If repairs were requested, as part of the offer, a follow-up visit ensures that everything is squared-away, as expected, per the terms of the contract.