What are the investment restrictions for foreigners in Turkey?
Turkey is considered one of the best countries in the world to invest and earn money, and it has occupied a prominent position among the economic countries. Thousands of investors resort to establishing their companies and investments in Turkey because of the advantages it has for the success of investments, and the other reason for this is that Turkey has become one of the largest real estate markets in the world. However, what is the obstacles and restrictions that hinder the foreign investor's path towards pumping his money and investing in the Turkish Republic?
As most foreign investors know, Turkey changed laws in 2002 to allow foreign investors, and more specifically foreign citizens, to purchase real estate.
Unfortunately, not all the important points are put into place to make foreign investment in Turkey a smooth process. As a result, negative reactions and emotions arose from local property owners and local real estate investment professionals.
An example of some of the issues raised by these new laws, investment has been opened in areas of cultural and national importance to the foreign investor, which can then be used in a way that does not suit or promote the interests of the Turkish people as a whole. As a result, laws that were repealed only four years ago were re-enforced in 2006.
In 2007, an amended law was introduced, which allows the purchase of Turkish real estate by foreign investors, but with certain restrictions in place. These restrictions include size restrictions of twenty-five thousand square meters or less. Obviously, this won't be a problem for the average vacation home buyer but it may cause problems for investors in huge areas. This may be bypassed if a foreign citizen establishes a Turkish limited company and then buys real estate through the said company for commercial purposes. Foreign investment was also restricted to certain areas of the country. For example, most farmlands were not available for purchase.
Another limitation concerns foreigners who can purchase real estate.
Citizens of the countries of the Middle East, the Russian Republic, and some other countries whose laws in their countries of origin do not provide reciprocal laws that allow Turkish citizens to buy real estate were not welcome and they were not allowed to buy Turkish real estate.
Work is now underway on a newly amended law to eliminate the law of reciprocity. This will not affect most real estate investors in Europe and North America, but it will have positive effects on the aforementioned Middle Eastern citizens and other previously restricted foreign investors such as Iranians, Kyrgyz, Tajiks, Azerbaijan, Belarus, and Arabia.
The repeal of the law of reciprocity couldn't come at a better time for aggrieved real estate investors. Among the nearly 600 leading European real estate investment professionals surveyed in the PwC survey, Istanbul recently ranked first as the best European city to invest in. London, one of the places investors usually turn to in the Middle East, has slipped below 10th place on this list.
It is expected that when the law is officially lifted, there will be an increase in demand for Istanbul and coastal areas of Turkey such as Antalya, Alanya, Kemer, and the Black Sea.
Now is the best time for foreigners to invest in Istanbul, and it is also the ideal time for Middle Eastern investors to start implementing all their plans to invest in it, given the devaluation of the lira.