Can a Foreign-Owned Turkish Company Buy Property in Turkey? Land Registry Law Article 36

1. Article 36 governs Turkish companies with qualifying foreign capital; Article 35 governs different buyers

Turkish real-estate law distinguishes three categories that are often confused: foreign natural persons, foreign legal persons established abroad, and companies established in Turkey with foreign capital. Land Registry Law No. 2644 Article 35 principally governs acquisitions by foreign natural persons and foreign legal persons. Article 36 creates the separate regime for companies that have Turkish legal personality but meet defined foreign-ownership or foreign-control thresholds.

This distinction changes the legal test. A Turkish limited liability company or joint stock company does not become a “foreign legal person” merely because all of its shareholders are foreign. It remains a company established under Turkish law. When its foreign ownership/control falls within Article 36, its real-estate acquisition is evaluated under the Article 36 regime.

The individual-foreigner limits in Article 35—such as the natural person’s nationwide hectare ceiling and district-percentage rule—should not be mechanically applied to a Turkish company falling under Article 36. Article 36 instead ties acquisition and use to the company’s articles-of-association activities and imposes the special approval/security framework set out for foreign-capital Turkish companies.

For a foreign individual buying personally, use our separate Buying Property in Turkey for Foreigners: Article 35 guide. The present article addresses the corporate purchaser.

2. Article 36 applies at 50% foreign ownership or qualifying foreign management control

Article 36(1) identifies the Turkish companies subject to its principal rule. It covers companies established in Turkey with legal personality where foreign natural persons, legal entities established under foreign law or international organisations own 50% or more of the shares.

The statute contains a second, independent control test. Even if the foreign shareholding is below 50%, Article 36 applies where the foreign persons/entities have authority to appoint or remove the majority of persons who have management rights. This prevents the legal analysis from being reduced to share percentage alone.

A corporate property acquisition should therefore begin with the current shareholding and governance documents. The Trade Registry, share ledger, articles, shareholders’ arrangements to the extent legally effective, and appointment/removal powers must be reviewed before assuming that the company is outside Article 36.

3. A qualifying company may acquire property only to carry out activities stated in its articles of association

Article 36 does not give a qualifying foreign-capital Turkish company an unrestricted right to acquire any real estate for any purpose. The first paragraph states that the company may acquire and use real-estate ownership or limited rights in rem in order to conduct the activities specified in its articles of association.

The intended use should therefore be matched to the company’s registered business objects before signing. A manufacturing company acquiring factory land, a logistics company acquiring premises needed for logistics operations, or a tourism company acquiring property for an authorised tourism activity presents a different Article 36 analysis from a company whose registered objects do not cover the proposed use.

Corporate objects should not be amended as a cosmetic afterthought. If the company genuinely intends to enter a new line of business, the corporate amendment, regulatory licences and real-estate acquisition should be structured together. A registry amendment does not override sector licensing or zoning law.

The acquisition file should describe the intended use consistently across the board/shareholder decision, application, registry documentation and any sector permit. Contradictory statements about whether the property is for headquarters, investment holding, manufacturing, warehousing or another activity create unnecessary legal risk.

4. Article 36 also reaches indirect ownership and threshold-crossing share transfers

Article 36(2) extends the regime beyond direct shareholding. Where a company described in the first paragraph participates directly or indirectly in another Turkish company, the same principles apply if the foreign investor’s ultimate ownership in the participated company is 50% or more.

The provision also addresses a transaction in which foreign investors acquire, directly or indirectly, 50% or more of the shares in a Turkish company that already owns real estate. Likewise, where an existing foreign-capital company owns real estate and a share transfer causes the foreign-investor ratio to reach or exceed 50%, the Article 36 principles apply.

This means property compliance must be included in corporate M&A due diligence. A share acquisition can change the real-estate regulatory status of the target even though no title deed changes hands on closing. The buyer should map the target group’s Turkish real estate before signing the share purchase agreement.

For foreign investors buying a Turkish company, the legal analysis should therefore include both share-transfer formalities and Article 36 consequences. For the separate question of whether full foreign share ownership is generally permitted, see Can a Foreigner Own 100% of a Turkish Company?.

5. Foreign-capital Turkish companies outside Article 36 are treated like domestic-capital companies for property acquisition

Article 36 expressly states that foreign-capital companies falling outside the first paragraphs acquire and use real estate and limited rights in rem within the rules applicable to domestic-capital companies. TKGM’s published guidance confirms this distinction.

Accordingly, “foreign shareholder” does not automatically mean “governor approval required.” A Turkish company with foreign capital may be outside Article 36 if the statutory ownership/control thresholds are not met. The Land Registry process depends on the company’s actual Article 36 classification.

TKGM guidance explains that the Trade Registry authorisation certificate is used to identify whether the company is within or outside Article 36. A company shown as outside the scope is processed under the general procedure applicable to domestic-capital companies, while its foreign-capital status is still recorded in the system.

The classification must be current. A certificate prepared before a material share transfer or governance change should not be relied on after the company’s control structure has changed.

6. Companies within Article 36 follow the governor’s-office and Land Registry procedure

The Presidency Investment Office’s current acquisition guidance states that Turkish companies with foreign capital falling within Article 36 first apply through the competent provincial authority at the governor’s office where the real estate is located. After a positive outcome, the company proceeds to the Land Registry Directorate for the title transaction.

The Article 36 Regulation governs the details for acquisition of ownership and limited rights in rem. The company should submit the property information, its current corporate/authority evidence and the documents needed to establish scope and intended use. The competent authorities then complete the legally required security and use evaluations.

The procedure should be built into the purchase agreement’s closing conditions. A company should not promise an unconditional closing date that assumes the administrative approval is already secured when the transaction legally requires the Article 36 process.

Where a preliminary sale agreement is used before title transfer, its form and annotation must independently comply with Turkish law. See Preliminary Real Estate Sale Agreement in Turkey: TBK Article 237.

7. Property in military prohibited/security areas or special security zones is subject to security restrictions

Article 36 preserves the restrictions arising from Military Forbidden Zones and Security Zones Law No. 2565. The statute and current official acquisition guidance subject acquisitions in designated military prohibited or military security areas to the relevant military/security permission framework and acquisitions in special security zones to the competent governor’s-office permission.

The purchaser should therefore identify the parcel before committing funds. A general statement that a Turkish company can buy real estate under Article 36 does not prove that a particular parcel is eligible.

Security-zone status is a property-specific question handled through the official administrative/registry process. Private seller assurances or estate-agent statements cannot replace the official determination.

The acquisition agreement should allocate the consequence if the legally required security approval is refused. Payment milestones, refund obligations and closing conditions should be written so that the company is not left with an unenforceable expectation to receive title to a prohibited parcel.

8. Article 36 contains express exceptions for specified transactions

Article 36 provides that its special procedure does not apply to several defined transaction categories. These include the creation of a mortgage; acquisition of real estate in the process of enforcing a mortgage by the mortgage beneficiary; and transfers of real-estate ownership or limited rights in rem arising from company mergers and demergers.

The statute also excludes acquisitions in special investment areas such as organised industrial zones, industrial zones, technology development zones and free zones. These acquisitions remain subject to the legislation governing those zones; the exception means the Article 36 mechanism itself is not applied to the listed transaction.

A further banking exception covers qualifying acquisitions by banks, subject to the continuing statutory requirement to dispose within the period required under the applicable law, where the acquisition results from transactions treated as credit under Banking Law No. 5411 or is made to collect receivables.

9. The company should prepare both corporate authority and property documentation

TKGM guidance requires the corporate authority documentation to show who can represent and bind the company for the real-estate transaction. For an Article 36 company, the relevant Trade Registry authorisation documentation should also reflect its Article 36 status in the manner required by current registry practice.

The property file should identify the province, district, neighbourhood/village, block, parcel and—where applicable—independent section accurately. The title record should be checked for mortgages, attachments, injunctions, usufructs, easements, annotations and other restrictions before the acquisition application is made.

Buildings require the ordinary property documentation relevant to the transaction, including compulsory earthquake insurance where legally required, municipal value data and condominium/construction documentation where material. Corporate buyers should also check zoning and building-use documents against the intended company activity.

If a representative will act for the company, the authority instrument must cover the relevant purchase, registry, payment, mortgage or other act. A general corporate position title does not necessarily prove authority to complete the specific Land Registry disposition.

10. Corporate property due diligence must cover both title risk and company-law purpose

A company buyer has two layers of due diligence. The first is ordinary property due diligence: registered ownership, encumbrances, zoning, construction status, condominium records, occupancy/building-use documentation, leases, environmental or sector restrictions and pending disputes affecting the property.

The second is Article 36/corporate due diligence: current foreign-share percentage, ultimate indirect ownership, management-control rights, articles-of-association activity, Trade Registry authority, the intended use and any required governor/security approval. A clean title alone does not prove that the corporate acquisition complies with Article 36.

Board or shareholder approvals should be obtained at the level required by the company’s articles and Turkish company law. Financing documentation should be coordinated with the title transaction, especially where a lender’s mortgage is created simultaneously.

The transaction’s taxes and fees should be modelled separately. For the general title-transfer cost structure, see Cost of Buying Property in Turkey 2026. Corporate tax and VAT consequences depend on the concrete transaction and seller/buyer status.

11. Article 36 property use can be monitored after acquisition

Article 36 states that the use of property acquired under the provision is monitored by the governor’s offices at intervals on the basis of Land Registry records. Compliance therefore does not end on the title-transfer date.

The company should use the property consistently with the legally permitted purpose and the activities stated in its articles of association. If the company’s activity, ownership/control or property use changes materially, the Article 36 implications should be reviewed rather than assuming that the original acquisition approval permanently resolves every later change.

M&A transactions deserve particular attention because Article 36 itself addresses threshold-crossing ownership changes. A corporate restructuring that brings a property-owning company within the foreign-control threshold can create a compliance event even without a new purchase deed.

12. Non-compliant acquisitions or use can trigger mandatory disposal and conversion to cash

Article 36 contains a direct sanction. Real estate and limited rights in rem found to have been acquired or used contrary to the Article 36 rules must be disposed of by the owner within the period granted by the competent public authority. If the owner does not complete the required disposal within that period, the property/right is liquidated and converted to cash, with the resulting amount paid to the right-holder under the statutory mechanism.

This makes pre-closing classification essential. A foreign-owned Turkish company should not treat Article 36 as a paperwork issue that can safely be corrected after purchase. Ownership percentage, control rights, corporate purpose, parcel eligibility and required approvals should be established before the economic commitment becomes irreversible.

Conclusion

A foreign-owned Turkish company can buy property in Turkey, but its procedure depends on Land Registry Law Article 36. A Turkish company is within the core Article 36 regime if qualifying foreign investors hold at least 50% of its shares or control appointment/removal of the majority of management-right holders. The property must be acquired and used for activities specified in the company’s articles, and the special approval/security process applies unless an express statutory exception governs the transaction.

The safest corporate closing sequence is to classify the company under Article 36, confirm the corporate purpose and ultimate ownership, investigate the parcel, obtain the required administrative/security clearances, complete title due diligence and only then close the Land Registry transfer.