A Resort in Antalya: With Turkey’s new FDI law in place foreign property developers have been barred from developing resorts like this
A law allowing the sale of real estate in Turkey to foreign companies was annulled by Turkey’s Constitutional Court last Friday. In an attempt to gain entry to the EU, Turkey’s centre-right government previously approved the law allowing the sale of Turkish property to foreign individuals and businesses. This however changed on Friday when the ruling of Turkey’s Constitutional Court favoured the nationalist-leaning Republican People’s Party.
This decision by the court would ultimately affect companies specifically set up to acquire property in Turkey by foreign investors through joint ventures.
Prior to this recent development, foreign investors set up joint venture Turkish firms to acquire real estate restricted to only Turkish citizens. The restrictions to foreign buyers buying property in Turkey include a limit of 30 hectares on a single land purchase, military zones & rural lands.
There has already been some notable opposition in the Turkish Government; Kemal Unakitan, Turkey’s Finance Minister said, after the ruling, “This does not help our efforts to attract foreign investors into Turkey”.
There is quite a lot of uncertainty as to how this ruling will affect the numerous IPOs planned in the Turkish property sector this year. The one thing that is for certain is that foreign property developers in Turkey seeking to purchase land for projects would be the hardest hit by this law.
For more details and assesment on the changes to Turkey’s Foreign Direct Investment Law, read Berk Cektir’s 3 part assesment.