Last Updated on 28/11/2023
In this guide on how to create Real Estate Funds in Turkey, we will navigate the intricate landscape of real estate investment in one of the world’s most promising markets. In fact, Turkey emerged as a hub for investors seeking diversification and growth opportunities, particularly within the real estate sector. Therefore, this guide aims to demystify the process offering an in-depth exploration of strategic considerations involved in creating real estate funds in Turkey.
How to create Real Estate Investment Funds in Turkey
To create real estate funds in Turkey presents a compelling opportunity for foreign investors seeking diverse investment prospects. Consequently, the Capital Markets Board established a spectrum of laws governing the formation of various investment funds Therefore, it created a notably comprehensive framework for establishing these funds in Turkey. Besides, among the prevailing structures, the real estate investment fund (REIF) stands as one of the most widely utilized.
Our team, well-versed in Turkish company formation, can provide comprehensive insights into the legislative landscape governing the process to create real estate investment funds.
Prerequisites for Initiating a Turkish Real Estate Investment Fund
Foreign investors intending to create real estate investment funds in Turkey can only do so under the guise of collective investment schemes. A portfolio management company must establish and manage funds. Besides, permissible investments for Turkish companies under the umbrella of real estate funds encompass a range of assets, including:
- Properties and property-related rights
- Shares in public Turkish companies
- Deposits and participations
Procedure for Establishing a Real Estate Fund in Turkey
Real estate investment funds in Turkey are exclusively accessible to qualified investors possessing assets at a minimum value of 1 million Turkish Lira. Moreover, the minimum capital requisite to create a real estate investment fund in Turkey stands at 10 million Turkish Lira. Consequently, owners or managers of the fund must formulate a prospectus, which subsequently undergoes scrutiny by the CMB for approval. Furthermoore, a minimum of 80% of the fund’s assets must include real estate holdings, under the guardianship of a custodian entity, such as a bank or an insurance company.
Yet, one of the key benefits of Turkish real estate investment funds is their exemption from corporate taxes. Thus, our company formation advisors in Turkey can furnish further details on the advantages intrinsic to initiating real estate investment funds in this locale, as well as guide you through the company registration process.
FAQ about Creating real estate funds in Turkey
Q: What do real estate funds entail?
A: Real estate investment funds are financial pools based on fiduciary ownership principles. Besides, they generate returns for investors by allocating capital to real estate and real estate-centered projects.
Q: What benefits do real estate funds offer?
A: Investors purchasing real estate investment funds benefit from rental income and potential appreciation in property value. Consequently, these funds ensure a consistent income and value growth within a transparent framework. SPK (Capital Markets Board) conducts oversights.
Learn More About How Real Estate Investment Offers Lucrative Long-Term Profits
Q: Who can invest in real estate funds?
A: Only qualified investors are eligible to invest in these funds. Therefore, to become a qualified investor, possessing assets worth one million Turkish Lira is sufficient.
Q: Can foreigners participate in real estate funds in Turkey?
A: Yes, if a foreign individual qualifies as an investor, they can invest in real estate funds in Turkey.
Q: Can investing in real estate funds lead to Turkish citizenship?
A: Indeed, foreigners investing $500,000 in real estate funds can acquire Turkish citizenship, representing one of the quickest pathways to obtain it.
Q: How are taxes managed for real estate fund investments?
A: Dividends and incomes of individual investors involving in these funds are exempt from income tax. Therefore, profits from investing in real estate funds are subject only to a 10% stoppage tax and do not require declaration.
Q: Is my investment secure in real estate funds?
A: SPK-endorsed portfolio safeguardes Shares of participation in real estate investment funds. Besdides, Real estate valuations perform by SPK-approved valuation entities. Additionally, these funds undergo independent audits.
Q: What types of properties can real estate funds invest in?
A: As outlined in the fund’s documents, these funds can invest in real estate assets like land, residential properties, offices, shopping centers, hotels, logistics centers, warehouses, parks, hospitals, and similar real estate ventures.
Q: How can one exit from these funds?
A: In temporary funds, exits are automated at the term’s conclusion. However, for permanent funds, participation shares can be returned to the fund as stipulated in the documents. Therefore, exits can be executed following the guidelines specified in the issuing documents. Consequently, temporary funds, as detailed in the issuing documents, allow exits during the fund’s duration.
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Our expert consultants can extend support, covering bookkeeping, payroll, assistance with tax registration, risk evaluation, and customized evaluation services upon request. Thus, equipped with comprehensive knowledge of relevant legislation, we streamline the necessary procedures for your company. Consequently, our professionals offer insights on tax minimization options upon reaching out.