Last Updated on 28/11/2023
The world of real estate investment has evolved, offering diversified options for both local and international investors. Turkey, with its flourishing real estate market, is an attractive destination for those seeking to explore real estate funds. In this article, we will delve into the opportunities and advantages of investing in real estate funds in Turkey, and why this investment avenue is worth your consideration.
Unlocking the Potential of Real Estate Funds in Turkey
Real Estate Fund in Turkey is an investment vehicle that aggregates the savings of individuals and pools them together for evaluation and management by skilled professionals. Moreover, it provides a convenient and efficient means for investors to participate in the country’s property market without the responsibilities of direct property ownership, management, or financing. Consequently, these funds are managed by seasoned professionals who strategically select and oversee a diverse portfolio of real estate assets. Here’s why delving into the real estate fund market in Turkey is a compelling choice.
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Why invest in Real estate funds in Turkey
Assets Diversification
Real estate funds offer an enticing opportunity for diversification. By pooling resources from various investors, real estate funds can acquire an array of property types, including residential, commercial, and industrial properties in Turkey and beyond. Consequently, diversification helps mitigate risk and enhances the potential for consistent returns.
Accessibility and Liquidity
Investing in real estate funds in Turkey is accessible to both local and international investors. Besides, these funds provide liquidity, offering the flexibility to enter or exit your investment more readily compared to owning physical properties. It can be less flexible and time-consuming to sell.
Professional Management
The advantage of real estate funds in Turkey lies in their professional management. Expert professionals with a deep understanding of the local property market perform due diligence, make informed investment decisions, and handle the day-to-day management of properties. Furthermore, this expertise can optimize returns and minimize risks. Therefore, it provides peace of mind for investors.
Passive Income Streams
Real estate funds in Turkey generate income through rental income and potential capital gains. Thus, as an investor, you benefit from regular distributions of rental income. And this provides a steady stream of passive income. Moreover, it can be particularly appealing for those looking to supplement their primary income.
Tax Efficiency
Turkey offers favorable tax treatment to real estate fund investors. In fact, to begin, these funds are not subject to corporate taxation. This means they are exempt from paying taxes on their trading and rental profits.
Furthermore, foreign corporate investors in the fund are not liable for taxation, while foreign individual investors in the fund are subject to a mere 10% withholding tax.
read more about Turkish government increases rates of Taxes in Turkey
Regulatory Oversight and Transparency
The market of Real estate funds in Turkey is subject to robust regulation. Consequently it ensures transparency and investor protection. Besides, government oversight and stringent reporting requirements enhance market trustworthiness and safeguard the security of your investments.
In fact, the Capital Markets Board of Turkey ensures compliance with and continuous monitoring of fund activities in accordance with the Bylaw and Issuance Certificate.
It is mandatory to provide investors with updates and changes related to the fund through the Public Disclosure Platform website, similar to the practices followed for investments in publicly traded companies and other securities. This is because all fund transactions are subject to governmental oversight, allowing investors to verify the status of the fund in which they have purchased participation shares.
It is important to note that Portfolio Management Companies are not permitted by law to hold investors’ funds or maintain them in their accounts. Instead, a Custodian Institution (usually a bank) authorized by the Capital Markets Board takes on the responsibility of safeguarding these funds.
A quick path for Turkish Citizenship by investment
The eligibility criteria for obtaining Turkish Citizenship have been outlined in the guidelines established by the Regulation for Implementing Turkish Citizenship Law No. 5901. In line with the most recent amendment introduced in 2018, foreigners who invest a sum of 500,000 USD or the equivalent amount in foreign currency or Turkish Lira in a real estate investment fund, maintaining this investment for a minimum of three years, will qualify for Turkish Citizenship. The ‘Certificate of Conformity,’ confirming the fulfillment of the minimum investment requirement, is issued by the Capital Markets Board.
Conclusion
Investing in real estate funds in Turkey presents an efficient means of gaining exposure to the country’s flourishing property market. This investment avenue offers diversification, professional management, passive income, accessibility, and tax benefits. Turkey’s economic resilience, coupled with regulatory oversight, makes it an enticing choice for investors with varying goals and risk tolerances.
