TÜRKIYE Law and Practice Contributed by: Serkan Gül, Nazım Kurt and Türkay Avanaş, Hergüner Bilgen Üçer Attorney Partnership
5.3 REITs Real estate investment trusts (or trusts in general) are not regulated under Turkish law and therefore not available as an option to investors. The closest invest - ment instrument to these is REIFs. 5.4 Minimum Capital Requirement The minimum capital requirements are as follows: • The minimum capital amount for a REIC is TRY1.5 billion and TRY2.25 billion for REICs incorporated for infrastructure purposes. • The minimum asset pool for a REIF should be TRY250 million within one year of initiating the sale of participation shares to qualified investors. • Joint stock companies should be incorporated with a minimum capital amount of TRY250,000, one-quarter of which should be paid at the time of incorporation and the rest paid within 24 months of incorporation of the company. • Limited liability companies should be incorporated with a minimum capital amount of TRY50,000. There is no minimum payment requirement at the time of incorporation, and the total capital amount should be paid within 24 months of the company’s incorporation. 5.5 Applicable Governance Requirements Corporate law provisions are applied to SPVs as they are subject to the Turkish Commercial Code, including the capital maintenance rule, corporate benefit, etc. REICs are also subject to the corporate law require - ments stated under the Turkish Commercial Code. REICs and REIFs are also subject to capital markets regulations as they make use of funds provided by investors. 5.6 Annual Entity Maintenance and Accounting Compliance The cost of annual entity maintenance and account - ing compliance depends on the type and size of the investment.
The application procedure generally takes one to three months, depending on the time spent drafting the offi - cial designs (projects). Municipalities generally issue construction permits within one to three months. Third parties do not directly participate in the construc - tion permit procedure. However, affected third parties may submit a formal petition to the municipality for the revocation of a construction permit within the scope of the general right of petition. Such an application does not affect the validity of the construction permit. Under Turkish law, as a constitutional principle, all adminis - trative decisions are subject to judicial review. Thus, an affected party may file an administrative action seeking the annulment of the administrative act or claiming damages. Property rights-holders may chal - lenge the refusal of construction permits, unfavour - able revisions to zoning plans and parcellation plans, or any other administrative act. In addition, affected third parties (neighbours, etc) may file an action for annulment of a construction permit. 5. Investment Vehicles 5.1 Types of Entities Available to Investors to Hold Real Estate Assets SPVs, REICs and REIFs are the types of entities avail - able to investors to hold real estate assets. REICs and REIFs are preferred by real estate investors due to tax exemptions granted to such entities. REICs and REIFs are also preferable because these entities may create large-scale funds generated from the capital contributions of different investors. SPVs may also be advantageous as they are not subject to the restric - tions and specific conditions stipulated under the cap - ital markets legislation, such as valuation conducted under said legislation, etc. For this reason, SPVs are commonly used in practice. 5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity SPVs may be incorporated as a limited liability com - pany or a joint stock company in the form of a publicly or privately held company. REICs may be incorporated as a joint stock company in the form of a publicly held company. REIFs do not have any legal personality and may only be held by qualified investors.
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