TÜRKIYE Law and Practice Contributed by: Serkan Gül, Nazım O Kurt and Türkay Avanaş, Hergüner Bilgen Üçer Attorney Partnership
per se but rather an administrative approval pro - cess. Agreements may be necessary in an ancillary fashion, such as contractors needing to sub - scribe to utilities for consumption during the con - struction phase. Additionally, developers need to apply to the municipalities for the appointment of a licensed construction audit company. 4.7 Enforcement of Restrictions on Development and Designated Use If the planned construction does not comply with zoning conditions and designated use, the municipality will not issue a construction permit. Moreover, if the planned activities do not comply with designated use, it is not possible to obtain a workplace opening and operation 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 available 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 advan - tageous as they are not subject to the restric - tions and specific conditions stipulated under the capital 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 company 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. 5.3 REITs Real estate investment trusts (or trusts in gener - al) are not regulated under Turkish law and there - fore not available as an option to investors. The closest investment instrument to these is REIFs. 5.4 Minimum Capital Requirement The minimum capital requirements are as fol - lows: • The minimum capital amount for a REIC is TRY1 billion and TRY1.5 billion for REICs incorporated for infrastructure purposes. • The minimum asset pool for a REIF should be TRY200 million within one year of initiating the sale of participation shares to qualified investors. • Joint stock companies should be incorpo - rated 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 incor - porated 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
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