Buying a Property in Turkey – Turkey is one of the most popular countries to invest in foreign investors due to its geopolitical position, and quality workforce, and also a high percentage of young people of the total population.
Thanks to the “Foreign Direct Investment Law” that has come into our lives nearly 20 years ago, the obstacles in front of investors have been removed and investors have been provided with different advantages. Moreover, Turkish people that live abroad can benefit from these advantages.
The number of foreign companies and investors is increasing exponentially in Turkey. Therefore, we have summarized the advantages of investing in Turkey for foreign nationals and Turks living abroad.
What kind of advantages does turkey offer to foreign investors?
Foreigners who are considering making direct investments can benefit equally from the opportunities provided to Turkish citizens. Direct investment can be made in the form of opening a company or a branch in our country or partnership in an existing company. On the other hand, there is no incentive for foreigners in indirect investments to be made by purchasing stocks or bonds.
We can summarize the situation as follows. People who prefer long-term investment or foreign direct investment in Turkey can benefit from the opportunities offered by the Republic of Turkey.
However, foreign investors who intend to invest in our country can transfer their earnings arising from their commercial activities in our country to different countries in return for profit, sales, liquidation, compensation and similar agreements to different countries.
In addition to all these we mention, people who want to invest in Turkey can easily benefit from investment place allocations, tax deductions, insurance premiums, and similar government incentives.
There are special tax regulations for foreigners
There are various partnership agreements in order to avoid paying taxes in Turkey and their own countries. For example, a German or a Russian who invests in our country only pays tax to Turkey because of their activities in Turkey. There is no need to pay tax to Germany or Russia for their activities.
The countries that Turkey agrees to prevent double taxation are as follows.
The US, France, Russia, China, South Korea, Qatar, Malaysia, Singapore, Azerbaijan, Georgia, Iran, TRNC., Jordan, Pakistan.
What kind of companies can foreign investors establish in Turkey?
Buying a Property in Turkey – Foreign investors who want to invest in Turkey, have the right to establish joint-stock, limited, and unlimited companies. Individual companies without corporate structures such as unlimited companies; although it provides some advantages due to the fact that they can be established within a few days and their low costs, investment foreigners mostly prefer the joint-stock and limited company type in Turkey.
Buying a property in Turkey
When establishing a company, the headquarters, title, authorized manager, and capital structure of the company should be carefully determined. Then, notarized company documents must be recorded in the central commercial systems and applied to the relevant registry offices. Documents prepared abroad must be approved by the consulate or notary. In addition, if the company partners are not Turkish citizens, a potential tax number must also be obtained.
We usually witness that foreign investors prefer to take over ready-made companies instead of dealing with this type of paperwork and establishment.
However, a foreign person or entity may open a branch or liaison office in Turkey. These branches do not have a capital annotation during the establishment phase, but this branch must also be registered with the trade registry office.
What are the taxation conditions for foreign investors?
In Turkey, the rate of institutions’ tax for joint-stock and limited companies is 20 percent. In addition, related persons and investors have to pay income tax on their earnings during the year. The personal income rate is between 15 percent and 35 percent.
There are tax exemptions offered to foreign investors by the state in various periods. In addition, Turkey is a country of the counterparty to the agreements that prevent double payment of taxes for foreign investors. It is increasing the number of countries being a counterparty to the agreement and it is getting quite advantageous to invest in Turkey.