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The Turkish Constitutional Court has cancelled part of the Foreign Direct Investment Law that allowed non-Turkish companies to own property in Turkey. Although the legal change does not affect individual property investors, the move may well impact on future property development in the region.
The challenge to the Foreign Direct Investment Law was made by two deputies in the Republican Peoples Party who argued that there was a lack of clarity with regard to foreign companies investing within Turkey, and that the law now placed no restrictions on foreign ownership of Turkish property. Restrictions on inward investment in Turkish property have long been a feature of the law and it was suggested that the Foreign Direct Investment Law effectively abolished long held legal practice in the country.
The annulment of the subsection of the Foreign Direct Investment Law will not come into action for six months leaving foreign firms free to invest within this period and no action will be taken against existing firms that own property in the country.
Given the Turkish governments efforts to attract inward investment it appears likely that an amendment to the legislation will be enacted before the annulment of the sub article of the Foreign Direct Investment Law occurs.
29 March 2008
Author: Katie Morgan
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