Foreign Company Buys a Factory in Turkey: 30 Real Estate Due Diligence Checks Before Closing – 2026 Updated Guide

Foreign companies buying a factory in Turkey should review title, zoning, permits, environmental risks, utilities, taxes and hidden liabilities before closing. Learn the 30 essential checks for 2026.

Buying a factory in Turkey can provide a foreign company with production capacity, warehouse space, logistics advantages and long-term investment value. However, an industrial property transaction involves considerably more than checking the title deed and agreeing on a purchase price.

A factory may be affected by mortgages, attachments, zoning restrictions, missing permits, environmental contamination, unauthorized buildings, insufficient electricity capacity, public project decisions, tenant rights or hidden tax liabilities.

The transaction may also be structured as either an asset purchase or a share acquisition. These structures create different legal risks. Before closing in 2026, a foreign company should complete a detailed legal, technical, environmental and financial review.

Asset Purchase or Share Acquisition?

In an asset purchase, the foreign company acquires the factory property, land, buildings and possibly machinery. The buyer can examine and select the assets directly, but must carefully verify title, permits, liabilities and transfer requirements.

In a share acquisition, the foreign buyer acquires the company that owns the factory. The title may remain registered in the company’s name, but the buyer may inherit the company’s historic liabilities, disputes, tax problems, environmental obligations and unauthorized construction risks.

The purchase agreement should clearly state which assets are included, which liabilities remain with the seller and what happens if an undisclosed problem is discovered after closing.

30 Real Estate Due Diligence Checks Before Buying a Factory in Turkey

1. Verify the Seller’s Legal Identity

Confirm the seller’s full legal name, registration details, address, tax information and authority to sell the factory. If the seller is a company, review its corporate records and signing authority.

2. Confirm Ownership of the Land and Buildings

Check whether the seller is the registered owner of the land, buildings and independent units included in the transaction. The seller may own the land but not every structure located on it.

3. Review the Chain of Title

Examine previous transfers, acquisitions, inheritances, mergers, partition transactions and other title changes. Irregularities in the ownership history may create future cancellation or ownership claims.

4. Identify the Exact Parcel and Independent Units

The contract should precisely identify the parcel, block, building, floor, warehouse, production hall, office areas, parking areas, storage units and other included sections.

5. Check Mortgages and Bank Security

Determine whether the factory is subject to a mortgage, pledge, bank security or other financing arrangement. The purchase agreement should require the release of these encumbrances before or simultaneously with closing.

6. Search for Attachments and Enforcement Restrictions

Check whether creditors have placed attachments or enforcement restrictions on the property. A buyer should not assume that payment of the purchase price will automatically remove these restrictions.

7. Review Easements and Other Rights

Identify rights of way, utility easements, access rights, water rights, transmission lines, underground infrastructure and restrictions benefiting or burdening the property.

8. Investigate Annotations and Legal Restrictions

Review all title annotations, use restrictions, public rights, family residence claims, pre-emption rights, leases, promises to sell and other recorded limitations.

9. Check Co-Ownership and Inheritance Claims

If the property is jointly owned or inherited, confirm that every necessary owner has approved the transaction. A missing co-owner signature may create serious closing and title risks.

10. Verify Foreign Ownership Eligibility

A foreign company should confirm that it can acquire the property under the applicable ownership, activity, security-zone, land-size and registration rules. The buyer should obtain written confirmation before paying a non-refundable deposit.

11. Review the Current Zoning Plan

Confirm the property’s zoning status, permitted use, construction conditions, building density, height restrictions, setbacks and future development limitations.

12. Confirm That Industrial Use Is Permitted

A factory may not legally operate merely because industrial activity has historically taken place there. Verify that the intended production, storage, processing or logistics activity is permitted at the location.

13. Check Building and Construction Permits

Review the original construction permits, amendments, additional permits and approved technical documents. Missing or inconsistent permits can affect use, financing, insurance and future resale.

14. Confirm the Occupancy and Use Authorization

Determine whether the buildings have the necessary occupancy or use authorization. A factory may have a building permit but still lack permission to be lawfully occupied or operated.

15. Compare Approved Plans With the Actual Buildings

A technical inspection should compare the registered and approved plans with the buildings on the ground. Differences may include additional floors, storage areas, production halls, offices or extensions.

16. Investigate Unauthorized Construction

Check for unlicensed structures, enclosed outdoor areas, additional warehouses, unauthorized machinery foundations, altered roofs and other works not reflected in official records.

17. Review Structural and Earthquake Safety

Obtain an independent technical assessment of the factory’s structural condition, earthquake resistance, fire safety, roof, foundations, production halls and heavy-equipment areas.

18. Verify Parcel Boundaries and Survey Information

A professional survey should confirm the boundaries, land area, building locations, fences, loading areas, parking spaces and possible encroachments onto neighboring land.

19. Confirm Legal Access to the Property

Verify that the factory has lawful road access and that trucks, employees and emergency vehicles can reach the site. A physical road may exist without a legally protected access right.

20. Investigate Public Projects and Expropriation Risks

Check whether the property is affected by planned roads, railways, energy lines, public facilities, infrastructure projects, protected areas or other decisions that may restrict its use or lead to expropriation.

21. Conduct Environmental Contamination Checks

Factories may have soil, groundwater or building contamination caused by fuel, chemicals, heavy metals, waste, storage tanks or previous industrial activities. An environmental report should identify historic and current risks.

22. Review Environmental and Waste Obligations

Determine whether the factory requires environmental permits, waste-management arrangements, emissions approvals, hazardous-material procedures or ongoing reporting obligations.

23. Check Electricity Capacity and Energy Connections

Confirm the electricity connection, contracted capacity, transformer ownership, energy infrastructure and whether the current capacity is sufficient for the buyer’s planned production.

24. Verify Water, Gas, Telecommunications and Drainage

Review water supply, industrial water availability, natural gas, wastewater, drainage, telecommunications and other utility connections. Outstanding utility debts and capacity limitations should be identified before closing.

25. Investigate Tenants and Occupants

Check whether any part of the factory is leased, occupied by a third party or used by employees, contractors, former owners or related companies. Existing possession rights may affect delivery.

26. Review Leases and Third-Party Contracts

Examine warehouse leases, equipment leases, service contracts, access agreements, maintenance arrangements, security contracts and other third-party rights connected to the property.

27. Check Property Taxes and Municipal Liabilities

Confirm whether property taxes, waste charges, utility debts, municipal penalties or other public liabilities are outstanding. The agreement should allocate pre-closing and post-closing liabilities clearly.

28. Review Insurance and Previous Damage

Obtain information about fire, earthquake, flood, machinery, business interruption and liability insurance. Investigate previous claims, fires, structural damage, floods and repeated insurance disputes.

29. Verify Machinery, Fixtures and Installed Equipment

Determine which machinery, cranes, tanks, generators, production lines, solar systems and fixtures are included in the sale. Check ownership, financing, leasing, attachment and removal rights.

30. Protect the Closing With Contractual Safeguards

The purchase agreement should include conditions precedent, seller warranties, indemnities, escrow or retention arrangements, title-transfer requirements, permit obligations, release of encumbrances and remedies for undisclosed defects.

Documents a Foreign Buyer Should Request

Before closing, the foreign company should request:

• Current title records;
• Ownership and encumbrance information;
• Zoning documents;
• Building and occupancy permits;
• Approved architectural and technical plans;
• Environmental reports;
• Technical inspection reports;
• Utility records;
• Tax and municipal payment documents;
• Insurance policies and claim history;
• Lease and service agreements;
• Corporate authorization documents;
• Litigation and enforcement information;
• Machinery ownership records;
• Previous valuation reports.

All documents should be reviewed together. A clean title record does not prove that the building is fully permitted, environmentally safe or suitable for the intended industrial activity.

Red Flags That Should Delay Closing

The foreign buyer should consider delaying closing if:

• The seller refuses to provide title records;
• The seller is not the registered owner;
• A mortgage cannot be released;
• The factory lacks essential permits;
• The actual building differs from the approved project;
• Environmental contamination is suspected;
• Access depends on an undocumented road;
• Electricity capacity is insufficient;
• A public project affects the land;
• A tenant refuses to leave;
• The seller rejects warranties and indemnities;
• The purchase price is demanded before due diligence is completed.

A low purchase price does not necessarily compensate for title, environmental or permit risks.

Key Contract Clauses for a Factory Purchase

The purchase agreement should regulate:

• Exact property and asset identification;
• Purchase price and payment schedule;
• Conditions precedent;
• Title transfer;
• Release of mortgages and attachments;
• Delivery of possession;
• Permit warranties;
• Environmental warranties;
• Tax allocation;
• Hidden liability protection;
• Indemnity limits;
• Escrow or retention;
• Technical defects;
• Termination rights;
• Dispute resolution;
• Governing law;
• Post-closing assistance.

If the buyer is acquiring shares instead of the property itself, the agreement should contain a broader indemnity system covering historic company liabilities.

2026 Considerations for Foreign Factory Buyers

In 2026, foreign companies should not rely on an old due diligence report, outdated valuation or previous owner’s informal statements. Zoning, permits, environmental obligations, utility capacity and public restrictions may change over time.

The buyer should obtain updated records close to closing and make title transfer conditional upon the seller correcting material defects. A foreign company should also ensure that corporate documents, powers of attorney and translations are prepared correctly for use in Turkey.

Lawyer Fırat Fesih Kaya can coordinate legal review of the title, purchase agreement, permits, encumbrances and closing documents for a foreign company buying an industrial property.

Conclusion

Buying a factory in Turkey requires a coordinated legal, technical, environmental and financial investigation. The most serious problems are often not visible during a property tour and may only appear after title transfer.

A foreign buyer should verify ownership, zoning, permits, environmental history, structural condition, utilities, access, taxes, tenants, machinery and contractual protections before closing. Careful due diligence can prevent expensive disputes and protect the buyer’s production plans.

Frequently Asked Questions (FAQ)

1. Can a foreign company buy a factory in Turkey?

A foreign company may be able to acquire a factory, subject to applicable ownership, activity, security-area and registration requirements. Eligibility should be confirmed before signing.

2. Is checking the title deed enough when buying a factory?

No. Title review is essential, but zoning, permits, environmental risks, structural safety, utilities, access and unauthorized construction must also be investigated.

3. What happens if the factory has a mortgage?

The mortgage should generally be released before or simultaneously with closing. The purchase agreement should require documentary proof of release.

4. Can a factory operate without an occupancy authorization?

A building may physically exist without having all necessary authorization for lawful use. The buyer should verify the relevant permits before completing the purchase.

5. Who is responsible for environmental contamination discovered after closing?

Responsibility depends on the purchase agreement, the cause of contamination, applicable environmental obligations and the parties’ conduct. Specific environmental warranties and indemnities are important.

6. Can the buyer cancel the purchase after discovering unauthorized construction?

Possibly, depending on the contract, the seriousness of the defect, seller representations and whether correction is possible. The agreement should include inspection and termination protections.

7. What if the factory is occupied by a tenant?

The buyer should determine whether the tenant has a valid lease and whether vacant possession is required. Existing possession rights may continue after the sale.

8. Can the purchase price be paid before all due diligence is completed?

Paying a non-refundable amount before title, permit and environmental checks are completed creates significant risk. Any deposit should be protected by clear contractual conditions.

9. Should a foreign company buy the factory’s shares or the property directly?

The better structure depends on taxes, liabilities, financing, permits, business operations and the buyer’s objectives. A share purchase may transfer historic company liabilities.

10. Does a foreign company need a lawyer before buying a factory in Turkey?

Professional legal assistance is strongly recommended because factory transactions involve title, zoning, environmental, corporate, tax, construction and contractual risks.

This article is provided for general informational purposes only and does not constitute legal advice. We recommend consulting a lawyer about your specific circumstances to avoid any loss of rights.

Expert Legal Support

Buying an industrial property involves risks that may not be visible from the title deed or physical inspection. Fırat Fesih Kaya Law Office provides legal assistance to foreign companies in factory purchases, industrial property due diligence, title review, zoning and permit checks, environmental risks, purchase agreements and closing protection.

For a case-specific legal assessment, contact our office:

Lawyer: Fırat Fesih Kaya
Call: +90 312 434 22 22
WhatsApp: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Office: Mevlana Boulevard No:221, Yildirim Tower, Office No:148, Balgat, Cankaya, Ankara, Turkey