Foreign Company Buys Commercial Property but Cannot Obtain a Business License in Turkey: Seller Liability (2026 Updated Guide)

A foreign company buys commercial property in Turkey but cannot obtain a business license because of zoning, occupancy, construction or use restrictions. Learn when the seller may be liable, whether the sale can be challenged and which remedies foreign investors should consider.

A foreign company may purchase a shop, office, warehouse, restaurant premises, factory, clinic, hotel property or other commercial real estate in Turkey for one specific purpose: to operate a particular business from that property.

The purchase may be completed, the full price paid and substantial additional capital invested in renovation, machinery, furniture, employees and business preparation.

Then the company applies for an opening and operating licence and receives unexpected news:

The business cannot legally operate from the property.

The reason may be a zoning restriction, missing or incompatible occupancy documentation, unauthorized construction, an incorrect registered or approved use, fire-safety deficiencies, condominium restrictions, environmental requirements or incompatibility between the property and the intended commercial activity.

Under the Regulation on Opening and Operating Licences, a workplace falling within the regulatory framework cannot lawfully be opened and operated without the required licence from the competent authority. The regulation also imposes activity-specific and property-related requirements that must be satisfied before lawful operation.

For the foreign buyer, the problem then becomes more than an administrative licensing dispute. If the seller knew the buyer’s intended business and represented that the property was legally suitable for that purpose, seller liability may become one of the most important routes for recovering the investment loss.

Buying Commercial Property Does Not Guarantee a Business Licence

This distinction should be understood before any commercial-property acquisition.

A title deed proves ownership.

It does not automatically prove that the buyer can conduct its intended business at the property.

A company may legally own commercial premises while being unable to obtain the administrative authorization necessary to operate the intended business there.

Why Can a Business Licence Be Refused?

The exact reason must be identified before deciding whether the buyer should challenge the administration or pursue the seller.

Potential problems include:

incompatible zoning,

missing occupancy documentation,

unauthorized construction,

approved use inconsistent with the business,

fire-safety deficiencies,

environmental requirements,

condominium restrictions,

location restrictions,

missing technical requirements, or

sector-specific licensing conditions.

Different problems produce different remedies.

The First Question: What Exactly Did the Foreign Company Intend to Do?

The intended use should be defined precisely.

There is a major difference between purchasing property for:

an ordinary office,

restaurant,

medical facility,

manufacturing plant,

logistics warehouse,

hotel,

food-production business,

chemical storage facility, or

retail operation.

A property suitable for one activity may be unsuitable for another.

Did the Seller Know the Intended Business?

This is extremely important when assessing seller liability.

Suppose the buyer simply purchases a commercial unit without explaining how it will be used.

That presents one factual situation.

Now suppose the buyer repeatedly tells the seller:

“We are purchasing this property specifically to open a restaurant.”

The seller responds:

“There is no licensing problem. This property is suitable for restaurant use.”

That creates a materially different evidentiary situation.

Put the Intended Use in the Purchase Agreement

For substantial commercial acquisitions, the contract should ideally identify the intended commercial purpose where that purpose is fundamental to the transaction.

For example:

“The purchaser intends to acquire and use the property as a logistics and distribution centre.”

This can make it easier to establish why the property’s legal suitability was material to the purchase decision.

What Did the Seller Actually Promise?

Not every optimistic statement has the same legal significance.

Compare:

“This is a good location for restaurants.”

with:

“This property is legally approved for restaurant use and all necessary property-related licensing conditions are satisfied.”

The second statement concerns an existing legal characteristic and can be far more significant if false.

Preserve Every Pre-Sale Representation

The buyer should immediately preserve:

purchase agreement,

preliminary agreement,

seller warranties,

due-diligence responses,

emails,

WhatsApp messages,

advertisements,

brochures,

property listings,

broker communications,

technical reports, and

documents supplied during negotiations.

These materials can establish what the seller represented before the purchase.

A Business Licence Is a Separate Administrative Requirement

The applicable regulation defines the opening and operating licence as the authorization issued by the competent authority allowing the workplace to open and operate.

It also expressly provides that a workplace cannot be opened and operated without the required licence.

Therefore, ownership and licensing should never be treated as the same thing.

Do Not Begin Operating Without the Required Licence

A foreign company that has already invested substantial money may be tempted to begin operating while attempting to resolve the licence problem.

This can create additional regulatory exposure.

The safer approach is to determine why the licence cannot be issued and whether the deficiency can lawfully be corrected.

Zoning Can Be the Fundamental Problem

The property may physically look perfect for the proposed activity while the zoning plan does not permit that use.

For example, the investor may buy a property for manufacturing while the applicable planning framework permits only another form of commercial or storage activity.

In that situation, changing furniture, machinery or interior design does not solve the underlying planning problem.

The Building’s Approved Use Must Be Checked

Obtain:

building permit,

approved architectural project,

occupancy documentation,

project revisions,

municipal archive documents, and

applicable planning information.

Then compare the approved use with the buyer’s intended business.

Construction Legality Can Affect Business Licensing

A property may be described as commercial but contain unauthorized construction.

Examples include:

unauthorized mezzanine floors,

enclosed terraces,

additional rooms,

warehouse extensions,

basement conversions, or

structural changes inconsistent with approved plans.

Official guidance referencing Danıştay jurisprudence confirms the importance of planning compliance when evaluating workplace licensing; premises located in structures contrary to planning requirements can face serious licensing obstacles.

A Seller May Say “The Previous Business Had a Licence”

That statement should be verified.

Ask for:

the previous licence,

licensed activity,

licence holder,

licensed address,

licence date, and

any later cancellation or enforcement records.

The existence of an earlier licence does not automatically guarantee that the foreign buyer can conduct a different activity.

Change of Operator Does Not Always Require Starting From Zero

The licensing regulation contains a specific rule for transfer of a workplace.

Where the activity stated in the licence and the address remain unchanged, a new licence may generally be issued in the new operator’s name upon application, based on the information and documents already in the file.

This can be extremely useful in a business acquisition.

However, it does not mean every new activity can simply inherit the old licence.

Changing the Activity Can Change the Licensing Position

Suppose the previous owner operated an ordinary retail warehouse.

The foreign buyer wants to use the property for manufacturing.

The old licence may provide little assistance if the activity changes materially.

For certain regulated establishments, the licensing regulation expressly requires a new licence where the field of activity changes.

The intended post-acquisition operation should therefore be assessed independently.

Seller Liability Becomes Stronger Where the Problem Existed Before the Sale

Suppose the property was already legally unsuitable for the buyer’s intended business when the transaction closed.

Possible examples include:

zoning already prohibited the activity,

the building had unauthorized additions,

the approved use was incompatible,

a previous licence application had been rejected, or

the municipality had already warned the seller about the problem.

If the seller knew or should contractually have disclosed these circumstances, the buyer’s position may become substantially stronger.

A Previous Licence Refusal Is Critical Evidence

One of the first investigations should be whether the seller previously attempted to obtain the same or a similar licence.

If the seller had already received a written refusal but later told the foreign buyer:

“There is no problem obtaining the licence,”

the earlier refusal can become highly significant evidence.

Obtain the complete administrative file where possible.

Previous Municipal Correspondence Should Be Investigated

Search for:

licence applications,

licence refusals,

inspection reports,

warnings,

closure decisions,

zoning correspondence,

construction stop records, and

permit-related proceedings.

The seller’s knowledge may be demonstrated through official documents predating the sale.

What if the Seller Did Not Know About the Problem?

That can affect the legal analysis, but it does not automatically end the buyer’s potential remedies.

The relevant questions can include:

what characteristics were contractually promised,

whether the property had the represented qualities,

whether the defect or restriction materially affected the intended use,

and

what contractual risk allocation was agreed.

Intentional concealment and innocent inaccuracy are not necessarily treated identically.

Intentional Concealment Can Be Much More Serious

Suppose the seller received a municipality decision expressly stating that the property could not be used for the intended activity.

The seller does not disclose the decision.

Instead, the seller tells the foreign company that licensing is straightforward.

That scenario is substantially different from a situation in which neither party was aware of an unexpected regulatory problem.

Preserve evidence of the seller’s knowledge.

Data-Room Records Can Become Central Evidence

In a corporate or high-value real estate transaction, preserve the due-diligence data room.

Determine:

which licences were uploaded,

which municipal documents were disclosed,

which documents were omitted,

what questions the buyer asked, and

how the seller responded.

A post-closing dispute may turn on this history.

Seller Warranties Should Be Reviewed Line by Line

Look for representations concerning:

lawful use,

zoning compliance,

building permits,

occupancy permits,

absence of unauthorized construction,

business licences,

absence of administrative proceedings,

absence of closure decisions, and

compliance with applicable regulations.

A specific warranty can materially strengthen the buyer’s contractual position.

General “As Is” Language Does Not Answer Every Question

Commercial property agreements sometimes contain broad clauses stating that the buyer inspected and accepted the property.

The legal effect of such provisions must be examined in context.

They should not automatically be assumed to protect a seller against every allegation involving express warranties, concealed information or intentional misrepresentation.

The exact wording matters.

The Buyer’s Due Diligence Also Matters

A foreign company should investigate the property’s regulatory suitability before closing.

However, due diligence and seller representations are separate issues.

The fact that the buyer could investigate official records does not necessarily make an affirmative false statement by the seller irrelevant.

The complete transaction history should be examined.

Was the Licence a Condition Precedent?

This can be decisive.

A carefully structured acquisition may provide that closing occurs only if:

the required business licence is obtained,

a zoning confirmation is received,

the occupancy status is verified, or

another essential regulatory approval is secured.

If the condition is not satisfied, the buyer may avoid completing the acquisition.

What if the Buyer Already Paid the Full Price?

Then the available remedies must be assessed after establishing the exact defect and contractual position.

Possible strategies may include:

correcting the licensing problem,

challenging an unlawful licence refusal,

seeking a price adjustment or damages,

pursuing contractual indemnification, or

where legally justified, seeking to unwind the transaction.

The appropriate remedy depends heavily on the facts.

Can the Sale Be Rescinded?

Potentially, depending on the seriousness of the problem, contractual terms, seller representations and applicable private-law rules.

A property being temporarily unable to obtain a licence because of a correctable document deficiency is very different from a property that can never lawfully accommodate the business for which it was purchased.

The investor should establish whether the problem is temporary or fundamental before selecting the remedy.

Price Reduction May Be More Commercially Rational

The foreign company may still want the property.

For example, the intended activity may be prohibited, but another profitable commercial use may remain possible.

In that case, unwinding the transaction may not be the preferred outcome.

A price-reduction or damages strategy may deserve consideration where legally available.

Obtain an Independent Valuation

The investor should compare:

purchase price,

value assuming the represented business use,

value under actual lawful use,

cost of correcting licensing problems,

conversion costs,

fit-out losses, and

alternative-use value.

This can be crucial for quantifying a claim.

Fit-Out Expenses Can Be Significant

A foreign company may have already spent heavily on:

renovation,

machinery,

commercial kitchens,

racking,

ventilation,

cold storage,

electrical infrastructure,

signage,

furniture, and

specialized equipment.

Preserve invoices and contracts.

Whether all such expenditure is recoverable is a separate legal question, but the evidence should be secured immediately.

Lost Profits Are More Difficult Than Documented Expenditure

The buyer may claim:

“We expected to make substantial profit from this location.”

Expected profit can be commercially important, but future earnings often present more complex causation and proof issues than actual expenditure.

Maintain separate calculations for:

actual loss,

property-value difference, and

expected future profit.

What if the Seller Guaranteed That a Licence Would Be Issued?

The precise wording matters.

There is a difference between:

“We do not know of any obstacle to licensing,”

and:

“The property satisfies all requirements and the operating licence will be obtained.”

The stronger and more specific the representation, the more important it may become in the contractual dispute.

What if the Real Estate Agent Made the Promise?

Preserve the agent’s representations separately.

The seller may say:

“We never promised that.”

The broker may have advertised:

“Fully suitable for restaurant licensing.”

Keep:

listing screenshots,

messages,

emails,

brochures, and

voice communications lawfully available to the buyer.

Agent responsibility and seller responsibility should be analyzed separately.

What if the Property Was Advertised as “Turnkey”?

Expressions such as:

“turnkey restaurant,”

“licence-ready clinic,”

“fully compliant factory,” or

“ready-to-operate commercial property”

should be preserved where they formed part of the marketing.

The legal significance depends on the transaction as a whole, but such representations may help establish the buyer’s reasonable commercial understanding.

Condominium Rules Can Also Block the Intended Business

Commercial property inside a multi-unit building can present additional problems.

The licensing regulation itself contains conditions connected with properties subject to condominium law, including approval requirements for certain businesses in units registered as residential and certain entertainment businesses in units registered as workplaces.

Therefore, title classification and the management plan should be reviewed before purchase.

Fire-Safety Requirements May Prevent Licensing

The property may have correct zoning and occupancy status but still fail activity-specific fire requirements.

The licensing regulation requires fire-related measures for relevant workplaces and expressly addresses certain higher-risk premises and workplaces with more than thirty employees.

Before blaming the seller, determine whether the problem relates to the property itself or to modifications required for the buyer’s particular operation.

Environmental Requirements Can Also Matter

Industrial or higher-impact activities may require additional environmental measures or permits.

The licensing regulation requires necessary precautions and authorizations concerning industrial, medical and radioactive waste generated by relevant workplaces.

A property may therefore be legally usable for ordinary commercial activity but unsuitable for the foreign buyer’s more intensive operation without additional compliance work.

Distinguish a Property Defect From a Buyer-Specific Regulatory Problem

This distinction can materially affect seller liability.

Suppose the property is legally suitable for ordinary retail use, but the foreign buyer wants to conduct a highly regulated activity requiring specialized modifications.

Failure to obtain that particular licence does not automatically prove that the seller sold a defective commercial property.

The question is what the seller knew, promised and contractually undertook regarding the specific intended use.

What if the Licence Problem Can Be Corrected in 15 Days?

Under the licensing regulation, post-licensing inspections can result in a one-time fifteen-day correction period for certain identified deficiencies, after which the licence may be cancelled and the workplace closed if the deficiencies are not corrected.

However, investors should not assume every fundamental planning or occupancy defect can be cured through this mechanism.

Danıştay has distinguished deficiencies capable of correction from situations involving fundamental planning compliance problems.

Fundamental Planning Defects Can Be More Serious

Danıştay has emphasized that compliance with planning requirements forms part of the licensing assessment. In a recent decision concerning absence of the relevant occupancy status, the Court rejected the view that a fifteen-day correction period necessarily had to be granted where the underlying planning deficiency had not been satisfied.

This distinction is highly important for buyers.

A missing minor document and a fundamentally unlawful structure are not the same problem.

Can the Licence Refusal Be Challenged?

Potentially.

The foreign company should obtain the written refusal and supporting administrative file.

A challenge may be considered where the administration has:

misinterpreted the zoning rules,

relied on incorrect property information,

ignored valid permits,

applied the wrong business classification,

incorrectly assessed the approved use, or

otherwise acted unlawfully.

But litigation should not be used merely to postpone recognition that the intended business is legally prohibited.

Obtain the Written Reason for Refusal

Do not accept only:

“The municipality said no.”

Request the formal administrative position.

The refusal reason determines the strategy.

If the problem is fire safety, the solution may be technical.

If the problem is unauthorized construction, planning compliance may be required.

If the zoning plan prohibits the activity, the issue may be much more fundamental.

Can Suspension of Execution Be Requested?

Depending on the administrative act and statutory conditions, a request for suspension of execution may be considered in administrative litigation.

However, the financial importance of the investment alone does not establish entitlement to relief.

The underlying licensing decision must have a legally challengeable basis.

Administrative and Seller Claims Can Proceed on Different Tracks

The investor does not necessarily have to choose immediately between:

challenging the municipality, and

investigating seller liability.

Both questions may need to be examined simultaneously.

For example, the investor may challenge an arguably unlawful licence refusal while preserving contractual claims against the seller in case the property ultimately cannot be used as represented.

Do Not Miss Private-Law Deadlines While Fighting the Municipality

A lengthy administrative dispute can distract the investor from contractual notification requirements.

Review the purchase agreement immediately for:

claim notices,

warranty periods,

indemnity procedures,

limitation provisions,

arbitration clauses, and

dispute-resolution mechanisms.

Send required notices on time.

Formal Notice to the Seller Can Be Important

Once the problem is identified, the investor should consider whether a formal notice is appropriate.

The notice may need to describe:

the licensing refusal,

the relevant seller representation,

the buyer’s position,

documents requested from the seller, and

reservation of rights.

The exact content should match the chosen legal strategy.

Ask the Seller for Historical Licensing Files

The seller may possess important evidence not found in the buyer’s files.

Request:

earlier licence applications,

municipal correspondence,

technical reports,

fire reports,

occupancy documents,

inspection records, and

previous refusals.

These records can reveal whether the seller knew about the problem before closing.

What if the Seller Offers to “Fix” the Licence?

Evaluate the proposal carefully.

The buyer should determine:

what legal problem exists,

whether it is genuinely correctable,

who will pay,

how long correction will take,

what happens if the attempt fails, and

whether the buyer’s claims are preserved.

Do not waive rights merely because the seller promises to speak with the municipality.

Avoid Informal Assurances After Closing

Statements such as:

“Give us two months and we will solve it”

should not replace a documented legal arrangement.

If additional time is granted, consider documenting:

responsibilities,

deadlines,

cost allocation,

claim preservation, and

consequences of failure.

What if the Buyer Financed the Acquisition?

A licensing failure can affect:

loan covenants,

business projections,

property valuation,

debt service, and

security arrangements.

The financing documents should be reviewed promptly.

Do not make inaccurate representations to lenders about the regulatory status.

Lease Commitments Can Increase Losses

A foreign company may have purchased the property and entered into:

franchise agreements,

supply contracts,

employee commitments,

equipment leases, or

customer agreements.

If the business cannot open, these obligations may generate additional losses.

Document them carefully.

Do Not Continue Investing Until the Legal Position Is Clear

One of the most expensive mistakes is continuing to spend money because management believes:

“We have already invested too much to stop.”

Before committing additional capital, determine whether the property can realistically become lawful for the intended activity.

Alternative Use May Reduce the Loss

The property may still support another lawful commercial activity.

The investor should investigate:

alternative uses,

rental potential,

resale value,

conversion costs, and

market demand.

Mitigation can be important both commercially and in later damages disputes.

Future Transactions Should Include Use-Specific Due Diligence

Before buying commercial property, a foreign investor should verify:

exact zoning,

approved building use,

occupancy status,

construction compliance,

licensing history,

fire requirements,

environmental requirements,

condominium restrictions,

sector-specific permits, and

whether the exact intended activity is permitted.

The question should never be only:

“Can this property be used commercially?”

It should be:

“Can our exact business legally operate from this exact property?”

Consider a Regulatory Condition Precedent

Where business licensing is fundamental to the investment, the acquisition agreement can make closing conditional on specified regulatory requirements.

For example:

written confirmation of permitted use,

satisfactory occupancy documentation,

absence of unauthorized construction,

required licence approval, or

another defined regulatory milestone.

This shifts the risk away from post-closing litigation.

Use Escrow or Retention Where Licensing Risk Remains

If the parties choose to close before the issue is completely resolved, part of the purchase price can potentially be retained or secured by agreement.

This may provide practical protection if the seller’s representations later prove inaccurate.

2026 Practical Legal Strategy

A foreign company that buys commercial property but cannot obtain the required business licence should immediately separate the problem into two legal tracks: administrative licensing and seller liability.

First, obtain the written licence refusal and identify the precise obstacle. Turkish licensing rules prohibit opening and operating a workplace without the required licence, and the applicable regime contains property, activity, safety and regulatory conditions that must be satisfied.

Second, determine whether the obstacle can be corrected. Unauthorized alterations, technical deficiencies or certain documentation problems may have solutions. A fundamental zoning or approved-use incompatibility may be substantially more serious. Official guidance and Danıştay jurisprudence emphasize that licensing authorities must consider whether the premises comply with planning requirements.

Third, reconstruct the transaction. Identify exactly what the seller knew about the buyer’s intended business and what was represented regarding licensing. Particular attention should be given to seller warranties, due-diligence responses, previous licence refusals, municipal correspondence and advertisements.

Fourth, quantify the consequences. The investor should document the difference between the property’s represented and actual value, fit-out expenditure, regulatory correction costs and other directly connected losses. Expected future profits should be analyzed separately from documented expenditure.

Finally, preserve both administrative and contractual deadlines. Challenging the municipality does not automatically preserve claims against the seller, and pursuing the seller does not replace the need to challenge an unlawful administrative decision.

Lawyer Fırat Fesih Kaya can examine the licence refusal, zoning and occupancy status, building-permit history, purchase agreement, seller warranties and pre-contract communications to determine whether the licensing obstacle can be resolved and whether the foreign buyer has claims against the seller.

Frequently Asked Questions

Can a foreign company operate immediately after buying commercial property in Turkey?

Not merely because it owns the property. Where an opening and operating licence is required, the workplace cannot lawfully be opened and operated without the appropriate licence.

Is the seller automatically liable if the buyer cannot obtain a business licence?

No. The reason for refusal, intended use, contractual terms, seller representations, disclosures and buyer-specific regulatory requirements must all be examined.

What if the seller promised that the property was fully suitable for my business?

Preserve the written evidence. A specific representation that the property satisfies licensing requirements can be highly relevant if it proves materially inaccurate.

What if the seller previously received the same licence refusal but did not tell me?

That can materially strengthen the buyer’s position. Obtain the previous administrative file and evidence showing when the seller learned of the restriction.

Can unauthorized construction prevent a business licence?

Potentially, yes. Planning compliance is an important part of licensing, and official guidance based on Danıştay jurisprudence confirms that structures contrary to planning requirements can create licensing obstacles.

Does the previous owner’s business licence automatically transfer to my company?

Not automatically, but where the licensed activity and address remain unchanged, the regulation provides a mechanism for issuing a licence in the new operator’s name based on the existing file following application.

Can I challenge the municipality’s licence refusal?

Potentially. If the authority relied on incorrect facts, misinterpreted the planning position, ignored valid approvals or otherwise acted unlawfully, administrative judicial review may be available.

Can I cancel the property purchase because I cannot obtain the licence?

Potentially, depending on the severity of the restriction, purchase agreement, representations, warranties and applicable private-law rules. The appropriate remedy should be selected only after determining whether the problem is fundamental or correctable.

Can I keep the property and seek compensation from the seller?

Potentially. Depending on the legal basis, a buyer may prefer to retain the property for another lawful use while pursuing qualifying losses associated with inaccurate representations or contractual breaches.

What should I do immediately after my business-licence application is rejected?

Obtain the written refusal, stop further unnecessary fit-out expenditure, verify zoning and approved use, review building and occupancy documentation, investigate previous licensing history, preserve all seller and broker representations, review contractual claim deadlines, determine whether the administrative decision can be challenged and obtain an independent valuation of the property based on its actual lawful use.

Legal Support for Foreign Companies Facing Business Licence Problems After Property Acquisition

A business-licence refusal can undermine the entire purpose of a commercial real estate investment. A foreign company may own valuable property but still be unable to operate because of zoning restrictions, incompatible approved use, occupancy problems, unauthorized construction or other licensing requirements.

Fırat Fesih Kaya Law Office assists foreign companies and investors with commercial-property acquisitions, business-licence refusals, zoning and occupancy disputes, administrative litigation, seller misrepresentation claims and contractual disputes arising from properties that cannot lawfully support the buyer’s intended business. Lawyer Fırat Fesih Kaya can examine the licensing decision, municipal records, purchase agreement, seller warranties and pre-contract representations to determine whether the administrative obstacle can be removed and whether compensation, price reduction or other remedies may be pursued against the seller.

Phone: +90 312 434 22 22

WhatsApp: +90 532 769 22 22

Email: info@firatfesihkaya.av.tr