Share Deal vs Direct Property Purchase in Turkey: Real Estate Risks for Foreign Investors – 2026 Updated Guide

Learn the differences between share deals and direct property purchases in Turkey, including title, tax, tenant, zoning, liability and closing risks for foreign investors.

Foreign investors acquiring real estate in Turkey often have two main transaction options: buying the property directly or acquiring the shares of the company that owns the property.

A direct property purchase may provide clearer ownership of the asset, while a share deal may preserve existing permits, contracts and business operations. However, a share acquisition also transfers the company together with its historic debts, disputes, tax exposure and hidden liabilities.

The right structure depends on the property, the company, the intended use, financing, tax planning, tenant arrangements and the investor’s long-term objectives. This 2026 updated guide explains the principal legal risks of both structures.

What Is a Direct Property Purchase?

In a direct property purchase, the foreign investor acquires the land, building, office, factory, warehouse, hotel, retail unit or other real estate directly from the registered owner.

The ownership is transferred through the official title process, and the buyer becomes the direct owner of the asset.

This structure may be suitable when:

• The investor wants to own only the property;
• The target company has significant hidden liabilities;
• The buyer does not need to acquire the operating business;
• The property can be transferred without major restrictions;
• The buyer wants to separate the real estate from the seller’s company.

However, a direct purchase still requires detailed title, zoning, permit, tenant, environmental and tax due diligence.

What Is a Share Deal?

In a share deal, the foreign investor acquires shares in the company that owns the real estate. The property usually remains registered in the company’s name, but control of the company changes.

The investor may acquire:

• The property;
• Existing leases;
• Permits and operating rights;
• Bank accounts;
• Employees;
• Contracts;
• Equipment;
• Debts;
• Litigation;
• Tax liabilities;
• Environmental obligations;
• Historic corporate risks.

A share deal may be commercially efficient, but it does not provide a clean separation from the company’s past.

Direct Property Purchase: Main Advantages

A direct purchase may provide the investor with greater control over the specific asset.

Potential advantages include:

• Direct ownership of the property;
• Easier separation from the seller’s historic corporate debts;
• Ability to exclude unrelated business assets;
• Clearer control over future sale or development;
• More straightforward asset-level financing;
• Reduced exposure to unrelated company litigation.

The buyer may also avoid acquiring unwanted employees, supplier agreements, customer disputes and corporate obligations.

These advantages depend on the purchase agreement and the proper investigation of property-related liabilities.

Direct Property Purchase: Main Risks

Title and Ownership Risks

The buyer must verify that the seller owns the exact property being sold and has authority to transfer it.

The review should cover:

• Ownership history;
• Mortgages;
• Attachments;
• Easements;
• Co-ownership;
• Inheritance claims;
• Lease annotations;
• Sale promises;
• Public restrictions;
• Development rights.

Zoning and Permit Risks

The buyer should confirm that the actual use of the property matches its zoning and approved permits.

A building may be physically used as a factory, warehouse, office or hotel but lack the approvals required for that use.

Tenant Risks

If the property is rented, the buyer may acquire the property subject to existing leases. The sale does not automatically guarantee vacant possession.

The buyer should review rent, renewal rights, deposits, arrears, subleases, termination clauses and tenant disputes.

Environmental and Structural Risks

Environmental contamination, unauthorized construction, structural defects and fire-safety problems may continue to affect the property after purchase.

The purchase agreement should include specific warranties and indemnities for these risks.

Share Deal: Main Advantages

A share deal may be useful when the company already operates the property and holds important permits, contracts or commercial relationships.

Potential advantages include:

• Continuity of business operations;
• Preservation of existing leases;
• Continuation of supplier and service contracts;
• Retention of employees and operating systems;
• Avoidance of immediate disruption;
• Possible preservation of permits and licenses;
• No need to transfer every operating asset separately.

A share deal may also be useful where the property is part of a larger business, such as a hotel, factory, logistics operation or office portfolio.

However, these advantages should be balanced against the company’s historic liabilities.

Share Deal: Main Risks

Hidden Company Debts

The buyer may inherit undisclosed:

• Bank loans;
• Tax debts;
• Employee claims;
• Supplier debts;
• Customer claims;
• Enforcement files;
• Shareholder disputes;
• Guarantees;
• Related-party obligations.

A property valuation cannot reveal all company liabilities.

Historic Property Violations

The company may have acquired or developed the property without complete permits. It may also have carried out unauthorized construction or used the property contrary to zoning rules.

These problems remain connected to the company after the share purchase.

Environmental Liability

Historic contamination may create serious costs for investigation, cleanup, monitoring and remediation. A share buyer may discover these liabilities only after closing.

Environmental warranties should be specific, detailed and supported by independent reports.

Existing Litigation

The company may be involved in lawsuits concerning ownership, tenants, contractors, construction defects, access, neighboring properties or public restrictions.

The buyer should obtain a complete litigation and enforcement report.

Corporate Authority and Related-Party Risks

The sale of shares may be challenged if the seller lacks authority, if approvals are missing or if the transaction involves undisclosed conflicts of interest.

The buyer should verify shareholder ownership, transfer restrictions, pledges, pre-emption rights and corporate approvals.

Title Transfer and Transaction Costs

A direct property purchase normally involves a title-transfer process and related transaction costs. A share deal may avoid an immediate transfer of registered ownership, but this does not automatically eliminate tax, accounting, regulatory or corporate expenses.

The parties should obtain independent advice regarding:

• Property transfer taxes;
• Corporate tax;
• Value-added tax;
• Capital gains;
• Stamp duties;
• Withholding;
• Accounting treatment;
• Financing costs;
• Valuation requirements;
• Transaction structuring.

The most tax-efficient structure may not be the safest structure from a liability perspective.

Foreign Ownership Eligibility

Foreign investors should confirm that the proposed buyer can legally acquire the property or shares under the applicable rules.

The review may involve:

• Buyer nationality;
• Corporate ownership structure;
• Land type;
• Location;
• Security restrictions;
• Intended activity;
• Maximum holding limitations;
• Registration requirements.

The buyer should complete this review before paying a non-refundable deposit.

Financing and Lender Consent

Both structures may require lender consent.

For a direct property purchase, the buyer should check existing mortgages and the release process.

For a share deal, the company’s loan agreements may contain:

• Change-of-control restrictions;
• Mandatory repayment clauses;
• Asset-sale limitations;
• Additional security requirements;
• Financial covenants;
• Lender approval conditions.

Failure to obtain consent may trigger acceleration of company debt.

Due Diligence Required for Both Structures

Regardless of the chosen structure, the foreign investor should review:

• Title and ownership records;
• Zoning and development rights;
• Construction and occupancy permits;
• Environmental conditions;
• Structural safety;
• Fire and earthquake risks;
• Leases and tenant claims;
• Utility and service debts;
• Property taxes;
• Insurance policies;
• Litigation and enforcement;
• Public projects and expropriation;
• Access and easements;
• Property management contracts;
• Valuation and marketability.

In a share deal, this property review must be combined with complete corporate due diligence.

Contractual Protection for the Buyer

A share purchase agreement or property purchase agreement should include:

• Detailed seller representations;
• Disclosure schedules;
• Title warranties;
• Permit warranties;
• Environmental warranties;
• Tenant warranties;
• Tax indemnities;
• Litigation indemnities;
• Escrow or retention;
• Liability caps;
• Survival periods;
• Closing conditions;
• Termination rights;
• Post-closing assistance;
• Dispute-resolution provisions.

General statements such as “the company has no known liabilities” may not sufficiently protect the buyer.

When Is a Direct Property Purchase Usually Preferable?

A direct purchase may be preferable when:

• The investor wants only the property;
• The seller’s company has significant unrelated liabilities;
• The target company has unresolved tax or employee disputes;
• The property can be transferred without major restrictions;
• Existing permits do not need to remain with the company;
• The buyer wants a clean asset-level investment.

When Is a Share Deal Usually Preferable?

A share deal may be considered when:

• The property is essential to an operating business;
• Permits and contracts are held by the company;
• The business has valuable tenant relationships;
• Direct transfer would disrupt operations;
• The company has strong financial records;
• The seller can provide meaningful warranties and security;
• The buyer has completed full corporate and property due diligence.

A share deal should not be selected merely because it appears faster or cheaper.

2026 Practical Decision Checklist

Before choosing the transaction structure, the foreign investor should:

1. Identify the real estate and business objectives;
2. Compare direct ownership with corporate ownership;
3. Review title and property restrictions;
4. Analyze the company’s historic liabilities;
5. Check leases, tenants and rent collection;
6. Investigate zoning and permits;
7. Conduct environmental and technical inspections;
8. Review financing and lender consent;
9. Confirm foreign ownership eligibility;
10. Obtain tax and accounting advice;
11. Negotiate warranties and indemnities;
12. Use escrow or retention where appropriate;
13. Make closing conditional upon resolving critical risks.

Lawyer Fırat Fesih Kaya can assist foreign investors with transaction structuring, property due diligence, share purchase agreements, title review, lease analysis and closing protection.

Conclusion

The choice between a share deal and a direct property purchase can significantly affect a foreign investor’s legal and financial exposure in Turkey.

A direct purchase may provide clearer asset ownership but still carries title, zoning, permit, tenant and environmental risks. A share deal may preserve business continuity but also transfers the company’s historic liabilities.

The safest structure is the one supported by complete due diligence, accurate valuation, strong warranties, effective indemnities and carefully managed closing conditions.

Frequently Asked Questions (FAQ)

1. What is the difference between a share deal and a direct property purchase?

In a share deal, the investor acquires the company that owns the property. In a direct purchase, the investor acquires the property itself.

2. Which structure is safer for a foreign investor?

Neither structure is automatically safer. The appropriate choice depends on title, company liabilities, permits, taxes, tenants, financing and business objectives.

3. Does a share buyer inherit the company’s debts?

The company generally remains responsible for its debts, but the buyer acquires control of that company and therefore assumes the economic risk of its historic liabilities.

4. Can a direct property buyer avoid all seller liabilities?

A direct purchase may exclude unrelated company liabilities, but property-related tax, environmental, title, tenant and permit risks may still affect the buyer.

5. Is title transfer required in a share deal?

Usually, the property remains registered in the company’s name, so there may be no immediate change in registered ownership. Corporate ownership and control still change.

6. Which transaction has lower tax costs?

The answer depends on the property, company, price, structure, financing and applicable tax rules. Professional tax advice is necessary before signing.

7. What happens to tenants after a direct property purchase?

Existing leases may continue, and the buyer may become the new landlord. The buyer should review all rent, renewal, deposit and termination rights.

8. Can a share deal preserve existing permits?

Permits may remain with the company, but their validity, transferability, change-of-control effects and compliance status must be checked.

9. What contractual protection should a foreign buyer request?

The buyer should request detailed title, tax, permit, environmental, tenant and litigation warranties, together with indemnities, escrow or retention arrangements.

10. Should a foreign investor use a lawyer for this transaction?

Yes. The transaction involves corporate, property, tax, zoning, lease, environmental and enforcement risks that require coordinated legal due diligence.

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

Foreign investors need careful structuring before choosing between a share deal and a direct property purchase. Fırat Fesih Kaya Law Office provides legal assistance with real estate acquisitions, share purchase agreements, title due diligence, zoning and permit review, tenant risks, corporate liabilities and closing protection throughout Turkey and abroad.

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