A Foreign Investor's Guide to Turkey's Real Estate Investment Fund Rules

If you are a foreign investor looking at a Turkish Real Estate Investment Fund (REIF), the rules changed twice in quick succession: the Capital Markets Board reshaped what funds can invest in on 17 July 2024, and a separate tax law passed in August 2024 ended the old "tax-free" reputation REIFs once had. This guide explains both, in plain terms, so you can compare a fund investment against buying property directly and know what you would actually pay.

What a Real Estate Investment Fund Is in Turkey

A Real Estate Investment Fund (REIF, in Turkish Gayrimenkul Yatırım Fonu or GYF) is a collective investment vehicle that pools capital from qualified investors to invest in real estate, real estate projects and real-estate-backed rights. Unlike a publicly traded Real Estate Investment Company (a REIT), a REIF is offered only to qualified investors and is not listed for retail trading.

Each fund is run by a licensed portfolio management company, and its assets are held by a separate custodian. That separation matters: the manager makes the investment decisions, but the assets sit with an independent custodian, so the fund's property is ring-fenced from the manager's own balance sheet.

For a foreigner, a REIF can be an alternative to buying a single property: instead of owning and managing one asset, you hold participation shares in a diversified, professionally managed portfolio. Our Turkish capital markets and fund lawyers can walk you through whether a fund structure fits your goals.

The Two Reforms You Need to Understand

Two separate changes in 2024 reshaped the REIF landscape, and they are easy to confuse because they landed weeks apart:

• The CMB amendment (17 July 2024) changed what REIFs can invest in and how they can be structured. This is a securities-regulation reform, sitting inside Communiqué III-52.3.
• Law No. 7524 (2 August 2024) changed how REIFs are taxed. This is a tax statute, and it removed the unconditional corporate-tax exemption REIFs used to enjoy.

A third development followed in July 2025, when the CMB widened the type of land and buildings a REIF may hold. We cover all three below. If you only read about the 2024 securities reform, you would miss the tax change that most affects your return, so we treat the tax position as its own section.

CMB Reform 1: REIFs Can Now Invest in Residential Projects

Before the July 2024 amendment, REIFs were effectively steered toward commercial and income-producing real estate. The new rules allow a fund to invest in a development project where more than half of the total gross area of the independent sections is reserved for residential use.

To rely on this rule, the residential allocation must be confirmed by an independent real estate appraisal company. That appraisal is the compliance anchor: it documents that the project genuinely qualifies as residential-led, rather than being reclassified after the fact. In practice, this lets funds participate directly in housing development instead of only buying finished commercial assets, which is the central policy aim of the reform.

CMB Reform 2: The New Project REIF Category

The amendment creates a dedicated fund type for residential development: the Project Real Estate Investment Fund (Project REIF). Its key features:

• Name requirement: the fund's name must contain the phrase "project real estate investment fund," so the structure is transparent to investors.
• Narrower portfolio: a Project REIF's portfolio is restricted to land plots, real estate development projects and certain short-term or money-market instruments.
• Carve-out from the standard ratios: in exchange for that narrower mandate, the two main allocation rules for ordinary REIFs do not apply, namely the requirement to hold at least 80% of the portfolio in real estate and the 20% cap on investing in a single joint-stock company.
• Investment methods: a fund may participate through land ownership, revenue-sharing agreements and other contractual structures.

Revenue-sharing arrangements generally require collateral (for example a mortgage or guarantee) or a quality verification. That security requirement lives in Communiqué III-52.3 itself; it reflects the general security principles of the Turkish Code of Obligations (Türk Borçlar Kanunu No. 6098), but the specific rule is in the Communiqué. Agreements concluded with State-affiliated counterparties, such as Ziraat Bankası, the Housing Development Administration (TOKİ), İller Bankası or municipalities, are exempt from that collateral requirement.

CMB Reform 3: Umbrella Funds with Sub-Funds

The reform allows a REIF to be organised as an umbrella fund with multiple sub-funds operating under a single fund bylaw. Participation shares can be issued under that one bylaw, on the condition that a separate issuance document is prepared for each sub-fund. Each sub-fund can run its own investment strategy.

For managers this cuts duplication and administrative cost: rather than establishing a separate fund for each strategy, a single umbrella can host several. For investors it means clearer, strategy-specific products under one supervised structure, so you can pick the sub-fund whose mandate matches your risk appetite.

CMB Reform 4: Mandatory Fund Issuance Agreements

The amendment introduced a requirement for a fund issuance agreement between the REIF and each qualified investor, concluded before participation shares are sold and disclosed on the public disclosure platform. The agreement must contain the regulatory content the CMB prescribes.

This is a contractual safeguard: it pins down the rights and obligations of fund and investor in writing before money changes hands, drawing on general contract principles under the Code of Obligations (TBK No. 6098). Foreign investors should have these agreements reviewed before signing, because they govern subscription terms, redemption rights and disclosure. Our commercial contract lawyers in Istanbul regularly review fund and subscription documents for non-Turkish clients.

The Tax Change That Ended the "Tax-Free" Reputation

This is the part most older guides get wrong. The July 2024 CMB amendment did not touch tax, but a separate statute, Law No. 7524 (Official Gazette dated 2 August 2024, No. 32620), did. For years, REIFs were known as a near tax-free wrapper because of an unconditional corporate-tax exemption on their real-estate income. That era has ended.

A second change matters just as much. From the 2025 tax year, a 10% domestic minimum corporate tax applies, calculated on profit before deductions and exemptions. Importantly, the dividend-distribution exemption cannot push the fund below this 10% floor, so a REIF can still owe corporate tax even after distributing the required dividend. Newly established funds get relief here: an entity in its first three fiscal periods is not subject to the domestic minimum corporate tax.