The Capital Market Board (CMB) has made the first regulation regarding the real estate investment companies to be incorporated to invest in real estates or capital market instruments on real estates in 1975.

The initial regulations have been amended in 1998 with a view to overcome the problems experienced in practice. The rate of Corporation Tax and Income Tax withholding is zero for the Real Estate Investment Companies (REIC) in legal entity status. The tax exemption provided to those who earn profit share from REICs has been lifted by the Law No. 4369 from 01.01.1999 on. The REICs are in the joint stock company status like other corporations whose shares of stock are traded in the Istanbul Stock Exchange. However, they have three significant differences from the other corporations. First, they conduct their business in accordance with the Communiqué on the Real Estate Investment Companies. Second, they have tax exemption. Third, they are obliged to sell 49% of their issued shares of stock to the public. Pursuant to the communiqué of the CMB, the REICs are obliged to apply to the CMB for registration of their shares of stock within 1 year following the completion of incorporation or transformation formalities.


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