Foreigners who intend to extend their stay in Türkiye beyond the time limit specified in their visa, those who require a visa exemption or intend to stay for more than ninety days (90) must obtain a residence permit.

1. Short-Term Residence Permit for Foreigners

For short-term residence permits, foreigners who own real estate in Türkiye or intend to establish a business or make business connections in Türkiye must submit the following documents to the relevant Provincial Directorate of Migration Management (İl Göç İdaresi Müdürlüğü) once an application is submitted through the e-residence system. (e-ikamet.goc.gov.tr)

Short-term residence permits are issued for a maximum of two years (2) as a principle. However, foreigners who intend to invest in Türkiye in amounts and scopes attested by the Council of Ministers, along with their spouse and children, may be granted a five-year short-term residence permit. Furthermore, these investors may apply for acquisition of Turkish citizenship or a long-term residence permit.

• Initial Application

According to Turkish legislation, to initiate the initial application for residency Permit, Natural Person Foreigners shall prepare and submit the following documents to the related Immigration Authority:

• Residence permit application form
• Copy of passport or equivalent travel document
• Four biometric photographs
• Proof of financial sufficiency and regular means of subsistence for the duration of the stay
• Documents/receipts for the payment of residence permit fee and card fee
• Title deed proving the applicant’s ownership (required for foreigners who own immovable property in Turkey)​
• Valid health insurance

Legal Person Foreigners who intend to apply for a short residence permit by establishing a business or making business connections in Turkey shall submit the following additional documents:

• Letter of invitation from the person or company(ies) to be contacted
• Notarized company activity certificate Notarized tax registration certificate
• Notarized trade registry gazette
• Notarized signature circular

Foreigners who intend to apply for a short residence permit by investing in amounts and scopes attested by the Council of Ministers must meet any of the following criteria:

• Making a minimum fixed capital investment of USD 500,000 or equivalent foreign currency, as attested by the Ministry of Industry and Technology
• Acquiring a property worth a minimum of USD 400,000 or equivalent foreign currency with a title deed restriction on its resale for at least three years, as attested by the Ministry of Environment, Urbanization and Climate Change
• Creating jobs for at least 50 people, as attested by the Ministry of Labor and Social Security
• Depositing a minimum of USD 500,000 or equivalent foreign currency in banks operating in Türkiye with the condition that it is not withdrawn for at least three years, as attested by the Banking Regulation and Supervision Agency
• Buying government bonds worth a minimum of USD 500,000 or equivalent foreign currency with the condition that they are not sold for at least three years, as attested by the Ministry of Treasury and Finance
• Buying real estate investment fund shares or venture capital investment fund shares worth a minimum of USD 500,000 or equivalent foreign currency with the condition that they are not sold for at least three years, as attested by the Capital Markets Board of Türkiye
• Depositing a minimum contribution of USD 500,000 or equivalent foreign currency in funds determined by the Insurance and Private Pension Regulation and Supervision Agency with the condition that it remains in the private pension system for at least three years, as attested by the Insurance and Private Pension Regulation and Supervision Agency.

• Application for Extension

For obtaining extensions, foreigners shall submit the following documents to the relevant Provincial Directorate of Migration Management (İl Göç İdaresi Müdürlüğü) by mail within five business days once an application is submitted through the e-residence system. (e-ikamet.goc.gov.tr). Applications for extension of the residence permit may be made sixty days prior to its expiration, but under no circumstances shall this be done after the expiry date.

• Residence permit application form

• Notarized copy of passport or equivalent travel document

• Four biometric photographs

• Submission of the previous residence permit document

• Proof of financial sufficiency and regular means of subsistence for the duration of the stay

• Title deed proving the applicant’s ownership (required for foreigners who own immovable property in Turkey)

• Letter of invitation from the person or company(ies) to be contacted (required for foreigners who intend to establish business or make business connections in Turkey)

• Valid medical insurance

2. Long-Term Residence Permit for Foreigners

 For long-term residence permits, foreigners who have continuously resided in Türkiye for at least eight years must submit the following documents to the relevant Provincial Directorate of Migration Management (İl Göç İdaresi Müdürlüğü). Long-term residence permits are issued indefinitely; therefore, no extension application is required.

• Application

Natural Person Foreigners shall prepare and submit the following documents to the related Immigration Authority:

• Residence permit application form

• Original and copy of passport or equivalent travel document

• Copy of the previous residence permit document

• Four biometric photographs

• Proof that the applicant has not received any social aid from governmental institutions and organizations in the last three years

• Proof of financial sufficiency and regular means of subsistence for the duration of the stay

• Police record document
• Valid medical insurance

Author:
Atty. Mustafa Kemal Balta, LL.M.
Managing Partner

The volume of aircraft financing in Turkey has recently increased due to the reduction of costs in general and securities as well as the stable economic atmosphere in Turkey.

It is not necessary for individuals and legal entities willing to purchase an aircraft to have the total cash in order to purchase the aircraft outright. Even though they have the cash available, tax or cash flow implications may dictate against paying in cash for the aircraft. Thus, these individuals and businesses may purchase their aircraft using financing provided by a third-party.

Aircraft financing includes many players such as financial institutions and lenders that will finance the aircraft for the ones interested to purchase these aircrafts. However, it is a fact that only a limited number of these lenders and financial institutions are experienced with aircraft financing. Therefore, except those, other lenders and financial institutions may not be able to process aircraft financing transactions as efficiently or economically as lenders and financial institutions with more aircraft finance experience.

Thanks to the adoption of the Convention on International Interests in Mobile
Equipment (the “Convention”) and the Protocol to the Convention on Matters Specific to
Aircraft Equipment (the “Protocol” and, together with the Convention, the “Cape Town
Convention”) by 2013, the Republic of Turkey has become a country which is very fit for aircraft finance in all aspects.

It is known that third parties providing the necessary finance of the purchase of aircrafts are
preferred by the buyers. There are many financial institutions and lenders in the aircraft
finance market that may finance the purchasing of aircrafts as the third parties.

Aircraft leasing should be considered as one of the main means of aircraft finance.
Moreover, it should be noted that aircraft finance is very common and popular in Turkey. This is because of their nature and the option to buy at the end of the termination of the term.

Although the processes and procedures involved in an aircraft finance transaction are similar to other finance transactions, an aircraft finance transaction involves many nuances and unique aspects. Having a general understanding of the nuances associated with an aircraft finance transaction can assist a borrower in successfully closing an aircraft finance transaction.

Direct Lending

Real and legal persons interested in financing the purchase of an aircraft should find a
lender who can satisfy his/her needs and aims.

Procedures of financing certainly gets more complicated once the features of the aircraft and the financed amount increases.

To assess the whole transaction, the lender, requires information regarding the aircraft including the model, year, registration and proposed purchase price submitted by the borrower.

The lender would require financial information, a bunch of corporate documents from the borrower
such as articles of association and resolutions regarding the approval and authorization of
the transaction.

It is quite likely that the lender would require an appraisal of the aircraft in order to
ensure that the value of the aircraft is consistent with the lender’s expectations for the
particular transaction.

The lender will further carry out a title search on the aircraft to detect the current owner and whether any security interests, liens or other encumbrances are registered
against the aircraft before the civil aviation authority where the aircraft is registered.

Should any liens, encumbrances or other title defects are revealed upon this research, then the
lender would require that any obstacles to be released or otherwise resolved prior to the
closing of the transaction. Researches on the judgments regarding the aircrafts will also be
performed to ensure that clear title of the aircraft gets transferred to the borrower.

The lenders have security interests over the financed aircrafts, for insuring their rightful
interests; it is common for the lenders to purchase the title insurance of the aircrafts. By doing so,
accurateness of the registration documentation and that the transaction and security
documents’ being filed in a timely manner will be ensured by the aircraft title insurer.

In case of any title issues arising after the transaction closes, the title insurer will be responsible for securing the lender’s interest in the aircraft and resolving any title defects covered in the insurance.

The loan documents typically associated with a basic aircraft finance transaction include
a loan agreement, aircraft security agreements, guaranty and authorization documents.

The Loan Agreement contains the terms and conditions of the loan and the borrower’s promise
to repayment of the loan pursuant to those terms and conditions. The Loan Agreement also
provides the lender with remedies if the borrower does not perform its obligations under
such agreement.

The aircraft security agreement or mortgage agreement pledges the aircraft as security
for the loan agreement. In the event that the borrower fails to repay the loan, the lender
will have the right to collect the debt through aircraft under the possible means applicable under Turkish Law.

In the financing transactions in which the loan is being guaranteed by a third party,
the relevant real or legal person third party would need to execute a guaranty that obligates the
guarantor to repay the loan in the event that the borrower defaults.

The lender will require that the appropriate parties execute the loan documentation and
also other transaction documentations such as a mortgage agreement pursuant to their
terms and conditions.

The mortgage agreements shall be duly registered to the Civil Aviation Registry under
Turkish Laws in order to protect the property rights against third-party claims, together with
the aircraft itself or after the registration of the aircraft to the Turkish Civil Aviation
Registry.

It should also be noted that related loan agreements are enjoying tax advantages in
Turkey. Only the mortgage agreement is subject to stamp tax under the laws of Turkey.
Thus, Turkish aviation practice enjoys a lot of that as well.

On the other hand, the Turkish Party of the transactions should also be careful about the Special Tax called as Resource Utilization Support Fund (KKDF). The maturity of the loans shall be a factor for the assessment of this particular tax.

Financial Leasing

Financial leasing is the most used type of aircraft finance in Turkey mostly because of various tax advantages.

Financial leasing transactions are governed by the Financial Leasing Code numbered
3226 (“the Code”).

The lessor should be a financial leasing institution duly established either in Turkey or abroad. Upon the lessee’s choice and request, the lessor purchases or provides the Leased
Property described in details under the Financial Leasing Agreement (“Agreement”) from
a third party and transfers solely its possession to the lessee. The lessor does not cease
being the owner of the Leased Property during the Agreement’s term.

However, the lessee may be granted with the option to acquire the ownership of the Leased Property upon termination of the Agreement with a purchase price agreed therein.

The lessee’s main obligation is to pay the agreed lease amount to the lessor under the Agreement.

As a formal requirement, financial leasing agreements are required to be in writing and executed before a notary public in the Republic of Turkey.

The Code does not set forth any specific registration procedure for aircrafts. However, if the lessor is a foreign entity which does not have any branch in Turkey, the financial leasing agreement is required to be registered by the Banking Regulation and Supervision Agency (“BRSA”)

The financial lease agreements whose subject matter is the leasing of the aircrafts are also required to be registered with the Aviation Registry pursuant to Civil Aviation Code numbered 2920.

Protecting the lessor against any third party claim with respect to the leased aircrafts is the main function and aim of these registrations.

Author:
Atty. Mustafa Kemal Balta, LL.M.
Managing Partner

In recent years, scientists have focused on renewable and alternative energy sources, like solar and wind energies, due to energy prices and environmental problems of fossil fuel consumption. It is well known that solar energy is the source of life on earth. The solar energy affects positively all living organisms and the planning and design of building heating and cooling systems. Turkey has a very high solar energy potential since its location is exposed with a very high solar radiation.

Especially, the amount, direction and variation of radiation are very important for heating and cooling systems for the necessary calculations of heat gain from solar energy. The solar energy potential is also necessary to estimate maximum solar energy loads on walls, windows and roofs.

The solar industry is undergoing a critical transition. The rules of the game are changing, and many current players could face significant challenges as the industry restructures. But those who believe the solar industry has run its course may be surprised. Solar companies that reduce their costs, develop value propositions to target the needs of particular segments, and strategically navigate the evolving regulatory landscape can position themselves to reap significant rewards in the coming years.

According to International Energy Agency (“IEA”) analysis, under extreme assumptions solar energy could provide up to one-third of the world’s final energy demand after 2060. A number of assumptions are made to see what might be possible in terms of solar deployment, while keeping affordability in sight. These include policy makers successfully reducing greenhouse gas emissions beyond the current international targets, and electricity-driven technologies fostering significant energy efficiency improvements and displacing fossil fuels in many uses in buildings, industry and transportation.

Over the past three years, Solar Photovoltaic (“PV”) installed system prices, module prices, and module production costs have all fallen by more than 50% and as a result of these falling prices, manufacturing consolidation and a more balanced supply-demand picture, PV demand will continue to grow and the solar industry will shift from a demand-constrained market into a classic supply-driven market in 2014. Therefore, the PV industry is once more at a pivotal stage. There are strong indicators suggesting that the industry will reach new heights in 2014, but there is also significant risk, possibly coming more from industry participants themselves than from end-market factors. In this regard, the leading PV market research firms are predicting a good year in 2014.

The subsidies that made solar PV economically attractive for many consumers set the conditions for the boom. Demand rose, new entrants flocked to the industry, and the innovation has been accelerated. Manufacturing capacity increased dramatically (particularly after large-scale, low-cost Chinese manufacturers entered the market) and the market became oversupplied. Prices dropped suddenly, which increased demand but put pressure on margins.

Solar Energy Power in Turkey

Turkey’s importance in the energy markets is growing, both as a regional energy transit hub and as a growing consumer. Turkey’s energy demand has increased rapidly over the last few years and likely will continue to grow in the future.

The country’s energy use is still relatively low, although it is increasing at a very fast pace. According to IEA, energy use in Turkey is expected to double over the next decade, while electricity demand growth is expected to increase at an even faster pace. Meeting this level of growth will require significant investment in the energy sector, much of which will come from the private sector. Large investments in natural gas and electricity infrastructure will be essential.

Turkey is located in a relatively advantageous geographical position. The solar energy potential evaluations, based on the data measured by the State Meteorological Services revealed that the annual average total insolation duration as 2640 hours (7,2 hours/day) and the average annual solar radiation as 1311 kWh/m²-year (3,6 kWh/m²-day). 

However, it is known that the existing meteorological data is lower than the actual solar energy data of Turkey. Although the measurements have not been completed yet, the collected data indicates that the actual solar energy radiation values are 20-25% higher than the existing data.

Utilization of photovoltaic systems is limited with the usage of some governmental organizations in remote service areas such as telecom stations, forest fire observation towers and highway emergency. In June 2013, the first tender was announced, creating the long awaited start of the Turkish market. With the opening of the tender for 600 MW there were projects submitted for 9 GW by 409 companies.

The commercial segment (up to 1 MW) seems to be the most interesting issue for the interested persons. There is no license requirement for systems up to 1 MW which makes this segment attractive and relatively easy for developing PV projects.

Author:
Atty. Mustafa Kemal Balta, LL.M.
Managing Partner