A construction company as a contractor is liable for planning, leading, executing, supervising and inspecting a construction project thus building homes and commercial buildings for a landowner, making sure it is structurally sound and comply with the architectural project which is in accordance with the relevant development plan. With this Article we will try to provide to our readers information regarding setting up a construction business in Turkey, documents required to start a construction project and administrative approvals and licenses necessary to be obtained to execute a construction project.
MESCI LAW FIRM, having its’ head office in Istanbul, Turkey, formed by reputable construction lawyers registered before the Istanbul Bar Association provides legal consultancy and law services for over ten years regarding construction law, setting up a construction business, starting a construction project and open a construction company in Turkey.
How To Set Up A Construction Business In Turkey
Our lawyers in Istanbul are well experienced on filing opposition before the administration against refusal of construction permit applications and residential usage licenses and afterwards, on filing actions of annulment related to the mentioned administrative decisions. Our lawyers are well experienced on applying for suspension of execution of demolition decision, making an opposition before the relevant administration regarding demolition decision before filing suit of nullity and filing an action for annulment against demolition decision of the relevant administration. In addition, you can contact our law firm in Turkey and obtain detailed information on licenses and approvals to be obtain in order to start a construction business and issuance of protocols such as construction right in return for flat protocols.
Requirements To Set Up A Construction Company In Turkey
We recommend our client candidates to establish a construction company in the form of a limited liability company or a joint stock company in order to avoid tax problems and also to benefit from systems that will reduce costs such as administrative grants and incentives. Following completion of the required documents stated by the Istanbul Chamber of Commerce, Turkish Commercial Code and Trade Registry Statute, limited liability company or a Joint Stock Company can be established in Istanbul in a very short period of time.
We suggest you to take a look at the Article we published, “Commercial and Corporation Law”, about limited liability company establishment in Turkey and joint stock company establishment in Turkey where we have also explained detailly formation procedures. After establishing your construction company in Turkey, you will be entitled to participate in biddings with the framework of urban transformation. On the other hand, in order to expand your construction company, you will need to decide whether to buy a land and construct on it OR to construct on an existing building in exchange for flat; to determine your field of activity, the area where you will expand your brand; to create your business plan and to make an efficient cost calculation.
Licenses and Permits For Companies in the Construction Sector in Turkey
In order to start any construction project, a Turkish construction company shall obtain several licenses and approvals from relevant administrative entities and prepare required documents for applications required.
Structures subject to construction permit shall be built by a real person or legal entity building contractor or by the union more than one contractor will form and each building contractor shall obtain a structure number (which is also called as YAMBİS number). This structure number must be used in the construction permit, occupancy permit and contract of construction work. The application procedure for obtaining the construction authorization certificate is regulated under the Statute on Classification and Recording of Building Contractors published in the 30702 numbered Official Gazette on 02.03.2019. To engage in construction projects, contractors must obtain an construction authorization certificate from the Ministry of Environment and Urbanisation.
Building contractor is obliged to build the structure with its’ installation and materials fully in accordance with the relevant regulations, implementation development plant, construction permit, etudes and projects attached to the construction permit, standards and technical specifications and to eliminate the contrariety to the legislation caused by itself. The building contractor cannot continue the construction works related to the construction and it’s installations without the supervision of the relevant technical responsible, and cannot employ a worker who does not have a certificate of authority for construction and installation works.
A zoning status document showing the appropriate construction conditions for a parcel of the zoning plan, must be obtained from the relevant administration which is entitled to issue the construction permit. In this document, elements such as whether the parcel is within the scope of the zoning plan, building depth, building height, number of floors, front and back garden distances, building facade, roof slope are shown regarding the building that can be built on the parcel whose structuring features are specified.
The zoning status can be learned online through electronical construction (e-imar) part within the electronical municipality (e-belediye) system of the district to which the land is bound. If zoning status cannot be found like that, it is necessary to apply to the municipality where the immovable is registered with the required documents. If a Power of Attorney is provided, the document showing the zoning status can be obtained by the contractor itself.
As per Article 21 of the 3194 numbered Zoning Law, it is obligatory to obtain a building permit (construction permit) from municipalities or governorships for all buildings falling within the scope of the aforementioned law, except for the exception specified in Article 26 of the same Law. The application is made with many documents such as zoning status certificate to be obtained from the municipality, application sketch approved by LİHKAB, geotechnical report, ground survey report, building inspection permit, construction contract in return for land share, contractor tax plate, architectural project, thermal insulation project, reinforced concrete static project. Unless otherwise is agreed within the contract, landlord is obliged to obtain the building permit. Unless this obligation is fulfilled, it is incompatible with public order to ask the contractor to start the construction.
Although there is a clear rule in the contract that the building permit will be taken by the contractor, if the landlord has transferred this obligation to the contractor with a notarized Power of Attorney, the obligation to obtain the building permit passes to the contractor as per Supreme Court decisions. Structures constructed without obtaining a license or in violation of the license may be demolished as per Article 32 of the 3194 numbered Zoning Law.
The building occupancy permit, also called as İSKAN, is defined in the 3 July 2017 dated and 30113 numbered Planned Areas Zoning Regulation as a document proving that the building is constructed has been finalized in accordance with the projects attached to the building permit, is constructed in accordance with the form in ANNEX-9 of mentioned regulation and complies with relevant standards and enables one to use the building. Following completion of the construction, a building occupancy permit must be obtained by applying to the administration with required documents such as title deed copy, building (architectural) project, zoning status, foundation license, heat isolation license telekom compliance letter, building inspection surveyor certificate, facade photos of the building, shelter report, license to use elevator, fire safety equipment report.
What Are The Main Regulations Regarding Construction Business in Turkey?
- 3194 numbered Zoning Law
- 4708 numbered Building Inspection Law
- 2872 numbered Environmental Law
How To Obtain Construction Permits In Turkey
A construction (building) permit can be defined as a permit given by the municipalities to enable start of the construction of any building that is subject to a building permit within the adjacent areas, and by the governorates (Environment and Urban Planning Directorates) outside the boundaries of the adjacent area. Land owners or building owners must not start construction before obtaining a building permit.
The building permit is given to the applicant upon application made to the relevant municipality to which immovable is bound with documents required such as zoning status document, boundary survey, construction agreement in return for land share, letter of commitment of the contractor, tax plate of the contractor, certificate of authority of the contractor, the architectural plan certified by the chamber of architects, static project, soil investigation report, reinforced concrete plan approved by the chamber of architects, etc.
It is not possible to start the excavation process, which is the first stage of the construction, without obtaining the building permit. If there is no deficiency in the documents, the construction permit is issued within an average of 1 month following the application. Pursuant to Article 29 of the 3194 numbered Zoning Law, the construction start period is 2 years from the date of obtaining the construction permit. If the construction is not commenced within this period or the construction is commenced however is not completed within five years including the start date, for whatever reason, the construction permit shall be deemed invalid.
It is possible to explain the process of obtaining a construction permit with the following stages:
- Obtaining zoning status certificate.
- Boundary survey approved by LİHKAB.
- Identification and starting out the independent auditor.
- Application for building (construction) permit.
- Registration with the Social Security Institution before starting the construction.
- Receiving the “no tax debt” letter from the tax office and receiving the 1no premium debt” letter from the Social Security Institution.
- Application for obtaining building occupancy permit.
- Type classification will be allocated from the title deed.
- Workplace opening and operation permit application shall be made if the building is intended to be used as a workplace.
- An application shall be made in order for building of the wastewater connection point.
It shall not be forgotten that the building permit cannot be cancelled unless all the land owners apply, for the constructions that continue in accordance with the contract and the legislation.
Company Registration In The Construction Industry In Turkey
The Turkish Statistical Institute (TÜİK) stated that the Gross Domestic Product has increased by 5,6% in 2022. When examining the findings regarding the activities that make up the Gross Domestic Product, it is seen that the Turkish Statistical Institute draws attention to the fact that the financial and insurance activities are increased by 21,8% in 2022, while a decrease of 8,4% occur in the construction sector. The construction sector has grown on an annual basis for the last time in 2017. In this respect we can say that the construction industry has shrunk in the last five years.
This shrinkage in the construction sector is of course due to the pandemic, the rapid increase in housing prices, the decrease in the production of housing land in recent years, the fact that the housing supply has remained below the demand and the rapid increase in the price of construction materials. On the other hand, the destruction of almost all of the provinces such as Hatay, Kahramanmaras and Malatya together as disaster zones, with the recent Kahramanmaras based earthquakes will have an effect of enlarging the construction sector and gross domestic product in 2023 and the following years.
Ferdi Erdogan, Chairman of the Board of Directors of İMSAD, through a statement he made on the 18th anniversary of the 17 August 1999 dated Marmara Earthquake, drew attention that there are more than 7 million risky buildings in Turkey, instead of voicing the disaster scenarios after the earthquake to be occur, solving the structural problems and supporting the urban transformation process will enable Turkey to attain safe structures. It is true that we already started to witness that many Turkish citizen, who are afraid of the devastating effects of the expected Istanbul earthquake, started to interrogate whether if the property they are using or reside in is earthquake resistant or not and within this scope make applications for earthquake resistance tests. We can also say that regarding the buildings that are determined to be dangerous to reside in, applications for urban transformation have increased recently. In order to support and help disaster zones of Turkey build safe and better-quality infrastructure, you can invest in Turkey and set up a construction business in Turkey.