This article explains how investors can acquire, build on or lease property in a Turkish organised industrial zone, and the restrictions and risks involved.
Organised industrial zones (OIZs), known in Turkish as organize sanayi bölgeleri, host a large share of Türkiye's manufacturing base. For investors, domestic and foreign alike, an OIZ offers ready infrastructure, utilities, a clustered industrial environment and a faster permitting process than land outside the zones. Acquiring property in an OIZ, however, is not an ordinary real estate purchase. Plots are allocated for a specific purpose, construction and production must be completed within set deadlines, plots cannot be sold before production starts, leasing is subject to the zone's own rules, and dues and utility charges are set by the OIZ's governing bodies. Investors who approach an OIZ transaction as a standard property deal can lose the plot or face a forced buy-back at the original allocation price. This article sets out the rules under Law No. 4562 on Organised Industrial Zones and the OIZ Implementing Regulation from an investor's perspective, with particular attention to the points foreign investors tend to overlook.
1. What an OIZ Is, and What It Is Not
An OIZ is a private-law legal entity established by a founding protocol and registered with the Ministry of Industry and Technology. Within its borders, however, it also exercises public powers: it prepares zoning plans and issues building permits, occupancy permits and workplace operating licences, functions that outside the zones belong to municipalities. It also supplies electricity, water, natural gas and wastewater services to the businesses in the zone and charges for them.
Foreign investors sometimes confuse OIZs with free zones. The two are different regimes. Free zones are treated as outside the Turkish customs territory and offer specific customs and tax advantages. An OIZ is fully within the Turkish customs and tax system. Investments in OIZs may benefit from certain fee and tax exemptions and from more favourable treatment under Türkiye's investment incentive system, but the scope of these benefits changes over time and should be confirmed for each project with tax advisers.
The rules that matter most in practice are often not in the Law or the Regulation but in the decisions of each OIZ's governing body, the founding board or, once enough participants are in production, the general assembly. These bodies set the principles for allocation, sale and leasing, the level of dues and utility charges, and the sanctions for late payment. Two OIZs in the same province can apply noticeably different rules.
2. Routes to Entry
An investor can enter an OIZ in four main ways, each with a different risk profile:
- Allocation of a plot by the OIZ: the investor applies to the OIZ and, if the project fits the zone's sector profile and technical capacity, is allocated a plot. This is the cheapest route in land cost, but it comes with strict construction and production deadlines and a ban on resale until production starts. Separate rules also allow plots to be allocated wholly or partly free of charge to projects meeting investment and employment thresholds, subject to clawback if the commitments are not met.
- Buying an existing facility from a participant: this gives immediate access to a building and, often, existing permits. It is only possible if the facility is already in production and the plot is free of the statutory transfer restriction; otherwise the transfer is prohibited.
- Leasing an existing facility: often the fastest way to start operations, and the most common choice for foreign investors testing the market or nearshoring production. The lease must comply with the OIZ's leasing rules, as explained below.
- Ready-built facilities offered by the OIZ: since a 2024 amendment to the Regulation, OIZs may build infrastructure and buildings on industrial plots they own and lease or sell them. Where available, this offers a turnkey option without construction risk.
3. Foreign Investors: Acquiring Through a Turkish Company
In practice, foreign investors acquire OIZ property through a Turkish subsidiary. Under the Foreign Direct Investment Law No. 4875, a Turkish company with foreign shareholders is treated in the same way as a Turkish-owned company, and it may acquire real estate needed for its activities. Acquisitions of real estate by foreign-owned Turkish companies are, however, subject to a procedure under Article 36 of the Land Registry Law, including a review by the governorship and, in certain locations, security assessments. This should be built into the transaction timetable.
Two practical consequences follow from acquiring through a Turkish company. First, as a Turkish resident, the subsidiary is subject to the ban on agreeing prices and rents for real estate in foreign currency or indexed to foreign currency in contracts with other Turkish residents. Sale and lease prices for OIZ property must therefore be set in Turkish lira, even where the investor's budget is in euros or dollars. We explained this ban and its exceptions in this article. Second, the rules on transfer restrictions apply to the subsidiary as the participant, and changes in its shareholding before production starts may attract scrutiny, as discussed below.
4. Construction and Production Deadlines
Allocation comes with a timetable. Under Article 60 of the OIZ Implementing Regulation, the participant must:
- obtain OIZ approval of its project and a building permit within one year of allocation;
- obtain a workplace opening and operating licence, and thus start production, within two years of the building permit; and
- obtain the required decision under the Environmental Impact Assessment Regulation.
For justified reasons, the OIZ's management board may extend the building permit period by up to one year in total and the operating licence period by up to two years in total. Where construction has started but the licence has still not been obtained, the Ministry may grant a further extension. If the permits are not obtained within these periods, the allocation is cancelled.
Foreign investors planning a phased roll-out should align their internal investment approvals, equipment deliveries and financing with these deadlines from the outset. Extension requests should be filed before the