The Implementation Regulation of Organized Industrial Zones Has Been Amended

The Regulation Amending the Implementation Regulation of Organized Industrial Zones dated 02/02/2019 ("Regulation") was published in the Official Gazette dated 05/09/2024 and numbered 32653, and has entered into force.

Under the Regulation, significant changes have been made in various matters such as the establishment, management, allocation of plots to participants, leasing, and cancellation of allocated plots in Organized Industrial Zones ("OIZ").

1. Amendments to the OIZ Site Selecting Procedure

In relation to the initial application and site selection for OIZ, a provision has been added stating that, in areas designated as industrial zones in the current 1/5000 and 1/1000 scale zoning plans, the area can be designated as an OIZ by the Ministry of Industry and Technology ("Ministry") without carrying out the OIZ site selection process, provided that the opinion of the authority that approved the plan is obtained and geological and geotechnical studies required for the zoning plan are conducted. without the need for further procedural requirements. Therefore, sites already designated as industrial zones may be directly recognized as OIZ at the discretion of the Ministry.

2. Amendments Regarding Expropriation and Acquisition of Public Lands

In cases where the areas selected for OIZ involve privately owned land, these lands can be acquired through sale or expropriation. Additionally, a provision has been introduced that grants parcel owners the right to become participants by being allocated a plot in the selected area by the OIZ before expropriation is carried out.

For areas which boundaries have been definitely designated as OIZ, a provision has been introduced stating that if an urgent expropriation decision is made, the price of the immovable property determined by the court must be deposited into a bank account. Moreover, after the zoning plan is finalized, the OIZ can begin infrastructure construction and proceed with allocations.

3. Amendments Regarding the OIZ Meetings

A provision has been introduced stipulating that if the conditions for convening the general assembly of the OIZ are met but the call notice for an assembly is not issued by the Entrepreneurial Committee, or if, as a result of an inspection by the Ministry, it is deemed necessary for the general assembly to convene, the Ministry shall make the call ex officio.

It is also stipulated that if the affairs of the OIZ indicate, through law, regulation, establishment protocol, and articles of association, that an extraordinary general assembly should be convened, but the Entrepreneurial Committee fails to make an application for an extraordinary general assembly in a timely manner, the applicants may apply to the Ministry to call the general assembly ex officio, along with their justifications. In such a case, the Ministry will set the agenda and call the general assembly to convene ex officio within two months from the date of application.

For OIZ that have the right to hold a general assembly, it is stipulated that only participants who have obtained a construction use permit, or their authorized representatives (on behalf of legal entities), may attend the general assembly. Attendance by proxy is not permitted.

4. Regulations Introduced by the Preliminary Allocation Regulation

A provision has been added stating that preliminary allocation can be made with the Ministry's approval in the period between the establishment of legal personality by the OIZ and the approval of the parcelling plan. Accordingly, after obtaining the Ministry's approval, an announcement will be made on the websites of the OIZ, the Supreme Organization of Organized Industrial Zones, and the Ministry, stating that preliminary allocation will be made on the first Monday of the month, and preliminary allocation requests will be collected.

If the areas to be preliminarily allocated meet the demand, the preliminary allocation will be made by the board of directors at the price determined by the OIZ. If the areas do not meet the demand, a shortlist containing requests up to twice the announced area size will be created, starting with the highest-scoring request based on the evaluation result. The preliminary allocation will then be determined through an auction or a lottery held in the presence of a notary. In areas where preliminary allocation is made, after the infrastructure is completed, the OIZ will invite the investor to sign a definitive land allocation agreement within three months, and the definitive land allocation agreement will be executed.

5. Amendments Regarding Land Allocation Agreements

It has been stipulated that the execution of land allocation agreements shall be conducted electronically via an online system.

Additionally, if the agreement is signed with a wet signature, it is required that a copy of the agreement be uploaded to the Ministry's online system no later than seven days from the date of signing.

6. Amendments Regarding the Cancellation of Land Allocation

With the amendments regarding the cancellation of land allocations, the period granted by the board of directors for those who fail to obtain a business opening and operating license within two years after obtaining a building permit for the allocated land has been reduced from an additional two years to one year, provided there are reasonable grounds.

Furthermore, a provision has been introduced allowing the Ministry to grant an extension of up to three years in total for participants who have obtained a building permit but have not yet acquired a business operating and working permit.

Additionally, a significant regulation has been established stipulating that if the Ministry discovers that the allocated parcels are being transferred for fraudulent or speculative purposes, the land allocation will be cancelled by the OIZ upon written notification from the Ministry. In such cases, participants who breach the land allocation agreement and the Regulation will not be entitled to claim compensation or request re-evaluation. The allocation fee will be refunded by the OIZ within a maximum of one year.

7. Amendments Regarding the Transfer of Parcel Allocation Rights

While it is specified that the parcel cannot be used contrary to its intended purpose, the following additional provision regarding the transfer of parcel allocation rights has been introduced:

◼ The transfer of allocation rights is permitted to a company wholly owned by the allocated individual or company, or to a company with the same shareholders and shareholding ratios as the allocated company.

Additionally, in partial spin-off of companies to which the allocation has been made, it is mandatory that all the shares of the acquiring company are owned entirely by the company subject to spin-off or its shareholders.

8. Amendments Regarding Share Transfers in Companies with Allocated Land

For preliminary land allocation and allocation agreements, it has been made mandatory to obtain the Ministry's approval for any changes in the shareholding structure of the company allocated the plot, where the change exceeds 49% of the company's total capital. Otherwise, the allocation will be cancelled.

In this context, the OIZ will review the company’s shareholding structure during the stages of obtaining the building permit, occupancy permit, and business operating and working permits for the parcel. If share transfers exceeding 49% of the company's capital without Ministry approval are detected, such transactions will be deemed speculative, and the parcel allocation will be cancelled.

For companies whose allocation is cancelled, a new plot allocation can be made at the current price after deducting the amount previously paid for the allocation. In such cases, companies that have acted contrary to the land allocation agreement and the provisions of the regulation will not be entitled to any compensation or revaluation claims.

Amendments Regarding the Refund of Amounts Paid in the Event of Allocation Cancellation

According to the Regulation, if the land allocation is cancelled due to the failure to obtain a positive Environmental Impact Assessment (EIA) report, building permit, or business operating and working permits, the refund of the amount paid for the parcel allocation or sale will be adjusted based on the revaluation rate from the date the payment was made.

Similarly, if an allocation is cancelled at the end of the additional period granted for the rectification of deficiencies after obtaining a building permit but failing to obtain a business opening and operating license, the refund of the amount paid for the parcel allocation/sale will be updated according to the statutory interest rate specified in Article 1 of Law No. 3095 on Legal Interest and Default Interest, from the date the payment was made until the date the refund is made.

It is also stipulated that the adjustment coefficient to be applied to the amount to be refunded in case of the return or cancellation of allocations made in foreign currency can be determined in the allocation agreement between the OIZ and the participant.