The Regulations Amending the Regulations on the Implementation of the Turkish Citizenship Law entered into force by being published in the Official Gazette on January 6, 2022 and numbered 31711 (“Regulations”). The regulation introduced important changes in the procedures for acquiring Turkish citizenship through investment.
What does the regulation say?
- To obtain citizenship through capital or real estate investments, the Regulations on the Implementation of the Turkish Citizenship Law set certain limits in US dollars. While other foreign currencies within these limits are accepted, the phrase “or the corresponding Turkish Lira” has been removed. Thus, foreigners must now invest in a foreign currency in order to qualify for citizenship in respect of capital or real estate investments.
- In order to meet the investment requirement, foreign nationals are now required to exchange the invested foreign currency through a bank operating in Turkey prior to the transaction and hence convert the amount into Turkish liras .
- Thereafter, the relevant bank is obliged to exchange the foreign currency through the Central Bank of the Republic of Turkey (“CBRT“).
- CBRT will retain the corresponding investment in Turkish Lira for a period of three years. The CBRT will hold the relevant investment in depository accounts in Turkey for investment-related transactions through Turkish depository accounts, and in government debt securities in Turkey for investment-related transactions through Turkish debt securities. . The procedures and principles in this matter will be determined by the CBRT.
- In addition, the ministries and public institutions concerned, which are responsible for identifying the investment condition determined in accordance with the regulations, will determine their own procedures and principles regarding these obligations.
According to the Turkish Statistical Institute, there were more than 45,000 sales of residences to foreigners in 2019 and more than 40,000 in 2020. With the reduced effects of the COVID-19 pandemic in 2021, this number exceeded 50,000 in November. With recent changes, given the exchange rate fluctuations Turkey has experienced over the past few months, the goal may be to take advantage of growing demand more effectively by increasing demand for the Turkish lira and supporting foreign exchange reserves. of the CBRT. In this context, future regulations in this area must be carefully monitored.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.