Feed Two Birds With One Scone – Recent Changes to the Regulation on Acquiring Turkish Citizenship by Investment

The regulation amending the Regulation regarding the Implementation of the Law on Turkish Citizenship (the “Amending Regulation”) has been published in the Official Gazette No. 31711 and dated 6 January 2022. You can read the Amending Regulation here (available in Turkish only).

Turkish Citizenship By Investment: General Rules

The Amending Regulation amends Article 20 of the Regulation regarding the Implementation of the Law on Turkish Citizenship (the “Regulation”) which indicates the requirements that foreigners are obliged to fulfill in order to acquire Turkish citizenship by investment and the relevant process of citizenship application.

According to the second paragraph of Article 20 of the Regulation, foreigners who meet the investment requirements may acquire Turkish citizenship with the President’s approval. The requirements to acquire Turkish citizenship by investment are as follows:

a) Making a fixed capital investment of at least USD 500,000 or equivalent foreign currency, which is confirmed by the Ministry of Industry and Technology,

b) Purchasing a property of at least USD 250,000 or equivalent in foreign currency, provided that an annotation is added to the land registry stating it will not be sold for three years or promising the purchase of the property in which a condominium or floor servitude has been established and at least the amount of USD 250,000 or equivalent foreign currency has been deposited in advance, with an agreement signed in a notary public, on the condition that it is annotated to the land registry that the property will not be transferred or abandoned for three years, which is confirmed by the Ministry of Environment, Urbanization and Climate Change,

c) Providing employment for at least 50 people, which is confirmed by the Ministry of Labour and Social Security,

d) Depositing at least USD 500,000 or equivalent in foreign currency into banks operating in Turkey, provided that the amount is kept in those banks for three years, which is confirmed by the Banking Regulation and Supervision Agency

e) Purchasing public debt instruments of at least USD 500,000 or equivalent foreign currency, provided that they are kept for three years, which is confirmed by the Ministry of Treasury and Finance, and

f) Purchasing real estate investment fund participation shares or venture capital investment fund participation shares of at least USD 500,000 or equivalent foreign currency, provided that the shares are kept for at least three years, which is confirmed by the Capital Markets Board.

What Has Changed?

Prior to the Amending Regulation, it was possible to directly deposit or purchase the Turkish Lira equivalent of the above-mentioned amounts. Within the scope of the amendments made, foreigners who want to acquire Turkish citizenship cannot directly deposit or purchase the Turkish Lira equivalent of the specified amounts in the Regulation, rather only the USD or the equivalent foreign currency amounts.

The Ministry of Labour and Social Security, the Ministry of Environment, Urbanization and Climate Change, the Ministry of Treasury and Finance, the Ministry of Industry and Technology, the Banking Regulation and Supervision Agency and the Capital Markets Board are the authorized authorities to confirm whether foreigners have made the relevant investments in the scope and amount specified in the second paragraph of Article 20. A new paragraph, (paragraph nine) of Article 20, states that the mentioned institutions will also determine the relevant procedures and principles applied in the confirmation process.

According to another amendment introduced in paragraph 10 of Article 20 in the Amending Regulation, as of 6 January 2022, the foreign currency amounts specified in the abovementioned subparagraphs (b), (d), (e), and (f) of paragraph 2 of Article 20 shall be sold to a bank operating in Turkey, and then shall be sold to the Central Bank by these banks. As a result of the sale, the Turkish Lira amounts received pursuant to subparagraph (d) will be kept in Turkish Lira deposits, and the Turkish Lira amounts obtained pursuant to subparagraph (e) will be kept in public debt instruments in Turkish Lira for three years. The principles of implementation regarding this issue will be determined by the Central Bank of the Republic of Turkey.

The underlying reasons for these amendments are due to the currency fluctuations occurring in the Turkish Lira.