By Uglobal Staff
Turkey has announced a major change in its citizenship by investment law, making all such investments conditional as the country looks to boost its foreign currency reserves and stem the continuing slide of its Turkish lira, which in recent months has nosedived in value in terms of the U.S. dollar exchange rate.
According to the new amendment published in the country’s official gazette, all CBI investments would now have to be, firstly, made in foreign currencies and, secondly, these investments must then be converted to the Turkish lira through the Turkish Central Bank.
Previously, foreigners could meet the required CBI thresholds of at least $250,000 for real estate, or $500,000 deposits using their equivalent savings in the Turkish lira but now that option appears to have been left out. The Regulation Amending the Regulation on the Implementation of the Turkish Citizenship Law, which was published in the official gazette on Jan. 6, no longer says "the corresponding Turkish lira" for the equivalent foreign currency investment amount is now valid.
However, Omer Faruk Akbal, who heads Turkey’s Real Estate International Promotion Association, also known as GIGDER, said: “We expect that foreign investors who have Turkish lira in their hands will not have an obstacle to taking advantage of the relevant law and that the issue of how they should make their investments will be clarified with circulars or guidelines to be prepared by the relevant institutions,” according to the Turkish newspaper, Daily Sabah.
“We export $19 million worth of real estate every day. Therefore, there should be no gaps in the process,” Akbal added.
Foreign CBI investors need to meet new Turkish lira requirements
Whether the investment is made in real estate or in deposits, or in a venture capital or property fund or a business that employs 50 people, all foreign investors looking to gain citizenship via investment in Turkey would now have to sell their foreign exchange threshold amount to the Turkish Central Bank and maintain the equivalent monies in the Turkish lira and maintain it for a period of three years if kept in deposit accounts at Turkish banks, according to the new amendment.
Since a government circular detailing exactly how this process would work is yet to come out, it is expected that the foreign investor would first have to move their foreign currency threshold amount to an approved Turkish bank, which would then ensure that the money is converted to the Turkish lira via the Turkish Central Bank and then this converted money – kept in deposit accounts or government debt instruments – would be used for the foreign applicant’s CBI process in the country.
Turkish immigration attorney Burçin Barlas, a founding partner at Barlas Law Firm (BLF), cautioned foreign investors in making decisions in haste and urged them to wait for the official government circular to make sense of the new changes in Turkey's CBI law.
"The practice and the conditions of the recent change in the law will be determined through a circular to be issued by the Ministry of Interior Affairs," Barlas told Uglobal, adding that the circular was expected to be issued within seven-to-10 days.
According to the Turkish Central Bank’s data, Turkey earned $5.7 billion from selling 40,812 properties to foreign investors in 2020; in the first 11 months of 2021, the country sold 50,735 properties, which was more than its 50,000 annual threshold.
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