Turkey: An Overview On The Foreign Capital Movement In Turkey From The Perspective Of Financial Crimes

Last Updated: 22 July 2015
Article by Nil Tomul

Foreign capital has a significant place in the development of the Turkish economy in line with the trade idea of the global economy reaching out the macro dimensions exceeding the countries. Therefore, for example, Law No. 4875 on Foreign Direct Investments etc. legislations have been amended to encourage the foreign capital for investing to Turkey. As a result of these amendments in the legislation, the investments of the foreign capital companies in Turkey have increased, thus the investment based money flow from abroad has been accelerated.

Although the amendments in question in the legislation have ensured legitimate investments which caused an increase in the international economical and financial relationships, they have also caused illegitimate resources to be transferred to the country. Against the fact of money flow not based on a legitimate resource, it has required to establish financial intelligence units and effectively struggle against the national and international laundering of crime revenues. Therefore, the principles and methods related to the payment of the capital shares undertaken by the foreign partners of the companies are of great importance in terms of preventing the money transfers from being considered as a suspicious transaction by the banks and being subjected to financial investigation by the financial intelligence units. The Circular on Capital Movements of the Central Bank of the Republic of Turkey (TCMB) is evaluated below in the light of financial crimes.

Bringing Foreign Capital Share to Turkey

The cash capital brought by the foreign investor to the country for being used in establishing a company or branch with foreign capital, participation to the existing companies or share transfer or capital increase has to be deposited to a bank operating pursuant to the Banking Law No. 5411 and to be in a currency traded by the TCMB.  

The Banks are liable for proving that the capital share amount, transferred or effectively brought, is actually received from the foreign partner abroad pursuant to the notice no. 55297 issued by the Undersecretariat of Treasury on September 10, 2003.

In this context, in order determine whether the foreign capital share amounts brought in effectively are actually from the foreign partner, the amount should be declared to the customs when entering the country and a cash statement form should be issued by the customs authorities. In order to recognize the amounts transferred from the free zones to Turkey as foreign capital, these amounts should have entered the free zone from abroad.

In line with article 344 "Payment of the Share Premiums" of the Turkish Commercial Law No. 6102, the cash payments brought in as a foreign capital share premium should meet the following in order to be deposited to a bank and to be accepted as a share premium by the relevant bank:

  1. The reason for bringing should be clearly stated as "foreign capital share" in the "Reason of Arrival" of the cash statement form,
  2. The identity of the person submitting the cash statement form should be made,
  3. The written statement of the person bringing the foreign capital share in cash should be sought for.

If the payments received as a foreign capital share premium are taken into Turkish Lira deposit account or foreign exchange account with a foreign exchange receipt document and a receipt is issued, then the following information should be available on the foreign exchange receipt certificate or the receipt:

  1. Name of the foreign capital company,
  2. Name of the foreign partner,
  3. Country where the foreign exchange or Turkish Lira is sent from,
  4. Receipt method of the foreign exchange or Turkish Lira (money transfer or effective),
  5. Type of foreign exchange, its amount / Turkish Lira amount
  6. US dollar equivalent (intermediary bank cross rate),
  7. Turkish Lira equivalent over the current foreign exchange buying rate of the intermediary bank,
  8. The reason for foreign capital share (capital increase, transfer related to affiliate, etc.),
  9. Industry or service line which the foreign capital share is received for.

Payment of Foreign Capital Share

The amount sent by the foreign partner for being used in a company establishment or capital increase within the scope of the Turkish Commercial Law No. 6102 and deposited to a special account to be opened for the company in a bank regulated under the Banking Law No. 5411 will be paid by the bank to the company only upon submitting a letter to bank received from the trade registry office and stating that the company has gained a legal entity.

Paying Capital Increase Fee Instead of Capital Advance

In order to tighten the capital movement controls and to prevent the company from using the money received as a capital, an amendment has been made in the Circular on Capital Movements with the Circular no. 2013/YB-7 of TCMB on 29.03.2013, and the acceptance of capital advance payments is prevented. Accordingly, while it was free for the foreign capital companies to accept capital advance payment from the foreign partner and to use this amount for the company before the Circular no. 2013/YB-7 dated 29.03.2013 is issued, this freedom is abolished with the issuance of the circular. In this respect, the amount sent for capital increase will now be monitored as a capital increase amount from the date it is entered as a credit to the Turkish Lira deposit or foreign exchange deposit account to the date it is registered.

In case the capital increase amount is not registered as a capital and requested to be returned back to abroad, then the refunding of this account will be made according to the relevant principles and methods. On the other hand, it is also possible and probable that the credit received by the foreign capital company from the foreign partner is not refunded to abroad, and included to the capital as the foreign partner's capital share premium. In this case, when the process related to adding the amount in question to the capital, it is required to notify the General Directorate of Statistics Directorate of Payments Balance in writing that the credit of the bank, which has received the abroad credit, is not refunded and added to the capital.


There are some liabilities imposed to the financial institutions and to the ones operating in some industries (for example investment trusts, insurance, reassurance and pension companies as well as insurance and reassurance brokers, investment fund directors, asset management companies) both in the international arena and with the domestic law in order to struggle against the laundering proceeds of crime and to prevent the use of the financial system by the criminals. Banks are among the top of the industries which a liability is imposed to.

Pursuant to article 4 of the Law on the Prevention of Laundering Proceeds of Crime no. 5549, in case of any information, suspicion or any sign requiring suspicion of the banks that the asset subject to the transaction carried out or attempted to be carried out before the banks are obtained by illegal means or used for illegal means, then the banks are obliged to inform about such transaction.

In this respect, considering that the cash capital brought by the foreign capital to the country has to be deposited to a bank operating pursuant to the Banking Law No. 5411 and any kind of transaction has to be completed before the banks, we believe the money transfers to be made before the banks related to the company establishment, capital increase and share transfer should be made pursuant to the Circular no. 2013/YB-7 of TCMB issued on 29.03.2013, in cooperation with the banks, in order to not consider them within the scope of suspicious transaction.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.