Turkey: Acquisition Of Turkish Citizenship By The Way Of Investment

Last Updated: 14 November 2019
Article by Dilara Tamturk
  1. OVERVIEW

Today, citizenship is being used as a tool to promote foreign investment, to strengthen labor force and for other economic reasons by the governments and the such options to acquire citizenship through investment are made available in many countries.

As of 2016, it become possible to acquire Turkish citizenship by foreigners who obtained a short-term residence permit pursuant to subparagraph (j) of the Article 31 of the Law on Foreigners and International Protection No. 6458 ("Law No. 6458"). The same applies to foreigners who hold a Turquoise Card and their foreign spouses, his and her foreign minor children or foreign dependent children by enacting an Article 27 of International Workforce Law No. 6735 which amends the Article 12 of the Law No. 5901 with regards to acquiring Turkish citizenship by exceptionally.

The subparagraph (j) of the Article 31 of the Law No. 6735 regulates the special type of short-term residence permit as for the foreigners who does not work in Turkey but will make an investment within the scope and amount that shall be determined by the Council of Ministers. Thereby, although it had been possible to acquire Turkish citizenship through investment as of 2016, there were no certain criteria for those who was planning to invest in Turkey.

The type and amount of the investment as for the exceptional acquisition of Turkish citizenship is regulated by the Council of Ministers' Decision No. 2016/9601, dated December 12, 2016 which was published and entered into force on January 12, 2017 thorough amending the Article 20 of the Regulation of the Implementation of the Turkish Citizenship Law ("Regulation").

With the Presidential Decree No. 106 published in the Official Gazette dated September 19, 2018, the amendments to the Regulation reduced the amount of investment required for acquiring Turkish citizenship.

More recently, one of the exceptional cases based on purchasing a real estate with a minimum value of $250,000, was further amended by the Presidential Decree No. 418 through the publication in the Official Gazette dated December 7, 2018 and it will now be possible to apply for Turkish citizenship by executing preliminary sale contract before notary public as for the real estates under construction projects provided that a real estate has construction servitude deed or condominium deed.

In this regard, the process of acquiring Turkish citizenship by way of investment based on the investment type is explained in detail below.

  1. ACQUIRING TURKISH CITIZENSHIP BY WAY OF INVESTMENT
  1. GENERAL REMARKS

Pursuant to recent amendments introduced by the Presidential Decree No. 106 published in the Official Gazette dated September 19, 2018 and Presidential Decree No. 418 published in the Official Gazette dated December 7, 2018; foreigners who satisfy at least one of the below-noted investment requirements may be granted a citizenship, subject to the approval and an administrative decision of the President:

a) Foreigners who make a fixed capital investment amounting to a minimum $500.000 or equivalent foreign currency or equivalent amount of Turkish Lira [prior to the amendment such amount was $2,000,000] in a Turkish corporate entity that is determined by the Ministry of Industry and Technology;

b) Foreigners who purchase a real estate property with a minimum value of $250.000 or equivalent foreign currency or equivalent amount of Turkish Liras [prior to the amendment such amount was $1,000,000] and attached an annotation of no-sale for at least three (3) years at the relevant title registry; or foreigners who purchase a real estate property which has a property ownership or a construction servitude on it, with a preliminary sale contract executed before a notary public and at least $250,000 or amount of foreign currency or Turkish Liras is paid in advance and such notarized preliminary sale contract shall be recorded at the relevant title registry with the undertaking not to transfer or assign the agreement for a period of three (3) years that is determined by the Ministry of Environment and Urbanization;

c) Foreigners who generate employment for at least 50 individuals [prior to the amendment such amount was 100 individuals] that is determined by the Ministry of Family, Labor and Urbanization;

d) Foreigners who deposit a minimum of $500.000 or equivalent foreign currency or equivalent amount of Turkish Lira to banks that operate in Turkey [prior to the amendment such amount was $3,000,000] with the condition to keep such deposit in the relevant bank for at least three (3) years that is determined by the Banking Regulation and Supervision Agency;

e) Foreigners who purchase state debt instruments with the value of a minimum of $500.000 or equivalent foreign currency or equivalent amount of Turkish Lira [prior to the amendment such amount was $3,000,000] and keep in reserve for at least three (3) years that is determined by the Ministry of Treasury and Finance;

f) Foreigners who purchase real estate participation fund share and capital investment trusts fund share with a minimum value of $500.000 or equivalent amount of foreign currency or Turkish Liras [prior to the amendment such amount was $1,500,000] on the condition to keep those in reserve for at least three (3) years that is determined by the Capital Market Board.

Please also note that the foreign currency amounts mentioned above shall be determined based on the currency exchange rate or cross foreign exchange rates of the Turkish Central Bank at the date of application.

  1. THE PROCESS TO BE FOLLOWED FOR TURKISH CITIZENSHIP BY WAY OF INVESTMENT

The process for obtaining Turkish citizenship by way of investment consists of three (3) stages. These stages are as follows:

(1) Fulfilling the one of the investment conditions pursuant to Article 20 of the Regulation and obtaining receipt of a Conformity Certificate from relevant authority; and

(2) Obtaining a short-term residence permit as per Article 31/1-j of the Law No. 6458; and

(3) Applying for Turkish citizenship by way of investment.

Required documents, procedures and principles for these steps are explained in detailed below.

  1. Obtaining Receipt of Conformity Certification as per Investment Types for Citizenship Applications

The following six (6) investment procedures and principles are independent from each other. The foreign investor may choose one of the investment options and submit the documents subject to such option.

1.1.Acquisition of Turkish Citizenship by Making A Fixed Capital Investment

1.1.1. The Procedures and Principles for the Fixed Capital Investment Applications

The Ministry of Industry and Technology determined following procedures and principles for making a fixed capital investment amounting to a minimum USD 500,000 or equivalent foreign currency or equivalent amount of Turkish Lira in a Turkish corporate entity:

  • Making a fixed capital investment shall include assets to produce goods and service such as land, buildings, machinery and equipment. Although only purchasing real estate shall not grant a right to apply Turkish citizenship by way of making a fixed capital investment, expenditures for the purchase of real estate are considered as part of the investment.
  • If foreign investor acquires all shares or becomes a shareholder at a certain ratio at a non-public company; the amount corresponding to the acquired share by the foreign investor shall be at least USD 500,000 or equivalent foreign currency or equivalent Turkish Lira. In such cases, the applicant may be required to submit a valuation report provided by the relevant authorities in order to determine the market value of the acquired shares of the company.
  • In case of additional fixed capital investment is made in an existing investment, the increase in the amount of fixed capital investment as of the date of additional investment and the share of foreign investor in the company shall be taken into consideration. In other words, if the foreign investor became a shareholder at a certain ratio in an investor company, the amount that will arise as a result of multiplying the share ratio of the foreign investor by total additional investment amount shall be at least USD 500,000 or equivalent foreign currency or equivalent Turkish Lira.
  • Fixed capital investment made before January 12, 2017 shall not entitle foreign investor to apply Turkish citizenship.
  • For future applications to be made after January 12, 2017, maximum three (3)-year expenditures will be considered retroactively in the calculation of fixed capital expenditures.
  • Real person foreign investor who are entitled to acquire citizenship by making a fixed capital investment, shall not transfer their shares to another real person or legal entity for at least three (3) years.

1.1.2. Required Documents for Obtaining Certificate of Conformity:

  • Investment Information Form [This form includes information regarding the company, the investment which is transferred to the company's stakeholders' equity and foreign investor's share in fixed capital investment]
  • Copy of valid passport and its notarized Turkish translation
  • Copy of residence permit card (if any)
  • Particular purpose report from a certified public accountant (CPA) which shows the fixed capital investment of a minimum USD 500,000 or equivalent foreign currency or equivalent Turkish Lira
  • In case the fixed capital investment made through a legal entity, trade registry gazettes of this company showing the shareholder structure and the capital amount.

1.2.Acquisition of Turkish Citizenship by Purchasing A Real Estate Property or Executing A Preliminary Sale Contract

1.2.1. Acquisition of Turkish Citizenship by Executing A Preliminary Sale Contract

As mentioned briefly above, prior to the amendments made by the Presidential Decree No. 418 through the publication in the Official Gazette dated December 7, 2018, foreign investors could purchase only immovable property after the establishment of condominium ownership and construction is completed. However, with the new amendments introduced, it is now possible to apply for Turkish citizenship by purchasing real estates from the projects still under construction provided that:

  • Condominium ownership or condominium servitude shall be established for the said immovable.
  • Minimum $250,000 or amount of foreign currency or Turkish Liras shall be paid in advance.
  • A preliminary sale contract shall be executed before a notary public; and
  • Such notarized preliminary sale contract shall be recorded at the relevant title registry with the undertaking not to transfer or assign the agreement for a period of three (3) years.

For the ease of understanding of abovementioned amendment, the terms for "condominium ownership" and "construction servitude" in Turkish Law are explained below:

  • Construction servitude can be defined as an ownership right of immovable property under construction. Construction servitude is a servitude type depending on building plot share and converted into the condominium ownership upon receiving the occupancy certificate for the entire building ex officio under the provisions of Condominium Ownership Law No. 634.
  • Condominium ownership can be defined as an ownership right which is established upon the completion of entire building and receiving occupancy permit.

Upon the completion of a building with construction servitude deed, the contractor applies to the relevant municipality for compliance audit of its previously submitted project. The relevant units in the municipality examines the construction on-site for its compliance with the approved project. As a result of the completion of this audit, if it is determined that the construction is completed in accordance with the project, the municipality will issue an "Occupancy Permit".

Within this regard, there are some disadvantages to purchase a building with the construction servitude deed. For example, the building can be constructed in violation of its project approved by the relevant municipality after receiving the construction servitude deed. In this case, the person who purchased the apartment may encounter following problems:

  • The building constructed in violation of its approved project may be demolished by the municipality or governorship pursuant to the decision of the municipal executive committee or provincial administrative committee; or
  • Other right holders may obtain demolishment decision regarding the relevant apartment due to fact that that common areas such as parking and warehouse are not included in the apartments.

In addition, banks are seeking the conditions that the apartment with condominium title deed shall have a certificate of occupancy while they are giving housing credits to their customers. Therefore, even if the apartment has been constructed in accordance with its project, it is always risky to purchase an apartment without certificate of occupancy.

In the light of above explanations, a building with construction servitude deed carries higher legal risk whereas the condominium title deed is more legal basis. Therefore, all potential risks shall be examined before purchasing a real estate.

1.2.2. The Procedures and Principles for Purchasing A Real Estate Applications

In order to determine the procedures and principles for purchasing a real estate application, the Ministry of Environment and Urban Planning General Directorate of Land Registry and Cadastral Directorate of Foreign Affairs Department published many circulars such as: Circular No. 2017/8 (1779) dated November 15, Circular No. 2018/10 (1789) dated September 19, 2018, Circular No. 2018/12 (1891) dated October 15, 2018, Circular No. 2018/14 (1793) dated December 10, 2018 and l Circular No. 2019/5(1799) dated May 30, 2019 respectively.

In this regard, the principles and procedures to be applied by the Directorate of Land Registers which is determined by a guide as an attachment of the latest Circular No. 2019/5 (1799) dated May 30, 2019 is examined under the following headings

1.2.2.1.Legal Basis

The Regulation is amended three (3) times on January 12, 2017, September 10, 2018 and December 7, 2018 respectively. Pursuant thereto:

  • In order to apply for Turkish citizenship by way of real estate investment in Turkey, the real estate shall be purchased with a minimum value of USD 1,000,000. - between the dates January 12, 2017 – September 18, 2018.
  • If such real estate is purchased after September 19, 2018 and/ or such real estate is purchased with preliminary sale contract issued before notary public after December 7, 2018; the minimum value shall be USD 250,000.-

1.2.2.2.Legal Restrictions on Acquisition of Real Estates by Foreigners

In accordance with the Article 35 of the Land Registry Law No. 2644, amended by Law No. 6302, entering into force on 18th May 2012, the condition of reciprocity for foreigners who wish to buy property in Turkey is abolished.

Turkey therefore allows citizens of 183 States to purchase real estate property in Turkey without being subject to any reciprocity principles. Citizens of such 183 countries are eligible to obtain real estate property and related rights subject to the below listed general limitations:

  • The surface area of the real estate properties subject to foreign ownership or other limited property rights (including mortgages) shall not exceed ten (10%) percent of the administrative district area for all foreigners where such real estate is located at. The Council of Ministers is also authorized to double such limits if necessary;
    • The surface area of the real estate property shall not exceed thirty (30) hectares (30 ha is approximately 300,000. - m² or 3,223,000. - ft²) per each foreign individual all-around Turkey. The Council of Ministers is also authorized to double such limits if necessary;
    • The subject real estate shall not be located in a military forbidden or security zone. This clearance is provided by the title registry offices and is a standardized system.

1.2.2.3.Type of Immovable Property

  • Persons with foreign nationality can purchase any kind of property (house, business place, land, field) within the abovementioned legal restrictions. However, if subject property is purchased without a constructed building (such as a land or a field), the foreigners shall submit the project which they will construct on the property to the relevant Ministry within two (2) years.
  • A preliminary sale contract, which shall be executed before a notary public, is possible for immovable properties with condominium ownership or condominium servitude.
  • The real estate shall not be registered to any other person, including the foreigner's spouse or children. Also, the real estate shall not have been purchased before January 12, 2017 by the foreigner himself, foreigner's spouse or children.
  • The real estate shall not be registered on behalf of the company where the foreigner is the partner or manager.

1.2.2.4.The Number of Immovable Property

There is no limitation on the number of immovable properties that can be purchased through a sale or executing a preliminary sale contract before notary.

If a foreigner purchases more than one (1) real estate at the same time or different time-scale and the sum of the values of such real estate are $250,000.- or more, each real estate shall also have an annotation of no-sale for at least three (3) years.

1.2.2.5.Value Assessment of the Purchased Real Estate(s)

When determining the value of purchased immovable, the following three (3) value types shall provide the value of USD 1,000,000 or USD 250,000 on the dates specified in the Regulation separately:

(i) The sum of the sale price(s) of the real estate(s) indicated in the official title deed and/or preliminary sale contract.

(ii) The sum of the values indicated in the real estate appraisal report (s)

(iii) The sum of the transferred amount(s)/payment(s) indicated in bank receipt.

A real estate appraisal report that shows the value of such real estate shall be drafted by a real estate appraiser with a valid license approved by Capital Market Board ("CMB") and Banking Regulation and Supervision Agency ("BRSA") in order to determine the value of the subject real estate. The date of issuance of such assessment report shall be three (3) months (at most) prior to the application date. Such appraisal report shall be valid until the end of the transaction.

In case the applicant completed the purchasing transactions before obtaining a real estate appraisal report, the date of real estate appraisal report shall be same with the date of purchase.

Previously, the sale price of the real estate indicated in the official deed shall not be less than the amount which is stated in the real estate appraisal report. Now, the sale price of the real estate indicated in the official deed and a real estate value appraisal report shall be higher than USD 1,000,000.- or USD 250,000.- on the dates specified in the Regulation- whereas the sale price of the real estate indicated in the official deed is not required to be higher than the amount stated in the real estate value assessment report.

In case the real estate is purchased from the projects under construction, the value of the property upon completion shall be calculated and indicated in the real estate appraisal report.

1.2.2.6.Making Payments Through Bank

  • Submitting a bank receipt is mandatory for the purchase transaction subject to Circular No. 2018/12 (1792) dated October 15, 2018. Therefore, bank receipts are not required for sales made before such Circular date.
  • The transfer or payment of the sale or preliminary sale contract made after October 15, 2018 shall be made through the bank. Within this regard, bank approved receipt (transfer, electronic fund transfers or bank receipt regarding blocked check) confirming that the amount has been deposited into the account of the purchasers or other relevant person by the vendors or relevant person shall be submitted. For the transfers from abroad, the receipt of the bank account which the sale amount is transferred shall also be submitted.
  • The date of bank receipt can be after the date of selling. However, in case of a sales through executing a preliminary sales contract, the date of bank receipt shall be before the contract is issued before a notary public or shall be on the day of the executing date of the contract at latest. The payment receipt made after the date of preliminary sale contract shall not be taken into consideration since it is not as a "cash payment"

1.2.2.7.Determining the Exchange Rates

In this regard, following criteria shall be taken into consideration:

  • Exchange Rates of Bank Receipts: If the sale value of the immovable is paid in TRL, sale amount shall be converted into USD over the exchange rate of effective selling announced by the Central Bank of Republic of Turkey ("CBRT") on the last business day before the date of each payment transaction.
  • Exchange Rates of Official Title Deed or Preliminary Sale Contract: In order to determine the value of TRL that is specified in the official title deed or determined in the preliminary sale contract, against its equivalent value in the USD, the exchange rate of effective selling announced by the CBRT on the last business day before the date of selling transaction or preliminary sale contract. However, if more than one bank receipt with different dates is submitted, there may be a problem of exchange rate difference in finding USD equivalent of the value of TRL in the title deed or the value of TRL determined in the preliminary sale contract. In this case, the value of TRL that is specified in the official title deed or determined in the preliminary sale contract, shall be converted into USD over the exchange rate of effective selling announced by the CBRT on the last business day before the date of each payment transaction. The sum of these amount shall not be less than the sum of the transferred amounts indicated in bank receipt(s) that provides the value of USD 1,000,000 or USD 250,000 on the dates specified in the Regulation
  • Exchange Rates of the Real Estate Appraisal Report: In order to determine the value of TRL that is specified in the real estate appraisal report, against its equivalent value in the USD, the exchange rate of effective selling announced by the CBRT on the last business day before the date of the real estate appraisal report shall be taken into account. In case the real estate appraisal report is issued after the date of selling, the appraisal report amount shall be converted into USD over the exchange rate of effective selling announced by the CBRT on the last business day before the date of selling transaction.

1.2.2.8.Mortgage and Attachment

  • In the sale or preliminary sale contract transactions for real estate, it is possible to sale of real estate with mortgage or attachment.
  • In case of the real estate being mortgaged or purchased as mortgaged, the amount after deducting the mortgage cost from sales price, shall be at least as much the determined amount in the Regulation.

1.2.2.9.Installment Sales

New regime introduced the option to purchase real estate in installments provided that a real estate property shall be purchased after September 19, 2018 and each installment shall be made after September 19, 2018. The amounts paid as an installment before September 19, 2018 shall not be taken into consideration. The foreign currency amounts of the installments shall be determined based on the currency exchange rate of the Turkish Central Bank at the date of transactions regarding purchasing a real estate.

1.2.2.9.1. To Attach Annotation of No-Sale for at Least Three (3) Years on Immovable Property/Immovable Properties

In the registry of title deeds of the immovable property/immovable properties subject to the sales and/or preliminary sale contract, it shall be stated that "Pursuant to Article 20 of the Regulation, there is a commitment that it will not be sold for three (3) years from the date of annotation or the date and/or the preliminary sale contract will not be transferred and cancelled for three years from the date of annotation".

1.2.3. Required Documents for Obtaining Certificate of Conformity

  • Valid passport and its notarized Turkish translation
  • Four (4) passport type pictures in color
  • Official title deed regarding to selling transaction or notarized preliminary sale contract
  • Real estate appraiser report
  • Bank approved receipt (transfer, electronic fund transfers or bank receipt regarding blocked check) confirming that the amount has been deposited into the account of the purchasers or other relevant person by the vendors or relevant person.
  • Attaching Annotation of no-sale for three (3) years on the immovable property/properties) at relevant tittle registry

Applications are evaluated by the Ministry of Environment and Urban Planning General Directorate of Land Registry and Cadastral Directorate of Foreign Affairs Department. The applications that fulfill the conditions, shall be concluded within seven (7) working days.

1.3.Acquisition of Turkish Citizenship by Generating Employment

1.3.1. Required Documents for Obtaining Certificate of Conformity

The foreign natural person who request a certificate of conformity by justification for employment of at least fifty (50) individual, shall submit a written application to the Ministry of Family, Labor and Social Services (General Directorate of International Labor) with the following documents:

  • Notarized signature circular/signature declaration of the applicant
  • Employment Information Form
  • Valid passport and its notarized Turkish translation
  • Four (4) passport type pictures in color
  • Trade registry gazette records and current trade registry certificate showing the partnership and capital shares of companies or companies employing at least fifty (50) Turkish citizens in total.
  • Current dated Employee List obtained from the Social Security Institution system showing the list of insured employees in the workplace/ workplaces of which the foreign real person is the owner or partner.
  • The document obtained from the Revenue Administration system which shows the tax liability status of the workplace/establishments where the foreign real person is the owner or partner.
  • The document obtained from the Social Security Institution system which shows the status of social security premium debt of the workplace/establishments where the foreign real person is the owner or partner,
  • A written statement on whether the Company has been fined in the last six (6) months in the administrative audits conducted by public institutions and submitting of relevant documents if the Company has been fined.

Applications are evaluated by the Ministry of Family, Labor and Social Services General Directorate of International Labor. The applications that fulfill the conditions, shall be concluded within seven (7) working days. In case the applications made with missing information and documents, the applicant is given thirty (30) days to complete the deficiency. Applications that are not completed within this period are rejected.

In conclusion, the evaluation results of the application regarding the foreigners who fulfill the requirements shall be notified to the Ministry of Interior and the applicant.

1.4.Acquisition of Turkish Citizenship by Depositing Money to Turkish Bank Located in Turkey

1.4.1. The Procedures and Principles for the Depositing Money to Turkish Bank Applications

The Banking Regulation and Supervision Agency ("BRSA") and procedures and principles regarding such investment type tried to be explained through the publication of the frequently asked questions ("FAQs") on the official website of the BRSA. Please note below the summarized information regarding to procedures and principles pursuant to such published FAQs:

  • Foreigners shall deposit a minimum of $500,000 or equivalent amount in foreign currency or Turkish Liras to banks that operate in Turkey with the condition to keep such deposit at such bank for at least three (3) years. The amount shall be convertible (such as convertible foreign currency, precious metal that are determined by the CBRT) and shall be equivalent to $500,000.-.
  • It's not required that such amount shall be deposited to only one (1) single bank that operates in Turkey. In this context, foreigner may deposit the money more than one (1) bank operating in Turkey with the condition to keep such deposit at such bank for at least three (3) years and the total deposited amounts shall be equal to $500,000.-.
  • It's essential to deposit such amount to banks that operate in Turkey. Therefore, it is not possible to assume an amount as convenient for the Turkish citizenship application which is deposited to a bank in abroad even if it is a branch office or association of Turkish Bank.
  • Foreigner shall also apply for Turkish citizenship based on a joint account (with his/her spouse or any other person) provided that joint account holder(s) other than the applicant has an express consent that they keep such deposit at bank for at least three (3) years.
  • It is possible to change the currency or type of investment in such three (3) year period which is mentioned in Regulation (such as purchasing a real estate investment fund share and capital investment trusts fund share with a minimum value of $500.000). However, in case of shifting the amount to another investment type, such process shall be instantaneous and there shall not be any interruption for three (3) years period. Otherwise, the BRSA shall promptly inform the Ministry of Internal Affairs regarding such interruption.
  • Please also note that in such three (3) year period, a foreigner may benefit from the interest, dividend and similar returns arising from the deposited amount pursuant to executed contracts with banks and type of the bank account provided that the deposited amount shall not fall below the amount of USD 500.000.-.
  • In the event that a currency other than the U.S. Dollar is deposited in the banks, the U.S. Dollar equivalent at the date of the opening of the account shall be determined and the deposited amount shall be expected to remain in the banks at the same rate determined for three (3) years. Therefore, potential alterations on exchange rates shall not be considered.
  • The amount which deposited in a Turkish bank will be blocked for three (3) years with applicant's request. However, this is not a blockade that makes the amount cannot be withdrawn by the holder of the bank account. As soon as the amount withdrawn by the account holder or it is fallen under 500.000 USD, the bank will report the situation to the BRSA and the BRSA will immediately inform the Ministry of Internal Affairs for initiation the cancelling process for Turkish citizenship. If this occurred once, new application will not be considered as an on-going time span [three (3) year period]. Since the amount can be withdrawn by the applicant, there shall not be any restriction on the deposit account such as a sequestration or any other legal limitations. If there occur any restriction, circumstance will be announced to Ministry of Internal Affairs.

1.5.Acquisition of Turkish Citizenship by Government Debt Instruments

1.5.1. Government Debt Instruments

The Debt Securities Market aims to determine the prices that investors will invest with fixed income securities in a competitive environment in the market and convert them into cash at any time. There are nine (9) types of debt securities announced by Borsa Istanbul: (i) Government Debt Securities, (ii) Central Bank of the Republic of Turkey (CBRT) Liquidity Bills, (iii) Revenue Sharing Certificates, (iv) Revenue Indexed Bonds, (v) Private Sector Bonds, (vi) Commercial Papers, (vii) Bank Bills, (viii) Asset-backed Securities and (ix) Asset-based Securities.

1.5.2. Procedures and Principles for Acquisition of Turkish Citizenship by Government Debt Securities

The Ministry of Treasury and Finance has not issued a circular. However, pursuant to paragraph (d) of Article 20 of the Regulation, the foreign investor holding at least USD 500,000 government debt instruments mentioned above shall be eligible for the application.

In order to qualify for citizenship within the framework of the Regulation, the foreign investor shall have the relevant shares without any interruption for three (3) years from the date the investment requirement is met.

1.6.Acquisition of Turkish citizenship by investing participation shares in Real Estate Investment Fund or Venture Capital Investment Fund

1.6.1. Principles and Procedures for Investing In Participation Shares of Real Estate Investment Fund or Venture Capital Investment Fund

The procedures and principles on the website of the Capital Markets Board ("CMB") are determined as follows:

  • The minimum investment requirement in the amount of USD 500,000 or equivalent foreign exchange or equivalent Turkish Lira for Real Estate Investment Trust ("REIT") or Venture Capital Fund ("VCF") participation shares, is calculated using the US dollar effective selling rate and/or cross exchange rate announced by the CBRT on the date when participation shares are transferred to the investor's account (if the acquisition is completed on different dates, the exchange rate of effective selling announced by the CBRT on the date of each acquisition transactions shall be taken into account or if the purchase is made at one time, the exchange rate of effective selling announced by the CBRT on the date of acquisition shall be taken into account.).
  • In order to be eligible for Turkish citizenship within the framework of the Regulation, the investor shall have the relevant shares without interruption for three (3) years as of the date of the investment requirement and in this regard, the participation shares shall not be reduced with the will of the investor through transactions such as sales and transfers.
  • The decrease in the value of participation shares below USD 500,000 due to the change in the exchange rate does not affect the acquisition of Turkish citizenship.
  • In case of a decrease in the value of the REIT of the VCF or the number of participation certificates (by transactions such as cash dividend and/or participation share refund or liquidation pursuant to the provisions of the international regulation and issuance certificate of the funds), it shall not be deemed as failure of fulfillment of the minimum investment requirement criteria.
  • Since it is determined by the Central Registry Agency ("CRA") that the applicant fulfilled the minimum requirement as per the Regulation, the situation shall be notified to the CMB within three (3) business days.
  • If there are any restriction on the participation shares of the REIT or VCF in terms of right in rem, seizure, provisional seizure or injunction within the three (3) year period for the exceptional citizenship application pursuant to subparagraph (e) of Article 20 of the Regulation, it shall be deemed that "purchasing those reserve on the condition to keep them for at least three (3) years " is not fulfilled.
  • The investors determined to have reduction in the balance of the account or any restriction on their participation shares in terms of right in rem, seizure, provisional seizure or injunction shall be notified to the CMB. Hereon, the CMB shall immediately notify the General Directorate of Immigration Office and General Directorate of Civil Registration and Citizenship Affairs and the applicant respectively.

1.6.2. Required Documents for Obtaining Certificate of Conformity

  • Valid passport and its notarized Turkish translation
  • Copy of the current and valid residence permit card of the applicant
  • Written application containing investment information related to the REIT or VCF purchased by CRA registry number

The CMB request information from the CRA whether foreign investor has fulfilled the conditions for participation shares of the REIT or the VCF pursuant to the Regulation, within two (2) business days after the submission of the application. Since it is determined by the CRA that the applicant fulfilled the minimum requirement as per the Regulation, the situation shall be notified to the CMB within three (3) business days. The Certificate of Conformity shall be issued by the CMB within two (2) business days upon the receiving a letter from CRA.

  1. Obtaining a short-term residence permit as per Article 31/1-j of the Law No. 6458

2.1.Application Procedures

A foreigner who applies for Turkish citizenship by way of investment shall first obtain short term (temporary) residence permit as per to Article 31/1(j) of the Law on Foreigners and International Protection. Normally, in order to make a short-term residence permit application, the foreigner shall enter Turkey with a valid visa, or by benefitting from a visa exemption. Following valid entry to Turkey, foreigners who wish to extend their stay in Turkey, shall apply for a 'short-term residence permit'. For regular short-term residence permit application process the waiting period for an appointment/interview date at many popular districts (such as Istanbul, Izmir, Ankara) is quite long (8 to 24 weeks). However, in such citizenship by investment based special short-term applications, application can be finalized within 1 to 10 days after making online application. Application procedures are carried out in the special office of the Immigration Directorate in Istanbul and Ankara. If foreigners issue a special power of attorney for handling the short-term residence permit application, foreigners will not require to enter into Turkey before making an application and application process can be handled remotely via PoA's.

The residence permits granted within the scope of subparagraph (j) the Article 31 of the Law No. 6458, can be issued up to five (5) years but generally applied and granted for one (1) year. The term is dependent on the validity term of the passport and the health insurance policy term obtained.

The residence permit cards are mailed to the residence address of the foreigner in Turkey, which is specified in the online application, within 2-4 weeks.

2.2.Required documents for Short-Term Residence Permit as per to Article 31/1-j of the Law No. 6458

  • Valid visa or non-expired exemption term following entry at the date of application
  • Valid Passport (with enough validity for the residence term to be applied for)
  • Four (4) passport type pictures in color.
  • Private health insurance (it shall be obtained in Turkey and the insurance period must cover the intended residence permit duration applied for). The costs are between €250.- to €500.- including taxes and expenses depending on foreign investor's age, health etc.
  • Address information [A residence address of foreigner in Turkey is required during the online application. A hotel address declaration may be enough at initial application however, foreigner may also submit his/her notarized lease agreement (if any) or the address of the workplace. The declared residence address is important since the original short-term residence permit card shall be mailed to such address]
  • Conformity certificate pursuant to investment type
  • Bank receipt of the fees and card fees paid (Fees and card fees vary according to the nationality of the foreigner)
  • (Optional) PoA (Power of Attorney) to authorize professional assistance for handling procedures
  1. Turkish Citizenship Application Through Investment

3.1.Procedures and Principles for Turkish Citizenship Application

Foreign investors who obtained conformity certificates pursuant to investment type and obtained short-term residence permit pursuant to Article 31/1(j) of the Law No.6458, shall make Turkish citizenship application at the special office of the Immigration Office in Istanbul and Ankara.

Having noted with the foregoing, in case the applicant wishes to extend the citizenship to his/her immediate family (spouse and under 18 children), it is possible without any requirement for the other family members to obtain the short-term residence or making any additional investment. There will only be need for some additional personal documents (ID – passport documents, birth certificate, a document which shows marital status, pictures etc.) for such additional family members to benefit from the citizenship application.

3.2.Required Documents for Application

  • Application Form (a standard form VAT-4)
  • Valid passport and it's notarized Turkish translation
  • Two (2) passport type pictures in color.
  • The Identity Registry of foreign investor, obtained from home country of foreigner with apostille verification or verification of Turkish Consulate and it's notarized Turkish translation
  • The Birth Certificate of foreign investor, obtained from home country of foreigner with apostille verification or verification of Turkish Consulate and it's notarized Turkish translation]
  • The Marital Status Certificate/ Document showing that foreign investor is single, married, divorce or widow, obtained from home country of foreigner with apostille verification or verification of Turkish Consulate and it's notarized Turkish translation. In addition to this document:
  • If foreign investor is married, Marriage Certificate and Identity Registry Copy of the spouse and children, obtained from the home country foreigner with apostille verification or verification of Turkish Consulate and their notarized Turkish translation
  • If foreign investor is divorced, Divorce Certificate/Decree obtained from the home country of foreigner with apostille verification or verification of Turkish Consulate and its notarized Turkish translation
  • If foreign investor is widow, a Death Certificate regarding his/her spouse obtained from the home country foreigner with apostille verification or verification of Turkish Consulate and it's notarized Turkish translation.
  • In case Turkish citizenship application will be made for the child under the age of 18 who is under the custody of the applicant, the consent of the other spouse obtained from the competent authority in home country of the spouse with apostille verification or verification of Turkish Consulate and it's notarized Turkish translation.
  • A receipt showing that the service fee has been deposited in the pay-office of Ministry of Treasury and Finance. (The service fee was determined as TRL 15,00.- for each person in 2019.)

Furthermore, please also note that foreigner who applies to Turkish citizenship by way of investment has also a right to pick up a new 'Turkish' name and/or surname (last name). In such a case, the foreigner's Turkish ID and/or passport will be issued with such preferred name and last name. This procedure is not mandatory, and foreigners may also use their current names for their Turkish ID's and passports as well.

3.3.Finalization of the Turkish Citizenship Application

A commission is formed by the relevant ministries, the citizenship application of foreigners is evaluated and submitted to the approval of the President. The final decision is made by the President.

The application process including obtaining certificate of conformity, short-term residence permit, receiving residence permit card and submitting all information and documents regarding citizenship can be handled remotely via special power of attorney without need for foreigners to enter to Turkey. However, in the last stage of the application, the applicant and his/her immediate family (spouse and children under 18) shall provide their fingerprints in order to obtain Turkish ID and/or Turkish passport.

Although there is no official regulation or confirmation, applications for short term residency permits are resolved within two (2) to three (3) weeks and citizenship applications are shall be resolved within three (3) to six (6) months.

  1. Important Note

Although Turkey has eased the procedure for citizenship by investment, it is important to comply with the procedure giving attention to details. Mistakes or deficiencies in the application process may result in delays or rejections. As ADMD, we offer turn-key legal support by our expert associates to assist our clients to achieve their targets.

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.

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