With the amendments made to the Capital Movements Circular dated 2 May 2018 ("Circular") with the correspondence from the Ministry of Treasury and Finance of the Republic of Turkey, dated 12.05.2025, certain regulations concerning the financial transactions of residents in Turkey abroad and the issuance of non-cash loans have been updated.
Article 11 of the Circular maintains the freedom that allows residents in Turkey to buy and sell securities and other capital market instruments traded on foreign financial markets through banks and intermediary institutions authorized according to capital market regulations, and to carry out the fund transfers related to these transactions via banks. Additionally, an exemption has been introduced regarding the requirement for residents in Turkey to use an intermediary institution or bank for derivative transactions conducted entirely at their own discretion with foreign financial institutions. However, it has been stipulated that the transfer of funds related to these transactions must be carried out through banks.
Additionally, the provision in Article 6 of Decision No. 32 on the Protection of the Value of the Turkish Currency, which states that leveraged transactions and similar derivative instruments can only be carried out through banks and intermediary institutions authorized by the Capital Markets Board, and that such transactions cannot be conducted through unauthorized persons, nor can funds be transferred abroad in relation to these transactions, has been codified in the third paragraph of Article 11 of the Circular.
With the amendments made to Article 49 of the Circular, the heading has been updated to "Provision of Non-Cash Loans by Residents in Turkey," and the scope of the regulation has been expanded to cover not only non-cash loans provided from abroad but also all non-cash loans provided by residents in Turkey.
The requirement for Turkish residents to involve a Turkish counterparty for non-cash loans, guarantees, and sureties provided from abroad, and the use of these non-cash loans without the involvement of banks, has been removed, thus expanding the scope of the freedom.
With the introduced amendments, residents in Turkey are now allowed to issue letters of guarantee, provide guarantees, and offer sureties to foreign parties, both within Turkey and abroad.
Additionally, residents in Turkey are now allowed to provide guarantees and sureties for loans obtained domestically in foreign currency or precious metals, with Turkish banks and financial institutions acting as the counterpart.
The amendment entered into force on 12 May 2025. You may access the text of the amendment here.
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.
