What Does the Regulation Made in the Law on Turkish Citizenship by Investment Mean?
According to the decision published in the Official Gazette; A change was made in the regulation on the admission of foreign nationals to Turkish citizenship by meeting some conditions.
There are two methods most preferred by foreigners to become Turkish citizens;
- Buying a house for $400.000
- Depositing $500.000 in the bank
Real Estate Purchase Worth 400 Thousand Dollars
In the previous version of the law, foreign investors could make their payments in foreign currency when purchasing real estate. In this way, the problems caused by the difference in the payment exchange rate were prevented. With the new regulation;
- The foreigner will deposit his money in foreign currency in the bank,
- The bank will sell the foreign currency it receives to the Central Bank.
- The payment of the real estate will be realized with the Turkish Lira coming from the Central Bank.
It will cause the central bank to collect cheap foreign currency and will reduce the supply of dollars in the market.
Some foreign investors will suffer due to the sudden exchange rate change in Turkey. Investor’s costs will increase due to the difference in spreads between foreign exchange buying and selling.
Deposit of 500 Thousand Dollars in Turkish Banks
Before the arrangement, the investor who wanted to be a Turkish citizen could deposit 500.000 USD directly in hand or by wire transfer to the bank (usually Ziraat Bank). After the bank officials reported this account to the BRSA, the BRSA issued a “certificate of conformity” within a week, paving the way for the foreigner to apply for Turkish citizenship. Now is;
- The foreigner will deposit his money in foreign currency in the bank.
- The bank will sell the currency to the Central bank
- An account will be opened to the foreigner regarding the condition of not withdrawing in Turkish Lira for 3 years.
Foreigners who do not want to deposit 500,000 USD in the bank and get it back in Turkish Lira will tend to buy real estate. Demand for this citizenship model, which has no benefit to the economy, will be reduced.
Foreigners who do not plan to buy real estate due to the situation of Turkish Lira against foreign currency will cause them to give up citizenship application. Foreign currencies kept under the pillow will not be included in the banking system. The demand for the Turkish citizenship program will decrease by 20% – 30% on average.
How to Apply for Citizenship?
The first way to apply for Turkish citizenship is to obtain a “certificate of conformity”. The foreigner who bought real estate obtained a certificate of conformity from the General Directorate of Land Registry and Cadastre, and the foreigner who opened a deposit account received a certificate of conformity from the Ministry of Treasury and Finance. The new regulation regulates these institutions to form a joint formation and issue a certificate of conformity from a single source.