NEW RULES FOR ACQUISITION OF TURKISH CITIZENSHIP THROUGH INVESTMENT
The “Regulation Amending the Regulation on the Implementation of the Turkish Citizenship Law” (“Regulation Amendment”), which was published in the Official Gazette dated 06.01.2022 and numbered 31711, introduced fundamental changes to the Regulation on the Implementation of the Turkish Citizenship Law (“Regulation”). In this study, the said Regulation Amendment, which brings amendments to Article 20 of the Regulation regarding the exceptional acquisition of citizenship through investment, will be discussed under the headings of the first provisions on the matter in the Regulation, before the Regulation Amendment and the new Regulation Amendment.
1. The First Provisions on the Matter in the Regulation
The acquisition of Turkish citizenship by foreigners by investing a certain amount was first brought with the Council of Ministers Decision dated 12.12.2016 and numbered 2016/9601. With the said amendment, it is regulated that exceptional acquisition of Turkish citizenship will be applied for the persons listed in Article 12/1-b of the Turkish Citizenship Law.
Accordingly, provided that there is no obstacle in terms of national security and public order and the conditions specified in Article 20/2 of the Regulation are met, those who obtain a residence permit under Article 31/1-j of the Law on Foreigners and International Protection No. 6458 [1], Turquoise Cardholders and their foreign spouse, minor or dependent foreign child of himself and his spouse will be able to acquire Turkish citizenship by the Presidency’s decision.
With the amendment made with Presidential Decision No. 106 published in the Official Gazette dated 19.09.2018 and numbered 30540, the numerical limits determined in 2016 for capital and real estate investments and employment were significantly reduced, and meeting the prerequisites of being Turkish citizenship was significantly facilitated.
2. Before the Regulation Amendment
Before the New Regulation Amendment, foreigners who fulfilled any of the following conditions could acquire Turkish citizenship according to Article 20/2 of the Regulation.
a) Fixed Capital Investment:
A foreign investor, confirmed by the Ministry of Industry and Technology, to have made a fixed capital investment of minimum at least 500.000 USD or equivalent in foreign currency or Turkish lira can acquire citizenship.
b) Investment in Real Estate:
A foreign investor, confirmed by the Ministry of Environment and Urbanization, to have purchased real estate worth at least 250.000 USD or equivalent in foreign currency or its equivalent in Turkish Lira, provided that an annotation is put in the land registry that it will not be sold for three years, can acquire citizenship. Besides, a foreign investor, determined by the Ministry of Environment and Urbanization, whose contract issued by the notary public for the promise of the sale of the immovable property for which property ownership or construction servitude has been established and for which at least 250.000 USD or its equivalent in foreign currency or its equivalent in Turkish Lira has been deposited, provided that it has been annotated in the land registry with the commitment that it will not be transferred or cancelled for a period of three years, can also acquire citizenship.
c) Providing Employment:
A foreign investor, confirmed by the Ministry of Family, Labour and Social Services, to have provided employment for minimum 50 persons can acquire citizenship.
ç) Investing in Banks: Opening Deposit Accounts
Foreign investors that have been confirmed by the Banking Regulation and Supervision Agency of having deposited an amount of minimum 500.000 USD or equivalent foreign currency or Turkish lira deposits in banks operating in Turkey, provided that they are kept for three years, have been determined suitable for obtaining Turkish citizenship.
d) Investing in Government Debt Instruments
A foreign investor, confirmed by the Ministry of Treasury and Finance, to have purchased government debt instruments worth at least 500,000 USD or equivalent in foreign currency or Turkish lira, provided that they are kept for three years, can acquire citizenship.
e) Investing in Shares of Real Estate Investment Fund or Venture Capital Investment Fund
Foreign investors that have been confirmed by the Capital Markets Board of having purchased a share of real estate investment fund or venture capital investment fund of at least 500,000 USD or equivalent in foreign currency or Turkish lira, on the condition that they hold for at least three years.
As it is seen, the monetary amounts for the investment types foreseen for the exceptional acquisition of Turkish citizenship were determined in US Dollars, but it was possible to bring the said investment amounts to the country in a foreign currency type other than US Dollars or Turkish Lira.
3. New Regulation Amendment
With the Regulation Amendment, “or equivalent Turkish Lira” phrase in Article 20/2 of the Regulation has been removed. So, foreign investors who want to acquire Turkish citizenship must invest in a foreign currency.
With the Regulation Amendment, it has been envisaged that the procedures and principles to be applied in determining whether the investment conditions within the scope and amount specified in the relevant legislation are met, according to the investment types determined in Article 20/2 of the Regulation, will be determined by the institutions making the said determination. In this framework, the relevant procedures and principles will be determined by the Ministry of Industry and Technology, the Ministry of Environment, Urbanization and Climate Change, the Ministry of Labour and Social Security, the Banking Regulation and Supervision Agency, the Ministry of Treasury and Finance and the Capital Markets Board.
Again, the foreign currency amounts in the investment types specified for investment in real estate, investing in banks by opening deposit accounts, investing in government debt instruments and investing in shares of real estate investment fund or venture capital investment fund will be sold to a bank operating in Turkey. Subsequently relevant bank is obliged to exchange the foreign currency to the Central Bank of the Republic of Turkey before the transaction. In this framework, foreigners who want to acquire Turkish citizenship with these investment types are obliged to exchange the relevant foreign currency amount to Turkish Lira by selling it to a bank operating in Turkey before the transaction. The obligation of the relevant bank has been determined as to ensure the sale of the said amount of foreign currency to the Central Bank of the Republic of Turkey.
On the other hand, the additional requirements regarding not transferring the real estate invested for a period of 3 years for investment in real estate, keeping the deposit in a bank operating in Turkey for 3 years for investment in banks, keeping the government debt instruments invested 3 years for investment in government debt instruments, keeping the share of real estate investment fund or venture capital investment fund for at least 3 years are also present in the previous version of the Regulation and have been preserved in the new Regulation Amendment.
In addition, according to the Regulation Amendment, the Turkish Lira amounts obtained due to the bank deposit investment type and the Turkish Lira amounts obtained in terms of the investment type of the Government debt instruments will be kept in Turkish Lira deposits and Turkish Lira in the Government debt instruments respectively. The principles regarding the implementation of this subject will be determined by the Central Bank of the Republic of Turkey.
As a result;
The Regulation Amendment stipulates that the investments envisaged to be made to acquire Turkish citizenship exceptionally can be made in US Dollars or equivalent foreign currency, and from now on, foreigners will only be able to invest in foreign currency to qualify for Turkish citizenship within the scope of capital and real estate investments. Investing in the Turkish Lira will not be enough to acquire Turkish citizenship.
After the procedures and principles to be applied on whether the investment conditions are met concerning the scope and amount specified in the relevant legislation are determined by the relevant institutions according to the investment types and the implementation principles for the conversion of foreign currency amounts to Turkish Lira and keeping them in Turkish Lira is determined by the Central Bank of the Republic of Turkey, the regulations brought by the Regulation Amendment will gain clarity in terms of implementation.
[1] Article 31 of the Law No. 6458 is about “short-term residence permit” and subparagraph (j) states “Those who do not work in Turkey but will invest within the scope and amount to be determined by the President, and their foreign spouses, minors or dependent foreign child of himself and his spouse”.
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