Turkish Law Blog
The Most Recent Developments about Turkish Citizenship through Investment Laws
As it is known, with the new amendments in the regulations enacted on September 19, Turkish government had reduced the minimum limit of required investments for foreigners to acquire Turkish citizenship. With these amendments, the thresholds of the different investment types to acquire citizenship dropped to one fourth or one sixth of the previous minimum limits. It is important to note that whoever wants to benefit from the opportunities of the recent amendments have to do new investments. Any investment before 19.09.2018 is currently not under the scope of the recent amendments.
- The threshold for acquiring citizenship by investing in real estate has been lowered from USD 1,000,000 to USD 250,000. The investment may not be transferred or withdrawn for a period of 3 years.
- The threshold for acquiring citizenship by depositing money into a Turkish bank account on condition that, the given amount shall not be withdrawn for at least 3 years, has been lowered from USD 3,000,000 to USD 500,000.
- The threshold for acquiring citizenship by virtue of employing Turkish citizens has been reduced from a minimum of 100 employees to minimum 50 employees.
- The threshold for acquiring citizenship by purchasing government bonds has been lowered from USD 3,000,000 to USD 500,000.
Also, for nearly 5 months following the amendments in the regulations enacted on September 19, the procedural details of the citizenship through investment applications have been clarified with some additional minor amendments. Thanks to these developments which were addressing the concerns of the foreign investors, some crucial uncertainties in the laws have been removed. Hence, the “wait-and-see attitude” of the foreign investors in the initial phase (until December 2019) could be reversed by the end of 2018 and currently, the demand and figures of foreign investment into real estate or other investment instruments are rapidly growing.
Foreign Demand for Real Estate in Turkey is up
The abovementioned amendments were enacted amid of Turkey’s rapidly growing demand for foreign capital inflow to the country; therefore there is a very positive attitude among the Turkish authorities and decision-makers towards the applicants. Such attitude does not only remove the procedural / bureaucratic hurdles for the foreign investors, also their application process is going on smoothly and accomplished as quick as possible.
For the time being, tens of applications for acquiring Turkish citizenship through investment are being done every week. The total amount of applications has already surmounted one thousand (1000).
According to the data of Turkish Statistical Institute, real estate sales to foreign investors have increased by 78,30 % in 2018 in comparison with the same figure in 2017. There is no doubt; the main factor behind this impressive rise in sales is the recent Turkish citizenship through investment laws.
Only in Istanbul, which is the most preferable destination for the foreign investors, almost fifteen thousand (15.000) residences have been purchased by foreigners. After Istanbul; Antalya, Bursa, Ankara and Yalova seem to be other top destinations for real estate investment. For example, the increase in the real estate sales is above 90 % in Yalova.
The profile of foreign investors is also very diverse. While the greatest portion of the foreign investors are from the Middle Eastern countries such as Qatar, Iraq, Egypt, Iran, Saudi Arabia, Yemen and Kuwait, the foreigners from other countries seem also highly interested. For example, the Russians have bought more than three thousand (3000) residences in 2018.
Why to Invest in Turkey?
There are various reasons for rapidly growing demand for the Turkish citizenship through investment opportunity. We will try to summarize these points briefly:
- Due to the current economic situation in Turkey and the loss in the value of Turkish lira, real estate prices have dropped sharply. This situation offers the foreign investors extremely feasible and reasonable investment opportunities. At the moment, it is possible to purchase big facilities, hotels, hospitals, oil stations or luxury residences without spending huge budgets.
- There is no specific type(s) of real estates for investment mentioned in the regulations. That is to say that the foreign investors are free to choose something among the wide spectrum of options such as residences, lands, commercial buildings and so on.
- A citizenship application through real estate investment could be processed without investors presenting their document of title anymore. The sale contract will be suﬃ Thus, investors are now able to invest in real estate “off plan” and in projects still under development, which trade significantly discounted prices, presenting cost efficient options for investors.
- It is possible to buy real estates with on installments, even though there are also some new provisions which are bringing new restrictions on the property sale on installments.
- The core family members of the foreign investor are granted the right to acquire Turkish citizenship along with the investor. Only exception is the kids of investor who are above 18 years old.
- Due to its rapidly growing economy, young population, qualified workforce, geographical and geopolitical position, Turkey is a good destination for the investors who consider to set up a business / enterprise there. Turkey also has mature foreign investment and trade laws, fostering a favorable environment for enterprises based in Turkey to cost effectively and seamlessly scale operations across global markets.
- Same as the Turkish nationals, foreign direct investments into Turkey are able to benefit from all incentive packages and subsidy schemes offered by the Turkish government.
As conclusion, Turkish government’s recent step to ease the requirements for foreign investors to acquire Turkish citizenship seems to have sparked interest among especially Arab investors. The growing interest demonstrates that Turkey is still seen as “safe haven” in the eyes of many foreigners. The current statistics of Turkish citizenship through investment applications and real estate sales seem very promising. In 2019, we might experience a boom in real estate sales to foreigners.