This memorandum is in reference to the new legal regime set forth by Amendment (“Amendment), dated September 19, 2018 and numbered 106, effectuated on the Regulation on Implementation of the Code of Turkish Nationality (“Regulation”).
Within the scope of this memorandum, the Amendment, the Regulation, the Code of Turkish Nationality (“Code”), numbered 5901, and the Code on Foreigners and International Protection, numbered 6458, are studied so as to understand (i) the terms and conditions set forth in relation to the eligibility for naturalization through investment in property in Turkey, (ii) the status of immediate family of candidates for naturalization, (iii) whether the new arrangement is applicable retrospectively, i.e. if foreigners who had already happened to fit into the eligibility criteria prior to the effective date of the Amendment could enjoy the rights granted by the new arrangement, and (iv) what the approach of Turkish legislation with regards to dual/multiple citizenship is.
The new regime allows foreign investors who
- has made a fixed capital investment at least USD 500.000 or equivalent foreign currency or equivalent amount of Turkish Lira and for whom certificate of conformity is issued by the Ministry of Industry and Technology; or
- has purchased the immovable property at least USD 250.000 or equivalent foreign currency or equivalent amount of Turkish Lira and attached annotation at land registration not to sell this property for three years and for whom a certificate of conformity is issued by the Ministry of Environment and Urbanization; or
- employ at least 50 employees and for whom a certificate of conformity is issued by the Ministry of Family, Labor and Social Services; or
- has deposited at least USD 500.000,00 or its equivalent in foreign currency or equivalent amount of Turkish Lira as a bank deposit so as to be kept for 3 years which is to be certified by the Banking Regulation and Supervision Agency; or
- has invested in public borrowing instruments at least USD 500.000 or equivalent foreign currency or equivalent amount of Turkish Lira and make commitment to hold these instruments for three years and for whom certificate of conformity is issued by the Ministry of Treasury and Finance,
- has invested in a real estate investment fund participation share or venture capital investment fund participation amount of at least USD 500.000 or equivalent foreign currency or equivalent amount of Turkish Lira and make commitment to hold these participation shares for three-years and for whom a certificate of conformity is issued by the Capital Market Board
to apply for the Turkish citizenship through the Ministry of Domestic Affairs and the affirmative resolution of the Council of Ministers.
ELIGABILITY FOR CITIZENSHIP THROUGH INVESTMENT IN PROPERTY
- Qualification. Acquisition of real estate with a minimum total value of USD 250,000.00 to be held for at least 3 years qualifies a foreign investor as eligible to apply for the Turkish citizenship through naturalization by the affirmative resolution of the Council of Ministers on naturalization of such foreign investor.
- Immediate Family. According to the Article 12 (b) of the Code and the Article 31 (j) of the Code on Foreigners and International Protection the minor and/or dependent children, and the spouse of a foreign investor is eligible for citizenship through naturalization as well.
- Timing of Investment. Investors who had already invested in Turkey prior to the enactment of the Amendment in parallel to the standards set forth by the Amendment should also be eligible candidates for naturalization procedures having their investments certified as stipulated under the Article 1/2 of the Amendment.
- Dual/Multiple Citizenship. Turkish legislation allows dual/multiple citizenship, therefore, an investor applying for the Turkish citizenship would not need to give up his or her current citizenship(s).
- VAT Exemption. According to the article 13 of the Value Added Tax Law, first hand purchase of the real property from the developers by non-resident foreigners or foreign legal entities, which do not generate revenue in Turkey through their liaison offices or permanent agents, or Turkish citizens who are living outside of Turkey with a resident or work permit for the period longer than 6 months (except for the Turkish citizens who are living outside of Turkey because of their works in the governmental agencies and companies whose headquarters are located in Turkey) shall be exempted from VAT provided that such purchase price is brought in Turkey in foreign currency. In case that the purchased real property is sold within 1 year after the VAT exemption, the uncollected VAT and its deferment interest rate shall be paid before the title deed transactions, by the owner that wishes to sell. The VAT exemption will be come into force and applicable on 1 April 2017.