The Regulation Amending (“Amendment Regulation”) the Regulation on the Implementation of the Turkish Citizenship (“Regulation”) Law No. 5901 (“Law”) was published in the Official Gazette dated 06 January 2022 and numbered 31711. The previous and amended versions of the Regulation, together with the amendments, are in the attached table. The novelties as per the Amendment Regulation are briefly summarized below:
- The Amendment Regulation provides that the investment to be made under the Law shall be 500,000 USD or any corresponding foreign currency. Thus, the expression of “corresponding Turkish Lira” in the previous regulation was abolished and it has been established that all investments under this legislation should be in foreign currency.
- With the Amendment Regulation, it has been determined that the foreign currency amounts specified in subparagraphs (b), (ç), (d), and (e) of the second paragraph of Article 20 of the Regulation shall be sold to a bank operating in Turkey and to the Central Bank of the Republic of Turkey by this bank prior the transaction.
- As a result of the sale; Turkish Lira amounts obtained pursuant to subparagraph 2/(ç) of Article 20 shall be kept in Turkish Lira deposits, and Turkish Lira amounts obtained pursuant to subparagraph (d) of paragraph 2 shall be kept in Turkish Lira State debt instruments for a period of three years.
- In sum, the amendment regulates those investments that will provide Turkish citizenship to foreigners should only be made in foreign currency. We are of the opinion that it is planned to increase the demand for the local currency with the requirement to convert foreign currency amounts into Turkish Lira before the transaction. Although detailed regulations will be determined by the Central Bank as the final buyer of the foreign currency amounts in the future, it is understood that the Central Bank aims to increase its foreign currency reserves via this amendment.