Turkey is Modifying its Citizenship By Investment Rules

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Turkey is Modifying its Citizenship By Investment Rules

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Turkey is updating its Citizenship By Investment regulations in an attempt to support its local currency.

The updates give citizenship to foreigners if they invest a set amount into either real estate or government bonds.

Turkey Citizenship can be acquired by foreigners if their property value is worth $250,000 minimum. They must hold the property for 3 years to continue qualifying.

Another path allows for a $500,000 minimum investment, also to be held for 3 years.

Thus, the minimum investment required to get citizenship is now being defined as a US dollar equivalent of the foreigner’s currency.

How Turkey Plans to Support the Lira

Turkey’s new legislation forces money to be stored as lira deposits, or through official debt instruments, with the value staying in-country for three years minimum.

The foreign currency gained from the investments is to be sold to Turkey’s central bank using a local bank, and before conversion to lira.

If applicants choose the $500,000 route, the money they keep for investment in their banks is also set to be converted.

Attempting to Recover the Lira

The regulatory update is attempting to correct a sharp drop in the lira’s value.

This occurred after Turkey’s central bank slashed its policy rates by 500 points, dropping it from 19 to 14% since September.

The lira registered a new low of 18.4 per US dollar in December – with a rebound shortly after its government announced a deposit system as compensation for depreciation losses during their deposit term.

The announcement seems to be motivated by a desire to stop and reverse the current dollarized trend in Turkey. This seems to be the opinion of Turkey’s Real Estate International Promotion Association an organization that exports $19 million of real estate daily.

With that, the association sees that application will be difficult.

Otherwise, foreign investors with Turkish lira ownership will lack obstacles when misusing the current laws. And it seems related to a lack of guidelines as to how the investments will be made.

Who is the Program Targeting?

Prime targets seem to be foreigners who can invest the minimum of $500,000 in the country, or opt for $250,000 in the property.

Those eligible to receive citizenship will be determined first by Turkey’s Industry and Technology Ministry.

Other targeted demographics include those who can employ 50 people minimum, as determined by the Ministry of Labor and Social Security. Requirements for that category include:

  • Depositing $500,000 minimum in Turkish banks
  • Purchasing $500,000 of government debt
  • Investing in property funds or venture capital worth $500,000 minimum

All three pathways are required to keep their investments for the three-year timeframe.

A foreign home purchase has been another of Turkey’s CIB programs. Since 2017, Turkish individuals could gain citizenship by buying homes for $250,000.

Over 7000 foreigners have gained citizenship through that pathway – with most home sales going to Afghans, Russians, Iraqis, and Iranians.

All-time highs were registered past November, though this seems to be the result of the large depreciation in lira values, making it an attractive buy for foreigners.

In fact, sales had risen by 48.4% past November compared to last year. And sales in 2021 showed a 39.4% rise throughout the first eleven months.

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