Turkey attracts investors with new CBI program and lowered investment amounts

By Baris Erkan Celebi 

Turkey is one of the fastest growing economies in Europe with its foreign trade volume exceeding $391 billion annually. From 1999 until 2019, GDP Annual Growth Rate in Turkey2 averaged 4.64 %. Turkey’s biggest trade partners are Germany, Russia, the United Kingdom, UAE, China, France and the Netherlands respectively. With Germany alone, Turkey’s trade volume reaches over $21.3 billion in import and $15.1 billion in export. In the midst of this economic boom, Turkey has been passing laws that encourage foreign investments more and more every year. 

In 2003, Turkey introduced the Law on Foreigners’ Work Permits, regulating work permits in a more accessible way for foreigners. In 2016, this law was replaced by the International Labor Law, which regulated foreigners’ work permits in compliance with the European Union standards.  

In 2003, Turkey also introduced the Direct Foreign Investments Law, thereby adopting a completely liberal approach to foreign investors and immigration. Foreigners may now be investors and shareholders in companies incorporated in Turkey just as easily as Turkish citizens. In fact, the Law emphasizes the equality between Turkish and foreign investors. 

THE LAUNCH OF TURKEY’S CBI PROGRAM 

In addition to these new developments to encourage foreign investments and immigration, Turkey introduced the most significant incentive for foreign investments in January of 2017: its citizenship-by-investment program. The law allowed citizenship applications with a $1 million investment. 

In September of 2018, a Turkish Presidential Order introduced critical changes to the Regulation on the Application of Turkish Citizenship Law. The required minimum investment figures were drastically brought down for applying for Turkish citizenship. Foreigners who purchase a residential property worth at least $250,000 or invest at least $500,000 into a business are now entitled to apply for Turkish citizenship. 

However, there are some conditions. The $250,000 real estate must be purchased from a Turkish citizen and can’t have had a foreign owner in its recent history. If the buyer wishes to apply for citizenship together with his/her family, the real estate must be worth at least $250,000 per applicant. These values must be assessed by a licensed surveyor who will issue a survey report. The buyer must also register a pledge in the land registry, promising that he/she will not sell the real estate for at least 3 years. The real estate’s value and eligibility must also be approved by the Land Registry General Directorate. 

The application process and relevant paperwork can be quite complicated, so the process should be diligently handled by an attorney who specializes in immigration and citizenship law. 

OTHER OPTIONS TO GAIN CITIZENSHIP 

An alternative way to obtain Turkish citizenship is by residing in Turkey continuously for at least 5 years for a purpose other than tourism or academics. Another way is to be married to a Turkish citizen for at least 3 years. The spouse of the applicant who obtains citizenship by investment may also use this option and apply for citizenship in 3 years. 

Turkey’s liberal approach to foreigners is not only limited to investors. Aside from citizenship and investment opportunities, short term residence permits for 1 or 2 years are also granted to any foreigner who duly applies and procures the required documents. In order to apply, a foreigner must either purchase a property or sign a notarized lease contract for the period of the residence term. 

The tourism industry is also on a steady incline since 2015. In 2018, Istanbul and Antalya were the most visited cities in Europe after London and Paris. Antalya alone exceeded 10 million foreign visitors in 2018, leading to more investment opportunities and more immigration from Europe, Russia and Middle East.  In 2018 alone, Russian tourists visiting Turkey increased by 1.7 million and reached the whopping figure of 6.4 million4. These record numbers are followed by 4.2 million German tourists and 2.2 million British tourists visiting Turkey in 2018. 

Evidently, increasing demand from foreign tourists and the new investment opportunities are shaping the way the Turkish government has regulated foreigners’ rights. The more visits and investments that are made into Turkey, the more foreigner-friendly the law seem to become. This provides broader opportunities and incentive for foreign investments. Time will show if more incentives and liberal changes will follow.

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