By Moustafa Daly
Turkey’s citizenship-by-investment program, which was launched in 2017, has recently witnessed an uptick in popularity particularly among Russian and Ukrainian individuals.
One of the shortest routes to citizenship-by-investment in Turkey is by purchase of real estate property. Up until May 2022, the minimum investment threshold was set at $250,000. On May 13, it was hiked to $400,000. The process, however, remained unchanged, and investors could be eligible for citizenship if they purchase multiple properties as long as the total price added up to or exceeded $400,000 – but that has changed.
In an announcement, Turkey’s General Directorate of Land Registry introduced new mandatory guidelines that will end the possibility of combining different properties on a single notary contract.
“It has been stipulated those transactions based on the promise of the sale of immovable property have to be made with a single contract as of January 1, 2023,” said Orhan Yavuz Mavioglu, managing partner of Istanbul-based ADMD Law Firm, to Uglobal.
“In this context, in the event that preliminary sales agreements are signed for more than one immovable, citizenship application shall not be possible even if the total value exceeds USD 400,000. Immovable assets purchased with a real estate sales preliminary sales agreement cannot be used together with another immovable to complete the USD 400,000 consideration.”
However, professionals in Turkey don’t expect the changes to shake up the Turkish CBI model in any drastic manner.
“I think that the changes made in the Turkish citizenship by investment program are not fundamental changes,” said Arslan Tenha, founder of Tenha Law Firm.
“The modified option was not a highly preferred option anyway. Acquisition of citizenship through real estate investment was and still is possible with a preliminary notary contract for a real estate sale,” he added.
More changes to investing in shares or by loans in Turkey
The new instructions also stipulate that “It is not possible to apply for citizenship with the acquisition of immovable property (real estate) in shares,” read the new government guidelines, translated by the legal team at ADMD Law Firm.
“For example, if an immovable property is acquired by more than one foreign person in the form of shared ownership, this immovable property cannot be subject to citizenship, whereas if an immovable property registered in the name of more than one person is acquired by a foreign person, this immovable property can be subject to citizenship.”
“For example, even if two foreigners acquire an immovable property worth $900,000 in equal shares, they will not be able to apply for citizenship,” explained Mavioglu. “Only one foreigner can be the owner, and only the foreign owner can apply for citizenship.”
For investors seeking citizenship by investments that are obtained by using foreign-currency loans, it will now only be acceptable if the amount of the loan minus the property sales price amounts to $400,000 or more.
“I conclude that the changes will not adversely affect the Turkish citizenship program by investment,” said Tenha.
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