Turkey

Turkey may not be at the top of the list for many potential investors looking at obtaining multiple citizenship. However, the European and Central Asian country is a shining light and a powerhouse in the region.

In this guide, I’ll outline all one needs to know to make an informed decision when it comes to citizenship by investment in Turkey.

Brief Insight into the Turkish Citizenship Program

In mid-2019, the investment threshold was reduced to $250,000 for real estate after releasing the initial cost was not going to be successful. The foreign capital investing in real estate in Turkey spiked for the next three years. The Government increased the minimum investment for real estate to $400,000.

Investors must hold the property for at least three years and meet other requirements. It is an attractive option for foreign nationals looking to diversify their asset portfolio into global markets while gaining a second passport.

The Turkish Government actively encourages foreign investors by removing barriers and offering incentives. The citizenship by investment program further stimulates the economy when foreign capital acquires real estate.

Investment Criteria

Although buying property is the top investment route to acquire Turkish citizenship, there are several potential investment opportunities to become a citizen.

Capital Transfer

Four types of capital transfer make a foreign investor eligible to obtain citizenship if the real estate or land registry route differs from your cup of tea.

The investment amount is $500,000 for each type of capital transfer or business investment.

• $500,000 deposit into a Turkish bank;
• $500,000 investment into a fixed capital contribution;
• $500,000 investment in shares in Turkish Government Bonds, Real Estate Investment Fund or Venture Capital or Funds; or
• $500,000 was committed to a private pension fund.

Real estate investments are the most attractive option.

Investment in Real Estate

A foreign investor needs to invest at least $400,000 into real estate in Turkey. Banking regulations require that the final currency for the property investment must be in Turkish Liras.

The land registry office no longer allows combining more than one real estate property to meet the minimum investment requirement. The investment has to fall under one single contract.

Lastly, investors must receive a certificate of eligibility from the relevant authorities before submitting a citizenship application.

Types of Real Estate Investments

First and foremost, there are no restrictions on the types of real estate you may purchase, making the process very simple for investors. The investor will physically hold the title deed to the real estate, a true differentiator from other real estate investment programs.

There are no restrictions on the type of real estate eligible under the program. From a single apartment to an apartment building, villa, or commercial real estate. All fall under the approval for citizenship by investment.

In US dollar terms, there are steady increases in prices in major cities. Buying is only for some, and renting can be cost-effective for expats, including Americans in Turkey.

Proof of Ownership and Investment Duration

Proof of ownership is a critical component of the citizenship process and one our team can assist with. The official title deed will be issued after buying the property to the new foreign owner, stipulating that they cannot resell the asset within three years.

After the applicants acquire real estate, they must obtain the Certificate of Eligibility for investment in Turkey to receive citizenship. The certificate, which falls under real estate, can be obtained from the Turkish Land Registry and Cadaster of the Ministry of Environment and Urbanization.

The Process from Citizenship Application to Passport Issuance

The process to applying for citizenship through real estate investment is relatively straightforward, with some areas of caution.

To start the process, the primary investor needs:

• To be at least eighteen years old;
• Must have never stayed illegally in Turkey; and
• You must pay the taxes, fees, and costs for the process.

There are several steps before making a citizenship application. The step-by-step process is relatively straightforward as long as they are meticulously followed.

1. Obtain a Turkish Tax ID number. With a tax ID, the legal system can allow you to purchase a property. Once you have the tax number, open a bank account in the country. Our experienced team will guide you through the process;
2. Decide on your investment route. If real estate is your primary option, working with an agent on the ground is critical to ensuring a smooth transaction. Negotiating the final price and working with lawyers to ensure that you can acquire real estate with the legal transfer of the deed;
3. After completing the transfer of funds. The General Directorate of Land Registry and Cadaster of the Ministry of Environment and Urbanization approves the Land Certificate;
4. To apply for citizenship, investors first need to have a residence permit. The residence permit will be issued the same day you apply, and
5. The final step, literally the same day you have submitted your residency, is to submit all the paperwork needed for citizenship. The case file will be completed and checked by our professional team. The submission goes to the Provincial Directorate of Census and Citizenship.

The final process for naturalization takes a few months, following a due diligence process. Obtaining Turkish citizenship allows you to apply for a Turkish passport, which will take a few days to receive.

Due Diligence and Verification Process for Obtaining Turkish Citizenship

The list of documents is relatively typical for any residence or citizenship by investment program. The list below is not exhaustive but includes the vast majority of necessary documents:

• Birth certificates of all the applicants;
• Passports of investors and dependents;
• Proof of Residence in your country of residence (3-month utility statement);
• Biometrics, colored passport photos of each applicant;
• Police clearance from your country of residence to show a clean criminal record for due diligence;
• Proof of Health Insurance (valid in Turkey);
• Proof of investment; and
• Turkish Tax ID Number.

Dependent family members can include a spouse, dependent children below eighteen, and children of any age with disabilities can apply under the primary applicant.

There is no additional investment cost to include other family members. All adults applying for citizenship in Turkey must first obtain a residence permit and undergo due diligence.

The Pros and Cons of Becoming Turkish Citizens

Turkish citizenship is precious and is an incredible tool to have in a passport portfolio to improve your global mobility personally and for business.

Pros for Turkish Citizenship

Obtaining citizenship provides numerous benefits, such as visa-free travel to over 110 countries, the right to live, work, and study in Turkey, and the ability to pass down citizenship to future generations. There are no restrictions on dual citizenship, allowing you to keep your nationality.

Citizens will have access to the state’s public health services, including medical treatments, emergency care, and preventive care. Additionally, Turkey has incredibly high value for cosmetic surgery, with top surgeons attracting clients from all over the region.

The Government has tax and other business incentives for opening a company in Turkey. Research and Development companies operating in Turkey receive a 50% tax allowance on any profits.

Turkey is a well-respected and regional stronghold. Turkish citizens and passport holders enjoy many benefits in neighboring countries, including visa-free travel and access to conducting business, and meet many networks that might otherwise not be accessible.

Istanbul lies in Europe and Asia, making it a gateway between the East and the West. Millions of tourists visit the country yearly, appealing to real estate investors to acquire property and make returns from short-term rentals.

Potential Cons and Challenges

Of course, there are potential risks when investing close to half a million dollars into an emerging economy. The Turkish Lira is very volatile and depreciates against major currencies. The country is prone to inflation, creating uncertainty around future investment returns. However, the real estate market appreciates considerably in US Dollar terms, giving a good return on investment.

Property tax must be paid to the local council, and a stamp duty tax of around $14,000 when purchasing property valued at $400,000.

The last potential risk is that the investment property must be held for at least three years to retain citizenship. After the holding period, if conditions are not suitable, the assets can be challenging to sell in an illiquid market.

Added Global Benefits As a Turkish Citizen

Business Access into the United Kingdom and Europe

The Ankara Agreement is between Turkey and the European Economic Community (EEC). The agreement aimed to create a framework for economic cooperation between Turkey and the EEC, with the ultimate goal of Turkey’s eventual integration into the European Economic Community.

In addition to economic cooperation, the Ankara Agreement also provided for Turkish nationals to work and reside in EEC member states. This law is duly named the “Turkish ECAA (European Community Association) Agreement,” which provides a path for Turkish citizens to start a business or work in the UK.

Pathway to US Residence

Turkey is a treaty country with the United States, and Turkish citizens can apply for the E-2 Treaty Investor visa. The E-2 visa allows you to start a business to live and work in the US. The EB-5 is available to non-US Treaty countries, with a minimum investment of nearly $1 million. The E-2 investor visa does not have a minimum investment but typically is between $100,000 to $150,000.

The US requires applicants who have obtained citizenship by investment to be domiciled in the country of their application for at least three years if they obtained their citizenship by investment.

The Schengen Area For Turkish Passport Holders

The Schengen area and visa-free access for Turkish citizens have been a debate that has lasted for decades. Turkey has been a candidate EU member country since 2005. Some of the Balkan and Eastern European nations have recently obtained visa-free access to the EU.

The process to enable Turkish citizens to travel visa-free to the Schengen countries began at the end of 2013, following the EU-Turkey Readmission Agreement. Turkey has failed to meet five out of seventy-two benchmarks listed on the roadmap to be granted visa waiver status for the Schengen zone. If these benchmarks are met, the Turkish passport will rank very highly.

Analysis for Investors

Over the past decade, the Republic of Turkey has witnessed substantial growth in foreign direct investment (FDI) into its real estate market, concentrated primarily in its largest city and financial capital of Istanbul. Drivers for this increasing FDI include Istanbul’s relative abundance of luxury properties and favorable rental yields for investors.

Istanbul retains competitive cost of living advantages relative to other global cities, enabling foreign real estate investors to acquire properties with profit-generating solid potential. Turkey’s extensive coastline has proven attractive for overseas buyers seeking vacation homes.

Increased FDI into Turkish real estate and capital markets provides broader economic benefits, including liquidity injection, employment generation, infrastructure development, and the introduction of novel construction technologies and methods.

What is Next for Turkey’s Citizenship Program?

Recent enhancements to Turkey’s investment citizenship scheme, coupled with Istanbul’s relatively affordable housing prices and favorable rental yields, have rendered the country an increasingly sought-after destination for international property investors seeking Turkish citizenship.

There are several benefits to investing in Turkey and investing in growing your second passport portfolio. The program has one of the highest numbers of applicants each year. This guide can help you choose the right citizenship by investment program. If you’d like to see how a good agency can help after this decision, read out case management services. One of our experts can walk you through the process.

Frequently Asked Questions & Answers

What is real estate investment requirement to obtain citizenship in Turkey?

The minimum cost is $400,000 for real estate. Foreign currency needs to be transferred into Turkish Liras to complete the transaction.

Can I purchase multiple properties in Turkey?

Yes, however, the recent law changes in 2022 require the investment to be under one single contract to be eligible for citizenship. This means at least one property must be valued at over $400,000.

How long does the application process typically take?

The process will take around three to four months until you get Turkish citizenship and have a Turkish passport.

How strong is the Turkish passport?

Turkish citizens had visa-free or visa on arrival access to 123 countries and territories, ranking the Turkish passport 51st in terms of travel freedom.