1. Introduction
Turkish citizenship can be acquired in two ways in terms of time. First, Turkish citizenship can be acquired at the moment of birth. Citizenship acquired by descent refers to acquisition of the citizenship of the Turkish citizen mother or father to whom the child is bound by descent at the time of birth.
The second possibility is subsequent acquisition of Turkish citizenship. There are multiple ways for this possibility. For example, Turkish citizenship can be acquired in general based on the decision of the competent authority. Another possibility is through adoption. As per the Article #17 of the Turkish Citizenship Law, a minor who is adopted by a Turkish citizen may acquire Turkish citizenship as of the date of the adoption decision, provided that there is no obstacle in terms of national security and public order. Another possibility is acquisition of Turkish citizenship through marriage. It should be noted that simply marrying a Turkish citizen will not confer citizenship to the person. Pursuant to the Article #17 of the Turkish Citizenship Law, marriage to a Turkish citizen does not directly confer Turkish citizenship. However; foreigners, who have been married to a Turkish citizen for at least three years and whose marriage continues, may apply for Turkish citizenship. If the application is approved, citizenship is acquired.
In addition to the examples given, some exceptional cases where Turkish citizenship may be acquired are also set out under the law. The regulation on acquisition of Turkish citizenship through investment, which is also the subject of this article, is one of these cases. Article 12 of the Turkish Citizenship Law sets out the exceptional acquisition of Turkish citizenship.
2. Article 12 of the Turkish Citizenship Law (Exceptional Circumstances in Acquiring Turkish Citizenship)
Pursuant to the Article #12 of the Turkish Citizenship Law, the only condition for persons in the aforementioned groups to acquire Turkish citizenship exceptionally is that they “do not have any condition that would constitute an obstacle in terms of national security and public order”. If the persons in the groups, mentioned in the article, do not have such a condition, they can easily acquire Turkish citizenship exceptionally by the Presidential decree [1].
The persons who can acquire Turkish citizenship exceptionally are specified in 4 groups in under the law:
a) Persons who bring industrial facilities to Türkiye or who have rendered or are expected to render extraordinary services in scientific, technological, economic, social, sportive, cultural, artistic fields and for whom a reasoned proposal is made by the relevant ministries.
b) (Supplemented: 28.7.2016-6735/27 Art.) Foreigners who have obtained a residence permit pursuant to the subparagraph (j) of the first paragraph of the Article #31 of the Law on Foreigners and International Protection dated 4.4.2013 and numbered #6458, and foreigners holding Turquoise Cards, and their foreign spouses, their and their spouses' minor or dependent foreign children.
c) Persons deemed necessary to be naturalized.
d) Persons recognized as immigrants.
Acquisition of Turkish citizenship through real estate investment, which is the subject of our article, falls under the scope of the Article #12-1(b). As seen under the relevant provision, reference is made to the Law Nr. #6458 on Foreigners and International Protection.
3. Article #31 of the Law Nr. #6458 on Foreigners and International Protection
What is essentially regulated in the aforementioned provision is the short-term residence permit. However, as we have mentioned, as per Article 12 of the Turkish Citizenship Law, “those who have obtained a residence permit pursuant to the subparagraph (j) of the first paragraph of Article 31 of the Law Nr. #6458 on Foreigners and International Protection” may acquire Turkish citizenship exceptionally, persons who may obtain a residence permit under Article 31 of the Law on Foreigners and International Protection may acquire Turkish citizenship exceptionally.
Paragraph “j” of Article 31 of the Law on Foreigners and International Protection sets out that residence permits may be granted to “those who do not work in Türkiye but who will make investments within a scope and amount to be determined by the President, and their foreign spouses, and their and their spouses' minor or dependent foreign children”.
Therefore, pursuant to this provision, those who will make investments within the scope and amount to be determined by the President and their foreign spouses and their minor or dependent foreign children may obtain a short-term residence permit under Article 31 of the Law on Foreigners and International Protection and then acquire Turkish citizenship exceptionally pursuant to Article 12 of the Turkish Citizenship Law.
It should be noted that fulfillment of the conditions, as set out under Article 31 of the Law on Foreigners and International Protection, will not directly grant a residence permit. Article 31/f.1 of the Law on Foreigners and International Protection explicitly states that “...may be granted”, emphasizing the discretionary power of the competent authority to grant the residence permit.
4. The Investment Element
As mentioned above, the first step in acquiring Turkish citizenship through real estate investment, obtaining a residence permit pursuant to Article 31 of the Law on Foreigners and International Protection, is conditional upon making an investment under specified conditions.
Article 31 of the Law on Foreigners and International Protection sets out that “those who will make investments within the scope and amount to be determined by the President, and their foreign spouses, and their and their spouses' minor or dependent foreign children”.
The wording of the provision clearly emphasizes that the scope and amount of the investment will be determined by the President. This scope and amount are set out under Article 20 of the Regulation on Implementation of the Turkish Citizenship Law under the heading “Exceptional acquisition of Turkish citizenship, documents required for application and procedures to be followed”.
Pursuant to Article 20 of the Regulation, the investment can be realized in multiple ways. The person who fulfills one of the investment conditions, as set out under the said article, will have fulfilled the investment condition to acquire Turkish citizenship exceptionally. Various investment methods are set out under the respective provision. For example:
- To make a fixed capital investment of at least USD 500,000 or its foreign currency equivalent,
- Create at least 50 jobs,
- Deposit at least USD 500,000 or its foreign currency equivalent in banks operating in Türkiye, provided that the deposit is held for three years,
- To purchase real estate investment fund participation shares or venture capital investment fund participation shares amounting to at least USD 500,000 or its equivalent in foreign currency, provided that they are held for at least three years.
As can be seen, the investment options set out under the law have different features, and the amounts and conditions may differ depending on which paragraph the investment is to be realized.
5. Real Estate Investment
Realization of one of the investment methods listed above will fulfill the investment condition under Article 31 of the Law on Foreigners and International Protection. The investment methods listed in Article 20 of the Regulation on Implementation of the Turkish Citizenship Law are not limited to those listed above.
The investment method that we encounter in practice and which is the main subject of this article is the real estate investment method, set out under Article 20/2-b of the Regulation on Implementation of the Turkish Citizenship Law.
As per this provision, it is stated that “the person who purchases a landed immovable property with condominium ownership or condominium easement established or on which a building is located, with a landed immovable property of at least 400,000 US Dollars or its equivalent in foreign currency, on the condition that an annotation not to sell it for three years is placed on the title deed records, or a landed immovable property with condominium ownership or condominium easement established, with a landed property of at least 400. 000 USD or its equivalent in foreign currency in advance and promised to sell the immovable with a notarized contract with the condition of annotating the commitment that it will not be transferred and abandoned for three years in the title deed registry” will have fulfilled the investment condition for the exceptional acquisition of Turkish citizenship upon determination of the ministry.
It should be noted that the amounts of the investment methods, as set out under the law, are changed from time to time. Article 20/2-b of the regulation, setting out real estate investment, was revised as USD 400,000 by and through the amendment, promulgated on the Official Journal on January 6, 2022. As of 19.04.2024, the amount determined as USD 400,000 in the relevant article remains valid. Nevertheless, it should be noted that this amount is subject to change from time to time.
6. Important Considerations for Satisfying the Real Estate Investment Condition
6.1. Nature of Real Estate
As of January 6, 2022, the real estate investment required under this provision is USD 400,000. Therefore, the first condition is that the real estate investment exceeds USD 400,000. This amount can be achieved through purchase of one or more immovable properties. The first condition will be met by purchase of one or more immovable properties above this value. In the same direction, this condition can also be met by acquiring easement rights or condominiums above the specified amount. Therefore, the nature of the real estate to be invested in is important.
In a free market economy, the value of immovable properties cannot be known precisely, and these values may change rapidly. Since the minimum value set by the Law is USD 400,000, investing in real estate with a value below this value will result in failure to meet this condition. Therefore, it is important to objectively determine the value of the immovable property. This will be possible through preparation of an appraisal report.
6.1.1 Appraisal Report (Amendment dated 01.03.2024)
The appraisal report is important in terms of determining the value of the immovable. Under the circular dated 15.02.2019 and numbered 2019/1 published by the Directorate General of Land Registry and Cadastre under the Ministry of Environment and Urbanization, foreign nationals are now obliged to obtain a 'Real Estate Appraisal Report' not only in citizenship applications, but also in all sales transactions in which they are a party as buyers or sellers.
It will be important that the appraisal report is dated no more than three months prior to the application date. As a result, the value determined in the appraisal report for the real estate to be invested in must be above USD 400,000.
It should be noted that under the circular published very recently, a change has been made regarding the institution to obtain the appraisal report that will be subject to exceptional acquisition of Turkish citizenship, effective as of 04.03.2024.
In other transactions that are not subject to the request for Turkish citizenship and for which an appraisal report is required, the appraisal reports can be issued by any Appraisal Institution licensed by the Capital Markets Board.
Department of Real Estate Appraisal of the Directorate General of Land Registry and Cadastre of the Ministry of Environment, Urbanization and Climate Change issued a circular dated 01.03.2024 titled “Procedures and Principles Regarding the Appraisal Reports to be Used in Real Estate Acquisitions of Foreigners and Certain Transactions”. GEDAŞ Gayrimenkul Değerleme A.Ş., a subsidiary of the Housing Development Administration affiliated to the Ministry, was authorized to issue the appraisal reports required in the sale / sale promise transactions for exceptional acquisition of Turkish Citizenship to ensure standardization in the appraisal reports issued for exceptional acquisition of Turkish citizenship and to prevent differences that may occur in the value of immovables.
After this amendment, report applications in title deed transactions for exceptional acquisition of Turkish Citizenship will be made by selecting GEDAŞ Gayrimenkul Değerleme A.Ş. from the Request Information ==> Purpose of Request ==> Sales Subject to Citizenship application option from the official website address of Web Tapu (https://webtapu.tkgm.gov.tr/).
As clearly stated under the circular, only appraisal reports prepared by GEDAŞ Gayrimenkul Değerleme A.Ş. will be accepted for Turkish citizenship requests to be made after the Sale / Promise of Sale transactions made after the effective date of the circular [2].
The period of use of the appraisal reports to be used in title deed transactions is 3 months. If this period expires, a new appraisal report is requested through the system before the title deed transaction.
6.2. Foreign Currency Purchase Certificate and Receipt
With the update made in the Capital Movements Circular on of the Central Bank of the Republic of Türkiye (the “Circular”), the obligation to exchange foreign currency in real estate sales in which foreign real persons are buyers after January 24, 2022 has been introduced within the scope of Article 13.
Therefore, this provision will be important for real estate investments to be made by foreigners within the meaning of Article 31 of the Law on Foreigners and International Protection as of January 24, 2022. Within the scope of the amendment, non-Turkish citizens will be required to pay for the real estate they will purchase in Türkiye in foreign currency.
Foreign currency purchase certificate is a document showing that the foreign currency has been sold to a bank operating in Türkiye to be sold to the central bank before the purchase is made by the foreign buyer at the land registry office.
The foreign currency subject to the purchase is sold to a bank operating in Türkiye and the bank sells it to the Central Bank of the Republic of Türkiye and the payment is made to the relevant person in Turkish lira. After this sale to the Central Bank, a foreign currency purchase certificate will be issued by the bank on behalf of the person who sells foreign currency. The foreign currency must be exchanged before the title deed transactions and the foreign currency purchase certificate must be submitted to the title deed office before the sale.
In citizenship transactions, the Land Registry Office will request the foreign currency purchase certificate and the certified bank receipt showing that the amount of the foreign currency exchange has been sent to the seller's account. While the foreign currency purchase certificate must be submitted to the Land Registry Office before the sale transaction, it is possible to submit the real estate payment receipt (money transfer from the buyer to the seller) together with the “Foreign Currency Purchase Certificate” before the sale transaction or separately before the commitment transaction and before the issuance of the certificate of suitability at the latest [3].
6.3. Annotation Requirement
An annotation is required to be placed in the land registry regarding the purchased real estate. The foreigner who wants to acquire citizenship through investment must annotate the land registry for the immovable or immovables exceeding USD 400,000, stating that s/he will not sell the relevant immovable for three years. Similarly, if an easement right or condominium is transferred, an annotation must be made in the land registry and a commitment not to transfer or abandon the property for three years must be annotated.
6.4. Certificate of Suitability
The Ministry of Environment and Urbanization (Directorate General of Land Registry and Cadastre) is the competent authority to issue the certificate of suitability to determine that the immovable subject to acquisition of citizenship through purchase of immovable property meets the minimum investment requirement. The certificate of suitability will be requested from the Regional Land Registry Office after the necessary annotation is made in the land registry. The Regional Land Registry Office will examine the investment and determine whether the transfer meets the conditions. When the certificate of suitability is obtained by the Office, an application for a short-term residence permit will be made to the Directorate General of Migration Management in accordance with the article 31/j of the Law on Foreigners and International Protection with this document and other necessary documents. After obtaining the short-term residence permit in accordance with the article 31/j of the Law on Foreigners and International Protection, the final stage, which is the application for exceptional acquisition of citizenship, can be realized.
6.5. Application for Turkish Citizenship through Real Estate Investment
Pursuant to Article 31/j of the Law on Foreigners and International Protection, the foreigner who obtains a short-term residence permit shall apply for Turkish citizenship with the necessary documents to the Directorate General of Population and Citizenship Affairs.
7. Conclusion
In conclusion, it is possible to acquire Turkish citizenship by investing in real estate. It is important to carefully consider the conditions and necessary documents at the stages such as realizing this investment, obtaining a short-term residence permit and applying for citizenship. As of today, a foreigner who purchases real estate worth at least USD 400,000 and puts an annotation on the real estate stating that s/he will not sell it for three years will be able to obtain a short-term residence permit in accordance with article 31/j of the Law on Foreigners and International Protection upon fulfilling the other conditions and stages mentioned above. The foreigner who obtains a short-term residence permit in this way will then be able to acquire Turkish citizenship by applying for citizenship in accordance with Article 12 of the Turkish Citizenship Law.
Halit Ata Yıldırım, Legal Intern
References
1. İlyas Gölcüklü, Güncel Gelişmeler Işığında Yatırım Yoluyla Türk Vatandaşlığının Kazanılması: Problemler ve Çözüm Önerileri, 2020, Research Article, International Public and Private Law Bulletin of Istanbul University
2. Circular dated 01.03.2024 and titled "Procedures and Principles Regarding the Appraisal Reports to be Used in Real Estate Acquisitions of Foreigners and Certain Transactions" published by the Department of Real Estate Appraisal of the Directorate General of Land Registry and Cadastre of the Ministry of Environment, Urbanization and Climate Change
3. Foreign Currency Exchange
Obligation for Real Estate Purchases by Foreigners, 2022, Directorate General of
Land Registry and Cadastre, of the Ministry of Environment, Urbanization and
Climate Change of the Republic of Türkiye
