Heavy! Turkey Revises Investment Naturalization Policy: Investment Must Be Completed in Turkish Lira!

According to the latest policy, starting from January 6, 2022, buyers must use their local Turkish account to pay the house price, and the house price must be paid in lira (settled at real-time exchange rate). Similarly, deposit immigrants must store lira (equivalent to US $500000, settled at real-time exchange rate) and hold it for 3 years.

Although the minimum investment is still pegged to the US dollar (US $250000 for buying a house and US $500000 for other asset classes), investors must convert foreign currency into Turkish lira to finally complete the investment.

For those investors who buy a house (most investors choose to buy a house), the practical effect of these changes is limited; the investment naturalization program has been converting U.S. dollars into lira for some time.

However, for those who invest US $500000 to buy government bonds or deposit US $500000 to apply for an investment naturalization plan, the actual impact is great. Under the new policy, bank deposits and bond investments may not be held in foreign currency-only in Turkish lira.

For example

Investors who choose bank deposits to apply for the investment naturalization plan first have to exchange 500000 dollars worth of lira from the bank, which is about 7 million lira, and then deposit the 7 million lira into a Turkish bank for three years. Although this will expose investors to the risk of high inflation in Turkey for three consecutive years, investors also benefit from the high interest rates on deposits.

The report said that the purpose of the new policy is to increase the foreign exchange reserves of Turkey's central bank. Commercial banks exchange Turkish lira for foreign exchange in the hands of investors in the investment naturalization program, and then the central bank uses Turkish lira to purchase these foreign exchange from commercial banks.