Aggressive advertising glosses over the Turkiye citizenship risks investors need to be aware of. Nonetheless, aspiring Turkish citizens are responding en mass to the government’s new financial inducements introduced in 2018. Is it all too good to be true?
Istanbul is indeed irresistible as an iconic cosmopolitan city. However, hidden underneath the thinly veiled promises of affordable luxury is the harsh reality of high income tax, rapid currency collapse with hyper inflation, plus a weak passport, high investment risk and also abundant political risk brought about by the neocon objectives of Turkiye’s government.
Should you take on the risk? Not before exploring the better alternatives.
Turkiye Citizenship by Investment is a Regressive Option
The world’s best citizenship by investment program was established in the Caribbean many years ago. Over the years, the Grenada citizenship program (Grenada CIP) has withstood the test of time.
What is the secret of their success? Grenada CIP offers investors geopolitical neutrality, political stability, a stable economy, plus a stable USD currency peg, in addition get visa free access to the Schengen area plus China and Russia. Rest assured there is no international income tax, capital gains tax or inheritance taxes in Grenada.
However, the Turkish citizenship program is the polar opposite of all these factors. The Turkish citizenship cost is much higher with significant up front investment risk.
Indeed, the objective of citizenship by investment is to improve the future prospects of the applicant. As a result, it must provide the means to escape the deficiencies of the applicant’s current citizenship. Unfortunately, many elements of the Turkish citizenship program are regressive.
Furthermore, promotions featuring Turkiye citizenship by investment do not disclose these hidden risks. In contrast, the program is instead aggressively sold as a low cost retirement home in the Mediterranean. Investors have got to do independent research to make a correct decision.
List of Turkiye Citizenship Risks
High Tax Rates are a Burden for New Turkish Citizens
Turkiye citizenship risks include high personal income tax rates for residents. This includes taxing all income sources from employment and also non-employment income. Additionally, Turkiye citizenship by investment obligates you to pay VAT, inheritance tax, capital gains tax and gift tax.
Tax rates on income range from 15% to 40% while inheritance and wealth tax rates range from 1% to 30%. Plus, in Turkiye capital gains are taxed as regular income.
A Turkish tax resident is defined as an individual who has a “domicile in Turkiye or whose presence in Turkiye is more than 6 months in a calendar year”. Source: KPMG
Are you planning to relocate to Turkiye after acquiring citizenship? Look before you leap because lower living expenses can quickly be replaced with high income tax and run away inflation.
Also, income from local sources is taxed regardless of residency status. This may include rental income on your real estate investments in Turkiye.
Employment Income Tax Rates
| Income (TRY) | Turkiye | Grenada |
| Up to 24,000 | 15% | 0% |
| 24,001 to 53,000 | 20% | 0% |
| 53,001 to 190,000 | 27% | 0% |
| 190,001 to 650,000 | 35% | 0% |
| 650,001 and over | 40% | 0% |
Source: Presidency of the Republic of Turkiye
Non-Employment Income Tax Rates
| Income (TRY) | Turkey | Grenada |
| Up to 24,000 | 15% | 0% |
| 24,001 to 53,000 | 20% | 0% |
| 53,001 to 130,000 | 27% | 0% |
| 130,001 to 650,000 | 35% | 0% |
| 650,001 and over | 40% | 0% |
Source: Presidency of the Republic of Turkiye
Sources of income for which these tax rates apply include “agricultural profits, business profits, salaries and wages, income from independent personal services, rental income, capital investment income in addition to other income and earnings”.
As a result, acquiring Turkiye citizenship by investment could become a devastating tax liability for new citizens, especially retirees on fixed income. If you still wish to pursue Turkish citizenship despite the high tax threshold, proceed only with a competent tax evaluation in advance.
Hyper Inflation and Currency Collapse
The weak currency exchange rate for the Turkish Lira has taken a turn for the worse in recent years. As a result, the inflation rate is increasing rapidly. However, the pandemic cannot be solely to blame. It is quite clear that this trend became established well before the global pandemic arrived in January 2020.
Just the same, Turkiye’s currency problems are certain to get much worse for the foreseeable future. Although sanctions continue to take their toll on the Turkish Lira, it is also riding the down draft caused by supply chain disruptions and soaring commodity prices.
Furthermore, central bank interventions by Turkiye’s President Erdogan in recent years have resulted in a loss of credibility and institutional support for Turkiye’s currency. Indeed, in the last 2.5 years President Erdogan has fired 3 central bank chiefs and most recently fired 3 central bank deputy governors who opposed last month’s 100 basis point rate cut. Unfortunately, for the Lira and Turkiye’s inflation rate, the worst is yet to come.
| Year | Turkiye Inflation | World Inflation | USD/TRY Exchange |
| 2023 | 43.68% | N/A | 20.70 |
| 2022 | 83.5% | 8.75% | 18.59 |
| 2021 | 19.6% | 3.4% | 8.89 |
| 2020 | 12.28% | 1.94% | 7.4 |
| 2019 | 15.18% | 2.19% | 5.95 |
| 2018 | 16.33% | 2.42% | 5.3 |
| 2017 | 11.14% | 2.19% | 3.78 |
| 2016 | 7.78% | 1.55% | 3.52 |
| 2015 | 7.67% | 1.43% | 2.91 |
| 2014 | 8.85% | 2.35% | 2.32 |
Source: Yahoo Finance, World Bank, Reuters Updated: May 31, 2023
Full Investment is a Risky Prerequisite
Turkiye citizenship by investment requires that the full investment is made in advance. This means that your money must be fully committed before government approval is received. However, your application could be rejected. As a result, you have a huge investment which is now in limbo.
It is an unnecessary risk, especially since Caribbean programs plus Vanuatu provide the assurance of government pre-approval. This pre-approval is received before committing the full investment amount.
Additionally, investment in Turkiye will expose you to the risk of rapid currency depreciation, sanctions, possible imposition of capital controls and bank insolvency. Therefore, waiting out the three year commitment period may be quite tedious.
If you elect to accept the risks, the main applicant must commit to one of these investments for a minimum 3 year holding period. Amounts below in USD.
- $500,000 minimum in fixed capital contribution.
- $400,000* minimum value of purchased property (can be residential, industrial, commercial or land).
- $500,000 minimum investment into venture capital fund shares or real estate investment fund shares.
- Invest sufficient funds to create jobs for a minimum of 50 people as attested by the Ministry of Family, Labor and Social Services.
- $500,000 minimum investment into Turkish government bonds.
- Invest $500,000 into a Turkish bank account.
*Minimum investment amount for buying property will increase to $500,000 effective December 31, 2024.
Currency Risks will Increase Cost of Investment
The implications of rampant inflation and currency depreciation are chronic Turkiye citizenship risks. As a result of currency depreciation, an investment made in 2017 in Turkish real estate or government bonds would have lost over 65% of its value by November 2021. Plus, when you add inflation and high income taxes investors will cringe at the true cost.
Although it is true that some investment types permit you to hold USD, it does limit your options. Also, currency instability could spill over into the banking sector and result in insolvency and the loss of the investment nonetheless.
In March 2021, the Turkish government changed the rules regarding the sale of CIP real estate. As a result, CIP property can only be used one time to qualify for a CIP application. Although this will eliminate the risk of real estate bubbles for local Turks, it will also eliminate price stability by excluding new CIP applicants (foreigners) from the pool of potential buyers. Additionally, the new rule substantially increases the likelihood that the sale will need to be made in rapidly depreciating Turkish Lira instead of the more stable USD.
Visa Requirements for Turkish Citizenship
To be clear, there is a difference between visa free, eVisa and visa on arrival. Many advertisements promoting Turkiye citizenship by investment include all three variations and label it “visa free”.
Either way, Turkish citizenship has significantly less access to visas than the Caribbean countries plus Vanuatu. All included, the Turkish passport has “visa free” access to 111 countries and territories.
| CIP Country | Visa Free Counties* | Schengen, UK, Ireland | US E-2 Visa Eligibility |
| St Kitts | 157 | yes | no |
| Grenada | 144 | yes | yes |
| Antigua | 151 | yes | no |
| St Lucia | 146 | yes | no |
| Vanuatu | 130 | yes | no |
| Turkey | 111 | no | yes |
*Includes visa free, eVisa and visa on arrival.
The Turkish passport is conspicuously missing visa free access to the Schengen area, UK and Ireland. Promoters of the Turkiye CIP are also overly optimistic about Turkiye’s purported inclusion into the EU. However, negotiations (which have been ongoing since 1987) seem to be heading in the opposite direction.
For Turkish citizens seeking brighter economic prospects there is one significant factor for consideration. Fortunately, Turkiye is a US E-2 treaty country. Therefore, Turkish citizenship includes eligibility to live and work in the US with your family. Is Turkiye your best E-2 option? Learn more here.
Visa Free Countries Map (Turkish Passport)
*Includes Visa free, eVisa and Visa on Arrival. Interactive map.
Internal and External Turkiye Citizenship Risks
For the foreseeable future your investment is politically exposed to additional internal and external risks. This includes capital controls imposed from within Turkiye to try and alleviate currency depreciation and inflation.
In addition, new Turkish citizens are exposed to the imposition of a tough Western sanctions regime in response to Turkiye’s geopolitical ambitions. This would be in addition to Western sanctions already imposed as a result of Turkiye’s purchase of the Russian S-400 air defense system.
Internal actions taken to silence political dissent could also increase the risk of sanctions. Therefore, your investment funds could be frozen indefinitely or you could be compelled to hastily dispose of your investment amplifying your losses.
Last but not least, perhaps a new Presidential decree could emerge eliminating the citizenship program? If so, the program would end as abruptly as it was started in 2017.
The Allure of Turkiye Citizenship by Investment
Turkish citizenship is full of hidden costs and risk. Nonetheless, the program has been experiencing a surge of interest especially from the Russia and Middle East. On the other hand, there seems to be little interest from investors of Western origin.
Why are Western investors shunning the Turkish citizenship program? The reason is that they may have better options available or less incentive to take on the risk.
Citizens of countries such as Russia, Ukraine, Belarus, Iraq, Iran, Afghanistan and Syria may feel their applications would be rejected by alternative citizenship programs. However, it is a mistake to assume that there are no alternative options.
Nationality restrictions come and go, they are not set in stone. There are indeed several second citizenship options still available for Russians and those of Middle Eastern origins.
As a result, Turkiye is not necessarily the best (or only) alternative option. You can still reside in Turkiye or even buy a home there without being a Turkish citizen. Therefore, be sure to explore better alternatives which are available at lower cost, lower risk and faster processing.
Better Alternatives to Avoid Turkiye Citizenship Risks
Those seeking new citizenship need to work with an experienced agent. For example, it may be possible to reapply for the Schengen visa. If successful, an application for Caribbean citizenship could be resubmitted and approved.
Investors should also be mindful that all nationalities are able to apply for Grenada and Vanuatu citizenship without political exclusion. However, certain countries of origin may draw additional scrutiny. Just the same, your application can still be approved.
You must have a verifiable source of funds, in addition to a police certificate and medical certification. As a result, you have nothing to fear and we will see to it that you accomplish your objectives. Contact me for free preliminary analysis
My partners and I have 35+ years of experience working with the Caribbean citizenship by investment programs plus Vanuatu. As a result, we are well integrated with the local real estate developers and government agencies.
In addition, my compensation is 100% commission based. If your application is not approved on the terms we promised you, I do not get paid. Therefore, you can rest assured that I will get to work on your behalf.
All applications will be subject to rigorous AML and KYC pre-qualification. If there are any issues we will identify them immediately. There is nothing to stop you from achieving your objectives of global access and financial freedom.