What is a Foreign Exchange Purchase Certificate?
The Foreign Exchange Purchase Certificate is a document showing that the foreign currency has been sold by the foreign buyer to a bank operating in Turkey to be sold to the Central Bank, before the sales transaction at the Land Registry Office.
Why is the Foreign Exchange Purchase Certificate Necessary?
According to Article 13 of the Central Bank of the Republic of Turkey's circular on Capital Movements and the Regulation on the Implementation of the Turkish Citizenship Law, a foreign exchange conversion obligation to the Central Bank has been imposed for transactions involving foreign buyers where foreign currency sales are made to the Central Bank of the Republic of Turkey.According to the regulation detailed in the circular that came into effect on January 24, 2022, foreign nationals must first sell their existing foreign currency to the Central Bank through banks for real estate purchase transactions and then submit the Foreign Exchange Purchase Certificate issued by the relevant bank to the Land Registry Office. As a result of this regulation, no additional exchange rate calculation will be made regarding the value stated in the official sales deed prepared at the Land Registry Office or in the sales promise contract notarized, and the “Foreign Exchange Purchase Certificate” will be taken as the basis for value determination.
For the foreign exchange sale to the banks, the foreign buyer can perform the transaction personally or authorize a lawyer registered with the Bar Association through a power of attorney to carry out the transaction and obtain the Foreign Exchange Purchase Certificate. The exchange rate applied in this transaction is based on the US dollar (USD) rate announced simultaneously with the transaction.
It should be noted that according to Article 20 of the Regulation on the Implementation of the Turkish Citizenship Law, foreigners who purchase real estate worth at least 250,000 US dollars or the equivalent amount in foreign currency, provided that a restriction is placed in the land registry records preventing the sale of the property for three years, or who have established condominium or usufruct rights, have paid at least 250,000 US dollars or the equivalent amount in foreign currency in cash, and have a notarized contract with a commitment recorded in the land registry that the transfer and relinquishment of the property will not be made for three years, as determined by the Ministry of Environment, Urbanization and Climate Change, can acquire Turkish citizenship by presidential decree.
Transactions carried out before the publication of the relevant circular will be accepted, and there will be no need to present a foreign exchange purchase certificate. However, for transactions made before the publication date of the circular, a bank receipt proving the transfer of funds from the buyer to the seller must be submitted.
How is the Foreign Exchange Purchase Certificate Issued?
In the foreign exchange purchase certificate, the name, surname, passport number or foreign identity number of the foreign individual who exchanged the currency must be stated, along with the US dollar equivalent of the purchased foreign currency. The foreign exchange purchase certificate must be obtained from the bank where the currency was exchanged on behalf of the Central Bank. The amount of foreign currency exchanged, as reflected in the certificate, should be recorded as the basis value in the official deed. While the foreign exchange purchase certificate is sufficient for sales transactions, in the case of citizenship acquisition through exceptional means by purchasing real estate, a bank receipt related to the transfer of funds from the buyer to the seller must also be presented.
ANTALYA REAL ESTATE LAWYER – ANTALYA FOREIGN LAWYER
As of the publication of the circular dated 24.01.2022, it has become mandatory for foreign nationals to present a “Foreign Exchange Purchase Certificate” in real estate purchase and sale transactions. To ensure that the related procedures are completed accurately and swiftly, it has become extremely necessary to obtain assistance and follow-up services from a lawyer specializing in Foreigners’ Law. Our law office provides you with professional assistance and follow-up services in the field of Foreigners’ Law.
