The primary rule is transacting in domestic currency however there are exceptions that separately apply to government agencies, residents, and non-residents. Also, legal entities resident in Türkiye, which are owned and/or controlled by foreign shareholders are granted additional exceptions.
As a rule of thumb, except for the cases determined by the Ministry of Treasury, payment obligations arising from all kinds of purchase and sale of movables and real estate, movable and real estate rentals, including leasing, vehicle and financial leasing and employment, service and work contracts and other payments arising from these contracts entered into among persons residing in Türkiye, cannot be made in foreign currency or indexed to foreign currency.
Also in connection with the projects to be carried out for performance of tenders, in contracts and international agreements in foreign currency or indexed to foreign currency to which public institutions and organizations are parties; contractors or commissioned companies and their contracted parties may determine the contract price and other payment obligations arising from these contracts in foreign currency or indexed to foreign currency, save for real estate sales contracts and employment contracts. In addition, public financing may be made in foreign currency or indexed to foreign currency.
Furthermore borrowing in foreign currency or indexed to foreign currency by legal entity persons resident in Türkiye either from domestic or foreign financial institutions is separately regulated and there are different conditions that apply. Persons residing in Türkiye is defined as real and legal persons with a legal residence in Türkiye, including Turkish citizens earning income abroad. Persons residing abroad is defined as those real and legal persons falling outside the definition of persons residing in Türkiye.
Is there an approval requirement (e.g. through Central Bank or another governmental agency) to use foreign currency in the country to pay:
in an acquisition, or
There is no approval requirement to use foreign currency for payment in an acquisition in Türkiye. However, the Turkish foreign exchange regulations only allow for the following acquisition payments to be made in foreign currency (or indexed to foreign currency) domestically:
a) Real estate acquisitions made between a person residing in Türkiye and a person residing abroad or two persons residing abroad.
b) Persons residing in Türkiye can agree on the purchase price and other payment obligations for sales of movables other than vehicle sales, in foreign currency or indexed to foreign currency. However, the payment must be made in Turkish currency. Shares of a company is deemed a movable asset; therefore, sales of the shares should be treated as sales of movables. Therefore, although the payment obligations can be determined in foreign currency, the payment should be made in Turkish currency.
In respect of sales of vehicles, the payment obligations must be determined and paid in Turkish currency.
to pay to contractors, or
With respect to services including consultancy, brokerage and transportation, persons residing in Türkiye are allowed to agree among themselves on the contract price and payment obligations arising from the following contracts in foreign currency or indexed to foreign currency:
a) service contracts to which persons who do not have citizenship ties with Türkiye are parties,
b) service contracts made within the scope of export, transit trade, sales and deliveries considered as exports, and foreign exchange earning services and activities,
c) service contracts made within the scope of the activities to be carried out abroad by persons residing in Türkiye,
d) service contracts which will be concluded between the persons residing in Türkiye that start abroad and end abroad; start in Türkiye and end abroad, start abroad and end in Türkiye.
- To the extent there are costs in foreign currency in work contracts, persons residing in Türkiye are allowed to decide on the contract price and other payment obligations arising from such contracts entered into between themselves in foreign currency or indexed to foreign currency.
- Persons residing in Türkiye may, in respect of sales of software produced abroad within the scope of information technologies contracts, license and service contracts for hardware and software produced abroad, decide on the contract price and other payment obligations arising from these contracts in foreign currency or indexed to foreign currency.
- Branch, representative office, office, liaison office of persons residing outside of Türkiye, their (at least) majority owned or controlled companies or companies they are in common control with which are resident in Türkiye and companies in free zones within the scope of their activities in the free zones, in employment and service contracts to which such companies are a party as an employer or service recipient, may agree to have the contract price and other payment obligations in foreign currency or indexed to foreign currency.
- Commercial airline operators engaged in passenger, freight or mail transportation activities located in Türkiye; companies that provide technical maintenance services for air transport vehicles, engines and their components and parts; organizations with the status of public or private law legal entities that have received or are authorized to operate to provide ground handling services at airports within the scope of civil aviation legislation and the businesses established by these organizations and companies in which they have at least fifty percent of the share capital, directly or indirectly, may enter into contracts with persons resident in Türkiye in foreign currency or indexed to foreign currency save for contracts for real estate sales, real estate leasing and employment contracts.
to pay salaries of employees?
The payment obligations arising from employment contracts (such as salaries) cannot be in foreign currency or indexed to foreign currency. However, there are exceptions to this rule which are as follows:
In the following employment contracts, such payment obligations can be in foreign currency or indexed to foreign currency:
a. Employment contracts to be performed abroad,
b. Employment contracts of employees who are subject to Maritime Labour Law,
c. Employment contracts executed by:
- (i) branches, (ii) representative offices, (iii) offices, (iv) liaison offices, which are located in Türkiye, of the companies located abroad,
- companies whose 50% or more share capital is owned by or who is under common control of and/or is controlled by a foreign shareholder, either directly or indirectly,
- companies located in free zones within the scope of their activities in the free zones.
d. Employment contracts to which foreign persons residing in Türkiye are parties.
Is there a limit on the amount of foreign currency in any transaction or series of related transactions?
There are no such limit; however, in line with the Financial Action Task Force advisory, banks report international transfers exceeding USD 50,000 or its equivalent to Financial Crimes Investigation Board of Türkiye.
Is there an approval requirement and a limit on how much foreign currency a foreign investor can transfer into the country?
Turkish law does not impose any approval requirement or limit.
Is there an approval requirement and a limit on how much domestic currency a foreign investor can buy in the country?
Turkish law does not impose any approval requirement or limit.
Can an investor buy domestic currency outside of the country and transfer it into the country to pay for an acquisition or to third parties for goods or services or to pay salaries of employees?
Turkish foreign exchange legislation allows for purchases of Turkish currency abroad and transfer into Türkiye without the need for any approvals or licenses, provided that such transfers must be made through banks.