Routes for Obtaining Residency in Exchange for Investment
To get a Golden visa, you can spend at least half a million dollars on:
- Government bonds
- Capital investment
- Venture capital investment
- Real estate investment fund
- Bank deposit
Alternatively, you may spend at least $400,000 on purchasing real estate. Or, you can launch a business and employ 50 or more locals.
No matter which variant you prefer, you'll be required to keep your investment for 3 years. Then, you'll be allowed to withdraw your funds or resell your property — and you won't lose your residency.
Buying a property is the most affordable and the easiest route. It doesn't require as much expertise as choosing the right assets or launching a company. Many expats opt for it because if they relocate to Turkey, they will have to live somewhere anyway.
Benefits of Becoming a Resident
Many other countries offer Golden visas to expats. You might want to opt for Turkey for the following reasons:
- The process of obtaining the visa is fast and intuitive. You should be able to get it in three months after the application or even faster.
- Your dearest and nearest can apply together with you. We'll share the details in one of the next passages of this article.
- Investors are allowed to visit Turkey even when the borders are closed. This might happen, for example, during a pandemic or a political crisis. You'll still be able to inspect the property, sign the papers and avoid losing a single lira for being late.
- It's not necessary to spend any amount of time in Turkey. Feel free to stay in your homeland or travel around the world. Few other countries offer such flexibility for foreign investors.
- The quality of medical and higher educational services is high. You won't need to travel abroad to get rid of a disease or send your kids to a foreign university (unless they want it).
- You'll never get bored in Turkey. The local landscapes are picturesque and the culture is rich. There are hundreds of cultural sites that you can visit. The local cuisine is very tasty and is based on healthy seasonal products. The entertainment sector is well-developed for customers of all ages.
- The local economy is growing. On the one hand, there is a large-scale crisis. On the other hand, it doesn't prevent investments, commercial activities and technological advancements.
- As a resident, you can apply for citizenship and get it in around four months. Very few states can accept you as a citizen that fast.
- With a Turkish passport, you'll have the same rights as the citizens of this country who were born and spent all their lives here.
- You won't have to pass a test to confirm that you can speak Turkish and are familiar with the local culture and history. It's a rare privilege, compared to third-party Golden visa programs. It's quite possible to lead a comfortable life in Turkey if you speak only English. Salespeople, hairdressers, drivers and other staff in the most popular tourist areas understand English. But if you're planning to lead business activities here, it's better to learn Turkish.
- Unlike some other states with Golden visa programs, Turkey supports dual citizenship. You won't need to renounce your homeland's passport — unless the laws of your homeland make you do so.
- With a Turkish passport, you'll be able to travel to around 110 states without a visa.
- From Turkey, you can easily relocate to the USA or the UK. You'll need a visa — but the process of getting it will be relatively simple. After the relocation, you'll be able to work or run a business in the most developed countries on the planet. Just to compare: for citizens of India or China, these routes might be unavailable.
Previously, Turkey was thinking of becoming an EU member. Now, the geopolitical situation has become more volatile and it's getting increasingly harder to plan such things. Nevertheless, the European influence in this country is impressive, especially in the Western part. The majority of investors come from the Arab countries. However, there are thousands of expats from the EU, the UK, the USA, Canada, Russia and other states. Depending on where you choose to live, you can surround yourself with a cosmopolitan environment — or opt for the unique national flavor.
Work Opportunities with Golden Visa
A foreigner with a Golden Visa has the right to work in Turkey. If their family members applied together with them, they are allowed to work within the country as well. They can look for vacancies in any sector and with any level of responsibility, there are no limitations for them in this aspect.
How to Apply for a Turkey Residence Permit by Investment
Here are the papers that it's necessary to prepare:
- Birth certificate
- Passport-style photos
- Marriage, divorce and death certificates, if the applicant has or had spouses
- Proof of investment
- Local tax number
- Proof of having paid all the necessary fees and taxes
- Proof of always having been law-obedient
- Proof of having never stayed in Turkey illegally
- Medical insurance
The list of documents might vary depending on your origin and individual circumstances.
How to Get a Residence Permit for Buying Property
The process is rather straightforward:
- Obtain a certificate of eligibility. There are different types of certificates, issued by different types of authorities. The type depends on the characteristics of the chosen property.
- Open an account in a local bank.
- Apply for a residence permit.
- Finalize your investment.
Normally, expats wait from 1 to 3 months to obtain their permits. If you decide to apply for citizenship after receiving the permit, it might take you around 4 months.
How to Get a Residence Permit When Renting Property
To get residency, you may invest capital or create a business in Turkey. In this case, feel free to rent accommodation instead of buying it. It's important that your rental contract lasts at least 12 months. Besides, all the household bills need to bear your name on them.
How to Buy Property
Here is the step-by-step guide to purchasing accommodation:
- Sign a contract with an experienced consultant. It's not mandatory — but by doing so, you might be able to save time, funds and nerves.
- Select the property — ideally, several variants to compare. You might get spoilt for choice. There are so many options on offer, perfectly suitable for investment, permanent living or renting out.
- Visit the country in person to inspect your property variants. It's not obligatory. You can appoint a legal representative who will take care of all the steps of the purchase process. But it would be wise to see the house or apartment with your own eyes, assess its state and familiarize yourself with the neighborhood.
- Discuss the terms of the deal and the price. An expert who knows the local real estate market well might be able to help you with the negotiations.
- Select the best property and reserve it. It's a norm to pay over $1,000 for the reservation. If you change your mind later, you'll lose the deposit. If you finalize the purchase, the sum of the deposit will be deducted from the property's price.
- Buy the property. Sign the contract, transfer the funds to the vendor and complete legal formalities. Register the property in your name the same day when you purchase it. At this stage, it's not necessary to be physically present in the country. A legal representative can do everything for you.
In some other countries that offer Golden Visas, it's crucial to get pre-approval for the property. Turkey lacks this requirement because houses and apartments here tend to be overvalued.
The inflation in Turkey has been skyrocketing recently. No matter which property you invest in, you can be sure its price will rise very soon. The average cost of a residential property in the most popular tourist areas varies from $90,000 to $150,000 — but this data might change very fast.
House prices tend to rise by 20% annually. The nominal value of a property in Istanbul can double in 5-10 years. There are no signs of inflation slowing down. The sooner you purchase a property, the more affordable it should be — and you'll be likely to earn a decent sum on it in the long run.
To be eligible for an investment visa, an expat needs to tick these boxes:
- Come of age
- Have enough funds and be able to prove their legal source
- Have never violated the law
The main applicant can take their dearest and nearest with them: partner or spouse, dependent elderly parents, kids younger than 18 or kids younger than 21 who remain financially dependent on their parents.
Which Property to Opt for
To qualify for a Golden visa, you can purchase an apartment, a house or a plot of land for construction. You're allowed to buy one or several properties whose total price exceeds the $400,000 threshold. They can be new or second-hand. If you opt for several properties, they all must belong to the same neighborhood. Besides, there are restrictions on buying huge plots of land or properties located on the land that serves military purposes.
In the most popular tourist areas, the number of foreign homeowners is already too high. That's why the authorities have suspended new deals for expats there. But don't worry, the selection of the available areas remains large and diverse. You'll be able to select from picturesque seaside villages, cozy small towns and hustling and bustling big cities.
When selecting a property, you should think not only about its ROI. It's vital to analyze the plans for the area's development. The government and businesses invest large funds in various sectors of the local economy. A calm fishermen's village can quickly turn into a premium resort. A faraway town can become an important logistics and transportation hub. As a result, the property prices and the demand for accommodation will rise.
The urban transformation program can open attractive opportunities for investors too. In terms of the program, people with low or medium income move from their old homes to the new ones that the government provides. The old homes are demolished. Sometimes, it creates empty plots of land in strategically located neighborhoods with a modern infrastructure. Developers use such chances to construct new accommodation there — which can be interesting to investors.
During the economic crisis, you might be able to get discounts. Vendors who urgently need money might be eager to sell their properties cheaper than the market average. To look for such opportunities, you'd better hire a local expert. Otherwise, it might be challenging for you to estimate the fair price for each object.
One of the major pitfalls of Turkey is that it's prone to earthquakes. Even though developers are supposed to build homes that can withstand such disasters, not everyone fulfills this promise. When choosing a property, have a look at the history of earthquakes in the area. Try to select a developer that ensures decent construction quality. The construction sector in this country is among the largest and the most active in the world, so there are many variants to choose from.
Another concern is the fierce competition among investors. People from different parts of the world would like to buy the best Turkish properties at the lowest possible price. Be ready to think and act quickly — otherwise, someone might purchase the chosen house or apartment faster than you.
In most cases, expats who meet the formal requirements get their visas without a hitch. Denials usually take place for two reasons:
- Foreigner fails to tick some boxes — for instance, prove the legal source of their funds
- They lack some documents or there are mistakes/misprints in their papers
If you fail to get a visa, you have the right to apply once again. It's always better to consult a professional before the application so that they double-check your documents and share smart tips.
When buying a second-hand property, be ready to pay a 4% transfer tax. Foreigners who purchase properties from developers are exempt from this tax.
The maximum amount of stamp duty is 0.6%. The VAT rate can vary from 1% to 18%.
The maximum annual tax rate for property is:
- 0.2% — for residential
- 0.4% — for commercial
- 0.6% — for a plot of land
In large cities, the rates are higher than in rural areas.
Now, let's have a brief look at the taxes that you'll need to pay if you decide to live, work or run a business in this territory.
If you spend in Turkey less than half a year each year, you won't need to pay the taxes here for the income that you generate abroad. It will be enough to pay taxes for the income that you make locally. However, if you spend in this country more than half a year per year, you'll have to pay all your taxes here.
The amount of the income tax depends on how much you earn. For those who make less than 32,000 TRY, it's 15%. For those who earn over 880,000 TRY, it's 40%.
Employees pay 14% of their income as social security. Employers pay 20.5%. You might be exempt from these expenses for a limited period if your homeland has signed a treaty with Turkey.
Interest tax falls within the range between 0% and 15%. For non-residents, it's typically higher than for residents. The rate for mature bonds and deposits tends to be lower.
The dividends tax is 10%. It applied not to the whole amount of dividends but to a half. Tax returns are possible.
The corporate tax rate is 25%.
The maximum amount of the gift tax is 10% and that of the inheritance tax is 30%. You'll have three years to pay both.
To sum it up, local taxes tend to be more lucrative than in most Western countries.
Difference Between Residency and Turkey Citizenship by Investment
The Turkey Golden visa will be issued to you for an indefinite period. If you get a local passport, be ready to renew it every decade.
With a Turkish passport, you'll be able to visit around 110 states without a visa. The residence permit won't grant you this opportunity.
If your homeland doesn't support dual citizenship, you might need to renounce your previous citizenship in exchange for the Turkish one. With an investor's visa, you won't need to do that.