Burak Demirel is Country Head and Director Private Clients at Henley & Partners Turkey
Turkey is emerging as a rising star of the investment migration industry in 2022, with interest in the Turkey Citizenship by Investment Program in Q1 up a remarkable 900% on Q1 2021 levels, putting it in the top 10 programs in the world in terms of enquiries we received. This sharp rise can be attributed both to the pandemic abating and the relatively low required minimum investment in real estate of USD 250,000. However, effective 13 June 2022 the minimum has increased to USD 400,000. It will be interesting to see whether this will impact on interest in Q3.
Historically, investors from South Asia, Africa, and the Americas have been the top three sources of interest in the Turkey Citizenship by Investment Program. In 2022, by far the most enquiries we have received have been from US citizens.
The program has gone from strength to strength since it was launched in 2016. For example, there was roughly USD 7.6 billion of foreign direct investment in Turkey in 2021, and it is estimated that USD 3 billion of this came from the Turkey Citizenship by Investment Program, which also accounts for 15–20% of the entire investment migration industry.
There were 58,576 units of real estate sold to foreigners in 2021, representing just 3.9% of total real estate sales in Turkey. As such, foreign purchases do not have a major effect on the price of the country’s real estate. Meanwhile, the property market remains liquid for foreigners as there is significant local demand. The citizenship program has also diversified the investor base for Turkish real estate, with more investment by Chinese and Pakistani nationals currently than in previous years.
Henley & Partners’ outbound business in Turkey also grew significantly in 2021, with a substantial increase in the number of applications we received from Turkish citizens, who are recognizing the benefits of acquiring additional residence and citizenship options. Enquiries from Turkish nationals were up 148% last year, a trend which we expect to continue as more investors become familiar with the concept of domicile diversification.
The most popular programs with Turkish citizens are the St. Lucia Citizenship by Investment Program and the Antigua and Barbuda Citizenship by Investment Program as both offer visa-free travel to Europe’s Schengen Area and the UK. The Montenegro Citizenship by Investment Program and North Macedonia Citizenship Program are also favored by Turkish investors because of the cultural ties between Turkey and these two countries, and as they also offer visa-free access to Europe’s Schengen Area. Many of our ultra-high-net-worth clients choose Malta Citizenship by Naturalisation for Exceptional Services by Direct Investment and Austria Citizenship by Investment because there are multiple benefits to acquiring citizenship of a country that belongs to the EU. The Portugal Golden Residence Permit Program is also popular with Turkish real estate investors, as after five years of legal residence they can apply for citizenship of this EU country. The Malta Permanent Residence Programme is also in high demand thanks to Malta’s favorable location in the center of the Mediterranean, its attractive business framework, and its competitive tax regime for investors.