After Turkish Citizenship: How to Execute Your Exit Strategy When the 3-Year Lock-In Ends

The 3-Year Lock-In: What the Law Actually Says

Under Presidential Decree No. 418, Turkish citizenship granted through the investment pathway under Article 12 of Law No. 5901 is subject to a 3-year lock-in obligation. The legal mechanics differ by pathway: for real estate investors, the General Directorate of Land Registry and Cadastre (TKGM) annotates the Tapu (title deed) with a transfer restriction that prohibits sale, gift, or encumbrance of the property for three years from the date of the Presidential Decree. For bank deposit investors, the BDDK Conformity Certificate obligates the investor to maintain the minimum qualifying deposit for three years from the same date.

A common point of confusion: the three-year period runs from the Presidential Decree — not from the date of investment execution. An investor who transfers USD 500,000 in January and receives citizenship by Presidential Decree in September of the same year begins the lock-in clock in September, not January. This means the effective total period from initial investment to available exit can be materially longer than three years in cases where government processing is extended.

Track One: Real Estate Sale After Lock-In Expiry

When the three-year Tapu restriction expires, the property becomes freely transferable. The TKGM annotation is removed upon application, and the investor regains full legal capacity to sell, transfer, encumber, or gift the property under standard Turkish property law (Medeni Kanun, Turkish Civil Code).

Turak Law provides full legal representation for the sale transaction — the same scope as the original acquisition. This includes: title encumbrance review to confirm the restriction has been formally removed from the registry; coordination with the buyer's attorney on sale contract terms; Power of Attorney representation at the Tapu Müdürlüğü for deed transfer; and capital transfer structuring for repatriation of sale proceeds to the investor's jurisdiction of preference.

Practical note: the Turkish real estate market for CBI-acquired properties — predominantly in Istanbul, Ankara, and coastal zones — has shown sustained demand from successive cohorts of CBI investors. Properties acquired in 2021-2022 at pre-decree-revision prices are now completing their lock-in periods, and the secondary market for these assets has developed liquidity. Turak Law has observed consistent buyer demand from new-entry CBI investors acquiring existing annotated properties from exiting investors, a transaction structure that is legally permissible provided the new buyer commits to the remaining or fresh lock-in as applicable.

Track Two: Bank Deposit Repatriation

For investors on the bank deposit pathway, exit is operationally simpler but requires careful attention to the BDDK conformity conditions. The USD 500,000 deposit — plus interest accrued during the holding period — becomes freely accessible upon the three-year anniversary of the Presidential Decree. The investor may withdraw, transfer abroad, or restructure the funds without restriction from that date.

Interest income generated during the holding period is not subject to the lock-in. Under T.C. Ziraat Bankası's CBI deposit structure (the bank Turak Law primarily coordinates with), interest accrual and periodic withdrawal of interest are contractually available throughout the holding period — only the principal amount equivalent to the qualifying deposit threshold is locked. This is a meaningful benefit for investors who wish to maintain capital productivity during the hold period.

Repatriation of the principal after lock-in requires standard international wire transfer documentation. Under Turkish foreign exchange regulations administered by the TCMB (Central Bank), there are no regulatory restrictions on outbound capital transfer for non-resident investors after the hold period has concluded. The practical steps are: (1) confirm hold-period completion with BDDK documentation; (2) instruct the bank on transfer destination and currency; (3) obtain Turkish bank transfer confirmation for the investor's records and any home-jurisdiction tax filing requirements.

Tax Considerations at Exit

Exit from a Turkish CBI investment has tax implications in two jurisdictions: Turkey and the investor's jurisdiction of tax residency.

In Turkey, the tax treatment of capital gains on real estate sale is governed by the Gelir Vergisi Kanunu (Law No. 193). For properties held more than five years from the acquisition date, capital gains are generally exempt from Turkish income tax for natural persons. For properties sold within five years, gains are subject to Turkish income tax at marginal rates with an indexed cost basis deduction. Bank deposit interest income accrued during the hold period is subject to withholding tax at applicable Turkish rates, which is typically deducted by the bank at source.

In the investor's home jurisdiction, the treatment of Turkish property sale proceeds and repatriated bank deposits varies significantly by country and by the investor's individual tax residency status. Turak Law strongly recommends coordinated advice from a tax advisor in the investor's home jurisdiction prior to executing exit. Turak Law provides the Turkish legal representation and documentation; home-country tax analysis is the responsibility of a qualified advisor in that jurisdiction.

The Exit Strategy Service: How Turak Law Structures the Engagement

Exit Strategy is a dedicated, post-citizenship service available exclusively to existing Turak Law clients and CBI investors who completed their citizenship through other attorneys and now require legal representation for the exit phase. The engagement begins with a case review — confirming the Decree date, the asset status, and the investor's current objectives — and proceeds through a fully documented representation under a fresh Power of Attorney covering the relevant exit transactions.

The service is available on a fixed-fee basis for standard exit transactions (single property sale or standard bank deposit repatriation) and on an hourly basis for complex multi-asset, multi-jurisdiction, or contested exit scenarios. Fee structure is provided at initial consultation.

Investors approaching the end of their 3-year lock-in period — or who have already passed it without executing their exit — are encouraged to schedule a consultation with Av. Abdulsamed Burak Turak to review options and timeline. Exit coordination typically requires 4-8 weeks from engagement to execution, depending on buyer readiness (real estate) or bank transfer processing (bank deposit).