The recent removal of the KKM (currency protection) has eliminated the safeguard that previously covered bank deposits for foreign investors in Turkey. With the protection gone, the risk profile of cash‑based investments has risen sharply, prompting many advisors to steer investors toward real‑estate projects instead.
Why bank deposits are now riskier
- KKM lifted – no longer any currency‑protection for bank deposits.
- The original scheme offered only a 2‑year protection on KKM, while most investment terms are 3 years.
- Recent market volatility, exemplified by the Turkish LERA index dropping 100 % overnight, shows how quickly deposit values can erode.
Real‑estate remains the preferred path
- The Turkish citizenship‑by‑investment program requires investment first, application later.
- If the investment is deemed fraudulent, the citizenship application is automatically blocked.
Scams that have led to revocations
- 451 investors had their citizenship revoked after participating in a scheme where they paid money at a title‑deed office and received a lump‑sum cash refund in the same office.
- This practice was classified as defrauding the government and directly violated the program’s requirements.
How to avoid fraud
- Work with reputable law firms rather than relying on real‑estate agents, who may prioritize selling property over protecting the investor’s interests.
- Choose established construction companies and real‑estate investment trusts (REITs). One example is GIO, a Turkish REIT with strong corporate governance.
- There are 30–31 REITs operating in Turkey; reputable ones already have independent valuations in place, reducing the chance of disputes.
Practical steps for investors
- Engage a qualified law firm that specializes in citizenship‑by‑investment cases.
- Select a project backed by a well‑known developer or REIT with transparent valuation reports.
- Verify the investment’s compliance with the citizenship program before committing funds.
- Avoid cash‑back schemes at title‑deed offices; any arrangement that promises a refund in exchange for the initial payment is likely illegal.
Following these guidelines helps ensure that the investment satisfies Turkish authorities, minimizes the risk of citizenship denial, and protects the investor’s capital in a market where currency protections have been removed.
