|Real property lease
|Following lease agreements may be denominated in, or indexed to, a foreign currency
- Lessee is a Turkish resident who is not a Turkish citizen
- Lessee is the branch, representative office, liaison office of a foreign entity, or a Turkish company in which a foreign individual/legal entity directly or indirectly holds 50 per cent or more of the capital, or exercises full or joint control
- Lessee is located in a free trade zone (and the lease relates to free trade zone activities)
- Lease is for the operation of a touristic accommodation facility certified by the Ministry of Culture and Tourism
- Lease relates to a duty-free shop
- Lease agreement is executed in relation to the projects to be undertaken pursuant to foreign currency denominated or indexed tenders or agreements launched/executed by public institutions or for the performance of international treaties.
|Real property purchase
|If the purchaser is any of the exempted parties listed in paragraphs 1 and 2 above or if the property is located in a free trade zone (paragraph 3 above), then the real property purchase agreement may be denominated in, or indexed to, a foreign currency.
|Contracts for work, including construction contracts (eser sözleşmeleri)
|The Previous Communiqué only exempted contracts relating to construction, repair and maintenance of ships.
|The New Communiqué introduces a general exemption for contracts for work involving foreign currency denominated expenditure, without referring to a specific industry or activity.
|One of the exempted type of service agreements related to electronic communication that is initiated in Turkey and concluded abroad (and vice versa).
|Any service agreement (not only those relating to electronic communication)
- initiated in Turkey and concluded abroad (and vice versa) or
- initiated and concluded abroad
is now exempt.
|The Previous Communiqué provided for an exemption for service agreements, if they are executed by the branch, representative office, liaison office of a foreign entity, or a Turkish company in which a foreign individual/legal entity directly or indirectly holds 50 per cent or more of the capital.
|The Amendment Communiqué introduces an additional exemption, which relates to the Turkish companies in which a foreign entity/entities exercises full or joint control.
|The Previous Communiqué provided for the same exemption set out immediately above for employment agreements (i.e. certain entities held or controlled by foreign entities).
|The Amendment Communiqué also introduces the additional exemption (full or joint control) set out above for employment agreements.
An additional exemption has been introduced for employment agreements executed with seamen.
|Sale or lease of construction vehicles
|License and service agreements for software and hardware
|The New Communiqué clarifies that such software and hardware need to be developed abroad to be exempt from the restrictions.
|Agreements executed in relation to transactions to be carried out under the Law on Public Financing and Regulation of Debt Management numbered 4749
|The Previous Communiqué only exempted those agreements to which banks are a party. The aforementioned law regulates, among others, debt assumption by the state and debt securities.
|The New Communiqué brings a general exemption for all transactions to be carried under the said legislation.
| Previous Communiqué
| Amendment Communiqué
|No obligation to convert to Turkish Lira
|Receivables already collected or delayed receivables would not be converted into Turkish Lira.
| The following payments also do not have to be converted into Turkish lira
- deposits collected in real property leases
- negotiable instruments already in circulation
|Conversion into Turkish Lira despite exemptions
|The Previous Communiqué allowed the parties to whom certain exemptions were granted to request the denomination in Turkish Lira of the relevant agreements notwithstanding such exemptions.
|This provision has been removed. This change has been interpreted to provide that exempted parties may no longer force their counterparties to execute their agreements in, or to convert into, Turkish Lira.
|In an effort to prevent indirect indexation to foreign currency, the Previous Communiqué prohibited parties from indexing their agreements to the price of precious metals or commodities, which are priced in a foreign currency in international markets.
|The New Communiqué keeps the general rule, but allows transport related service agreements to be indexed to fuel prices.
|Definition of Turkish resident
|Branches, representation offices, liaison offices or funds owned/operated by Turkish residents outside of Turkey, or foreign companies where Turkish residents hold at least 50 per cent of the share capital or Turkish residents' wholly owned subsidiaries (direct or indirect) were deemed Turkish residents.
|The New Communiqué slightly amends the language by deleting the last part (foreign companies directly or indirectly owned by Turkish residents) and adds that if the agreement is performed outside of Turkey, these entities will not be deemed Turkish residents.
|Certain contracts executed before September 13, 2018 (date of the Presidential Decree)
|Vehicle lease agreements, including construction vehicles, executed before September 13, 2018 were exempted from conversion into Turkish Lira.
|The New Communiqué also allows the following agreements (if executed before September 13, 2018) to remain in a foreign currency
- agreements for the sale of commercial vehicles used for passenger transport
- financial lease agreements for movable or immovable property