INTRODUCTION
Due diligence in citizenship by investment is one of the most important steps in acquiring Turkish citizenship through investment. While many foreign nationals focus on the amount of investment or the type of property to be purchased, authorities emphasize the legitimacy of the transaction. The Turkish government, under Law No. 5901 on Turkish Citizenship and the Regulation on the Implementation of the Turkish Citizenship Law, applies strict due diligence rules to ensure that the investment is genuine, transparent, and compliant with both domestic and international anti–money laundering (AML) standards.
LEGAL FRAMEWORK
The legal foundation of due diligence in citizenship by investment rests on multiple sources:
- Law No. 5901 on Turkish Citizenship, which outlines the conditions for acquiring nationality.
- Regulation on the Implementation of the Turkish Citizenship Law, detailing procedures for property purchases, deposits, and other investment methods.
- MASAK (Financial Crimes Investigation Board) Regulations, ensuring that all transactions comply with AML and counter-terrorism financing rules.
- International AML/CFT standards, particularly the FATF guidelines, which Turkey has committed to follow.
These legal instruments collectively ensure that every investment used for a citizenship application is scrutinized for legality, transparency, and authenticity.
SCOPE OF DUE DILIGENCE
The due diligence in citizenship by investment process covers several layers of verification:
- Verification of Source of Funds
- Applicants must prove that the funds used for real estate or other qualifying investments originate from legal sources.
- Evidence includes bank transfer receipts, financial statements, and notarized contracts.
- Background Checks
- Turkish authorities conduct security checks regarding criminal records, international sanctions, or political risks associated with the applicant.
- Interpol databases and international cooperation mechanisms may be used.
- Property and Investment Audit
- Real estate valuation reports are carefully examined to confirm that the purchase meets the USD 400,000 threshold.
- The Land Registry places a three-year restriction (sale ban) on the property to prevent abuse of the program.
COMMON ISSUES IN THE DUE DILIGENCE PROCESS
Despite clear regulations, many applicants face problems due to lack of preparation:
- Insufficient financial documentation: Missing proof of fund transfers or using third-party accounts often raises red flags.
- Mismatched property values: Discrepancies between the purchase price and the official valuation report can result in rejection.
- Undisclosed criminal background: Even minor convictions abroad, if not declared, can affect the credibility of the applicant.
- Transactions with related parties: Buying property from relatives or affiliated companies may lead to suspicions of sham investments.
Each of these issues demonstrates why the due diligence in citizenship by investment process is so rigorous and why applicants must prepare thoroughly.
IMPORTANCE OF PROFESSIONAL GUIDANCE
The complexity of due diligence in citizenship by investment highlights the importance of professional support. Legal advisors and financial experts ensure that documentation is complete, transactions are lawful, and applications comply with both Turkish and international regulations. By guiding applicants through valuation reports, title deed procedures, and banking requirements, professionals minimize risks of delay or rejection.
Moreover, due diligence serves not only to protect the state from unlawful investments but also to protect applicants themselves. A properly documented and transparent application provides long-term legal security, preventing future challenges to citizenship status.
CONCLUSION
In summary, due diligence in citizenship by investment is not merely a bureaucratic formality but a cornerstone of the Turkish citizenship by investment program. It safeguards the integrity of the system, ensures compliance with AML regulations, and protects both the state and foreign investors. Applicants who approach the process with transparency, complete documentation, and reliable legal guidance are more likely to succeed.
Turkish lawyer Ferhat Küle provides legal consultancy on acquiring Turkish citizenship through real estate investment.
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