Improving the investment climate and Turkish citizenship

The law published last week envisaging some amendments to the Law No. 5901 on Turkish Citizenship of the Republic of Turkey was generally seen in terms of the lowering of the financial and investment amounts for obtaining Turkish citizenship.

According to the amendments published in the Official Gazette, the fixed capital amount prescribed for qualifying for Turkish citizenship was lowered from 2 million dollars to 500 thousand dollars. The minimum real estate value required for foreigners who own property in Turkey to acquire citizenship was also lowered from 1 million dollars to 250 thousand dollars.

Likewise, the condition of providing employment for at least 100 people, among the conditions for qualifying for citizenship, was lowered to 50 people. In addition, those who deposit at least 500,000 US dollars or the equivalent in TL in banks operating in Turkey for 3 years, and those who invest in government debt instruments, real estate investment fund shares or venture capital investment fund shares, will also be able to apply for Turkish citizenship. The amount previously required for these investments ranged between 1.5 million and 3 million dollars.

"The law was generally seen in terms of this reduction," we said, and in many circles it was wrongly portrayed as the conditions required for Turkish citizenship having been eased in order to provide a new fund.

Yet the law is a very belated regulation that should be considered within the scope of "improving the investment environment in Turkey," which had come onto the agenda long before the recent economic developments.

While the law "on improving the investment environment," which finally came onto the agenda last February because it was so badly needed, was being debated in the Parliament, the then Prime Minister Binali Yıldırım described the regulation as "We will roll out a turquoise carpet for those who want to invest in Turkey."

Truly, Turkey is a country that must attach great importance to attracting investment. It must develop a very special and careful policy on attracting foreign investors. Unfortunately, despite the legal regulations that were the subject of Mr. Yıldırım's statement, Turkey has not reached the desired efficiency, ease and incentive in terms of the investment environment.

The reason is not that the laws enacted are deficient, but on the contrary that the environment in which the matter is applied has not been taken into account at all.

The perspective of any investor who sets out to benefit from those laws enacted today is not taken into consideration; what difficulties he experiences on the path he has set out on for this investment is not taken into account at all.

Yet someone who by chance wants to invest in Turkey encounters at every step a huge bureaucratic coldness and a series of bureaucratic procedures. A single center to follow the investor's affairs cannot be established, bureaucratic procedures cannot be simplified, and the authorities and institutions the investor has to deal with cannot be reduced.

The investor dealing with many institutions is confronted by the interior ministry with its own security sensitivities, by the institutions affiliated with the ministry of environment and urbanization with their own concerns, and by the foreign ministry with yet another worry and face.

Because there is no single office that gives direction to the investor floundering among these institutions and that unites all these procedures, the environment for the investor does not reach the desired efficiency at all.

I have a heap of stories on my desk of people with millions of dollars of investment in Turkey who, when they left Turkey and returned, could not enter the country either because they could not get a visa or because they had committed a visa overstay.

There are those who have had to be cut off from their own investment in this way for months, even years. There are people who in earlier periods fulfilled the million-dollar housing condition for citizenship and applied for citizenship, yet whose request has gone unresolved for years, and there is no accessible process through which they can inquire and follow up on why their requests have not been met. This being so, the "law on improving the investment environment" enacted last year has in a way effectively become a dead letter. There are some measures that must be taken to correct that. The new regulations on Turkish Citizenship made by presidential decree are in a way a necessary measure taken so that this law does not become a dead letter.

Above all, this is a regulation made not so much to attract new investors as to solve at the root the problems of those who, in one way or another, trusted Turkey and invested. Of course, while the problems of the old ones are being solved, the environment will have been made more attractive for new investors.

It is very clear that a new understanding is needed to act on this matter. If improving Turkey's investment environment is a goal, all the institutions of the state that must act together for this goal need to act in coordination on this matter. One institution's working according to its own bureaucratic calendar, tempo and sensitivities, and not caring about the others', leads to regulations becoming a dead letter not only on this subject but on many.

That is why we need new habits (habitus) that will look at such activities operationally and organize all the relevant institutions working together. The presidential system is actually expected to be a solution precisely to these problems

Indeed, this regulation also envisages a commission work within the Ministry of Interior in which five ministries will work together, but in my opinion the Investment Office affiliated with the Presidency and the Ministry of Foreign Affairs also need to participate in this commission. Because if the aim is to improve the investment environment and attract foreign investment, they must not remain outside the process on this matter that concerns both institutions in the first degree.

As Turkey advances toward its 2023 goals, it must adjust the instruments that will cover this road so that they display the speed and efficiency required for this job.