A Simple Guide for Foreign Exchange Restrictions in Contracts in Turkey

In general, the contracts that cannot be made in/indexed to foreign exchange are as follow:

1. Lease and Sales Contracts regarding real estate located in Turkey

Exceptions:

Contracts in which the following persons are parties to as buyer or tenant; (i) non-citizen residents (ii) the companies in which the non-residents hold minimum 50% of the shares, non-resident’s branches, representation offices, offices, liaison offices (iii) companies that are located in free zone

Contracts regarding the leasing of accommodation facilities that are licensed by the Ministry of Culture and Tourism in order to be operated

Lease Contracts regarding duty-free shops

Lease and Sales Contracts regarding movables excluding those regarding vehicles.

Sales contracts regarding software produced abroad/License and service contracts regarding hardware and software produced abroad

Financial Leasing Agreements

2. Labor Contracts

Exceptions:

Contracts that are going to be performed abroad

Contracts in which seamen are parties to Contract in which non-citizens but residents are parties to

3. Service Agreements

Exceptions:

Agreements in which non-citizens are parties to

Agreements made for transit trade, exports, sales and deliveries which are rendered as    foreign exchange earning services

Agreements concluded for services to be performed abroad

Agreements that started in Turkey and terminated abroad or agreements that started abroad and terminated in Turkey.

Agreements in which the branches, representation offices, offices, liaison offices of non-residents and the companies that the non-residents hold minimum 50% of shares. These companies can also be located in free zone or in Turkey

Below contract types are allowed to be made in/indexed to foreign exchange:

• Agreements in which the state institutions and organizations or companies of Turkish Armed Forces are parties to

Exceptions: Lease and Sales Agreements regarding real estate

• Agreements made by companies/contractors that are in control and their counter parties with third parties, provided that these agreements are proposed for execution of tenders, contracts and international agreements including state institutions and organizations

Exceptions: Lease and Sales Agreements regarding real estate

• Agreements concluded for affairs to be performed pursuant to law on the regulation of public financing and debt management

Exceptions: Lease and Sales Agreements regarding real estate

 HERDEM Attorneys at Law