The Impact of Turkish Currency Regulations on Foreign Businesses

Foreign investors and multinational corporations operating in Türkiye face an increasingly complex landscape of currency regulations that directly affect their business operations, profitability, and compliance obligations. As Turkish authorities continue to refine monetary policies to stabilize the economy and protect the Turkish Lira, understanding these regulations has become paramount for successful business operations in the country.

The landscape of Turkish finance is undergoing a historic transformation. For international companies, understanding the nuances of Decree No. 32 on the Protection of the Value of Turkish Currency is no longer just a compliance task—it is a strategic necessity.

At Akkas CPA & Turkish Accounting Firm, we have guided global enterprises through the complexities of the Turkish legal system since 2017. Below, we break down the seven most critical impacts of currency regulations on foreign-owned entities this year.

Table of Contents

Understanding Türkiye’s Currency Control Framework

Türkiye maintains a sophisticated currency regulation system designed to monitor foreign exchange flows, prevent capital flight, and ensure economic stability. The Central Bank of the Republic of Türkiye (CBRT) and the Ministry of Treasury and Finance jointly oversee these regulations, which have evolved significantly over recent years in response to economic pressures and global market dynamics.

The foundation of Turkish currency regulations rests on the Protection of the Value of Turkish Currency Law and subsequent decrees issued by the President and the CBRT. These regulations govern foreign exchange transactions, cross-border payments, import-export operations, and domestic transactions involving foreign currencies.

1. The 2026 Legal Reset: The Constitutional Court Ruling

In a landmark decision that will define the business climate for 2026, the Turkish Constitutional Court recently overturned the core legal basis for many existing currency controls. The Court ruled that the broad authority previously granted to the President to regulate currency via decree was unconstitutional, emphasizing that such restrictions must be based on specific parliamentary legislation.

The transition period concludes on July 15, 2026. Until then, current regulations remain in force, but businesses should prepare for a new legislative framework. This shift is expected to bring greater legal certainty and potentially more liberalized capital movement rules, provided the Parliament enacts a business-friendly replacement law.

2. Liberalization of Movable Goods Contracts

A significant relief for foreign investors in 2025 and 2026 is the removal of the prohibition on foreign currency (FX) payments for movable goods. Previously, even if a contract price was set in USD or EUR, the actual payment between Turkish residents (including foreign-owned subsidiaries) had to be made in Turkish Lira (TRY).

As of the latest updates, companies can now both denominate and execute payments in foreign currency for the sale of most movable goods (excluding vehicles). This drastically reduces exchange rate risk for manufacturing and trading firms that rely on imported raw materials or sell high-value machinery within Türkiye.

3. Strict Prohibitions: Where Turkish Lira Remains King

Despite liberalization in trade, the “TRY-only” rule remains strictly enforced for specific operational areas. Foreign businesses must ensure that their contract drafting & review processes account for the following, which must be paid in Turkish Lira:

• Real Estate: Both sales and lease agreements between residents.
• Employment: Salaries for Turkish residents must be paid in TRY, though exceptions exist for certain “foreign currency earning” service exports.
• Services: Local consultancy, legal, and software services typically fall under the TRY payment mandate.

4. Mandatory Export Revenue Conversion

One of the most debated regulations is the requirement for exporters to bring their revenues back to Türkiye. Currently, a significant portion of foreign currency earned from the export of goods must be sold to the Central Bank of the Republic of Türkiye (CBRT) via a local bank.

For 2026, while the mandatory conversion percentage is subject to adjustment based on economic stability, the infrastructure for this process is highly digitized. Companies must prioritize accounting & bookkeeping to ensure every Export Price Acceptance Certificate (İBKB) is correctly filed to avoid heavy administrative fines.

5. Credit Restrictions and FX Cash Asset Limits

The Banking Regulation and Supervision Agency (BDDK) continues to monitor the “FX cash mountain” held by large corporations. Companies subject to independent audits may face restrictions on borrowing in Turkish Lira if their foreign currency cash assets exceed certain thresholds (e.g., 15 million TRY or a percentage of total assets/sales).

This regulation aims to prevent “currency hoarding” and encourages companies to use their FX reserves for operations rather than speculative holding. This makes bank account opening and liquidity management a high-stakes task for the CFOs of foreign subsidiaries.

6. Repatriation of Profits and Dividends

A common concern for investors is the ability to send profits back to the parent company. Under the Foreign Direct Investment Law, Türkiye remains committed to the freedom of transfer.

Foreign investors can freely repatriate:

1. Net profits and dividends.
2. Proceeds from the sale or liquidation of a company.
3. Compensation or interest payments.

However, banks will verify that all taxes—specifically the 15% dividend withholding tax (which may be lower under Double Taxation Treaties)—have been settled. Effective corporate governance ensures that these transfers are smooth and fully compliant with Central Bank monitoring systems.

7. Governance and Annual Reporting Requirements

With the increased scrutiny on currency flows, the role of the Board of Directors has expanded. Accurate annual report filing is now a primary tool for demonstrating compliance with Decree No. 32.

Failure to accurately report FX-indexed liabilities or unauthorized currency payments can lead to the “invalidity” of contracts and personal liability for board members. Companies are increasingly turning to Turkish company formation lawyers to audit their internal governance structures against these evolving financial bylaws.

Choosing the Right Business Structure

The impact of currency regulations often depends on your entity type. Whether you are pursuing a limited liability company formation (Ltd. Şti.) or a joint stock company formation (A.Ş.), each structure carries different reporting burdens and capital requirements. For instance, Joint Stock Companies (A.Ş.) offer more flexibility for large-scale capital movements and are often preferred for major foreign investments.

Contact us for Turkish Currency Regulations

While the Turkish currency landscape is complex, it is also rich with opportunity for those who understand the rules of engagement. From the initial company formation in Türkiye to the day-to-day management of international transfers, compliance is the bedrock of long-term success.

Contact Akkas CPA & Turkish Accounting Firm Today Since 2017, our firm has served as a bridge for international businesses entering the Turkish market. Our team of experienced attorneys provides comprehensive support in multiple languages, ensuring your investment is protected against regulatory volatility. Whether you need assistance with incorporation, regulatory compliance, or financial litigation, we are here to help.