By: mytapu webmaster | July 29, 2020

Turkey Citizenship by Investment CIP CBI- Professional Services for real Estate Investors and for Non-Real Estate Investors in Financial Products: Bank Deposits, Government Bonds, Venture Capital Funds...

July 29 2020  Demand for second passports continues to increase in the changing world we live in. Turkey’s Citizenship by Investment Program ( CBI / CIP ) offers a very attractive solution.... This is the best available program for obtaining a second passport, and from a reputable OECD nation. The investment threshold is set just above the levels required by several Caribbean nations, at $250,000 for real estate, and $500,000 for financial assets (government bonds, bank deposits, venture capital funds, REITs). 

Advantages of Turkey's Citizenship by Investment CIP CBI - Professional Services for Real Estate Investors and for Non-Real Estate Investors in Financial Products: Bank Deposits, Government Bonds, Venture Capital Funds...
Turkey CBI CIP : Maximum Advantage and Multiple Benefits

Turkey’s  CBI / CIP program has clear advantages: 

  • Full rights of a Turkish citizen to public health care, education, and pensions; 
  • No requirement to speak the language; 
  • No requirement to spend any time in the country;
  • No financial disclosure requirements;
  • No taxation on world wide income for a Citizen that does not reside in Turkey for more than 6 months in a 12 month period;
  • Advantaged Residency Pathways to UK and USA;
  • Cheap Convenient International Air Travel Hub; Visa Free Travel to 140 Countries.


Application & Approval Risks are Low, or Zero: 

The eligibility criteria and application procedures are designed so that there is no practical risk of rejection or application failure. The exception may be in the case of the applicant having a past criminal record.

Application and qualification risks for Turkey’s CIP / CBI Program are minimal or none, but the economic risks related to the capital investment required, will require careful consideration.

Investors Recognize Risks & Reality

At first glance investors may have questions about the investment risks. Recognizing the risks and dealing with these realities is the first step to preserving capital wealth…. In this article we look more closely at how to manage and minimize these risks, and protect capital. Wealth preservation requires a realistic ‘eyes-wide-open’ approach…. Pretending the risks do not exist is insulting the intelligence of anyone wise enough to have earned the money to afford the investment. 

Turkey Caught in the Middle of a Changing World

The existence of the risks is due to the fact that Turkey is in the middle of a changing world all around, and caught up in the full spectrum of risks: geo-political , macro-economic, exchange rate, and more....
Down Trends: Newly-Built Residential Real Estate Forward Valuations and Turkish Lira / US Dollar Exchange Rates
Down Trends: Newly-Built Residential Real Estate Forward Valuations and Turkish Lira / US Dollar Exchange Rates

Real Estate has Proven a Poor Investment

Turkish asset values have been suffering as a result. Declines in property values, and declines in the Turkish Lira exchange rate, have combined to result in significant capital loss over the three years since 2017. This is clear in real estate valuations… 
Over-Supply is s key contributing reason....

Real Estate is the Most Costly Choice

In addition, the investment execution risks in real estate are very high, as much as 20%, and hidden. A large proportion of these risks arise from advisors, agents, and participating attorneys they work with, adding hidden commissions and price mark-ups to the real estate assets investors’ purchase.... 
This translates into an immediate capital loss.

For this reason an investment in residential real estate is not the best choice. The capital investment requirement of $250,000 is lower than the alternatives, but the actual cost of investing is much higher. And the cost of holding the investment is higher because real estate requires maintenance, and generating rental income, residential or commercial,  incurs additional ongoing  management expenses …. So buying residential real estate is only sensible for an investor that plans to buy a property in Turkey to use for personal purposes now or sometime in the future. 

Not Just Turkey- Risks Increasing World Wide

From a broader international perspective, it is not only Turkey where the investment environment has more risks than 10 years ago, because the same increases in risk are happening everywhere internationally, and no where is safe. 

For example, a cash deposit in a bank anywhere in the world is no longer the reliable ‘risk free’ solution of just a few years ago. The reasons are two. The first, is that the purchasing power of cash is declining central banks have created more new money in the three months after the health pandemic in early 2020, than created in the years following the financial crisis of 2008. The result is that cash buys less. The second reason, now established by the EU after the Cyprus credit crisis, is that bank deposits are no longer 100% guaranteed in case of bank failure. Instead, depositors may lose a portion of their cash because their claim rights have been placed second behind other bank stakeholders. These risks now require investors’ attention everywhere in the world, not just in Turkey.

First Priority: Wealth Preservation 

Protecting capital and preserving wealth requires focus on managing risks.  This may be an unfashionable concept, because salesmen know they earn more by promoting profit potential…. Investors know risk management comes first, because without it, the profit potential will never come to be.

Manage Risks and Protect Capital

Risk Management is a specialist discipline and requires a formal approach that is different than investment management. Requiring principles embedded in the oversight of policies, practices and procedures applied for protection of investors’ capital wealth. 

Protecting capital wealth can only be done with professional guidance. Undertaken on a Wakalah basis, the formal approach applied by the Advisors at mytapu.com includes a broad and deep understanding of the Turkish circumstance of the last 40 years, within the greater historical, economic, geopolitical, and cultural context.
 
A formal approach works successfully because it is based on continuous analysis, assessment, diligence, & preparation, with economic forecasting to avoid losses and capture gains. 

The structure should be determined by using standard risk management principles including diversification, and full due diligence applicable to the specific situations in Turkey. Using a defensive structure and defensive asset mix is the key. Continuous vigilance and monitoring contributes to near complete 360% risk protection….

Minimising the risks related to the capital investment in Turkey can thus be managed to achieve a solution that is similar to investing anywhere in the world. 

Financial Assets are the Least Costly Choice for Turkey’s CBI / CIP

Another great advantage of  Turkey’s CBI / CIP Program is the choice of assets an investor may choose and select. The alternatives include a direct investment in business, or creation of 50 jobs.  For risk management, the better choice for a CBI / CIP Turkey investment is the range of financial assets: bank deposits, government bonds, and venture capital funds. (REITs may be included provided investors understand the macroeconomic correlations and risks related to the expense mechanics implicit in the structure.) 

Choosing to allocate capital to financial assets has many advantages for risk management, capital protection, and investment performance returns. Including more cost efficient implementation, greater flexibility, more choice, etc. The investment threshold is higher at $500,000 but the cost of making the investment is far lower, at less than 3-4%, compared to residential real estate at 10-20%.

The great advantage of investing in financial assets instead of real estate, is the greater flexibility and greater choice of tools for managing risk. The choice of investment assets should be determined using risk correlations of specific asset classes in Turkey, applied to  the three financial asset types permitted by Turkey’s CIP / CBI Program:
  • Bank Deposits
  • Government Bonds
  • Venture Capital Funds

No Turkish Lira Exchange Rate Risks

The $ 500,000 investment requirement may be met without any investment in Turkish Lira and no TL exchange rate risk. A Professional Advisor using economic analysis and due diligence can minimise risks by designing an asset mix with suitable risk correlations. For example, the asset mix may include foreign currencies, fixed income bonds, gold, and a wider range of potentially better performing assets, via venture capital funds, that may include high technology, film production exports, etc. 


Protecting the Purchasing Power of Capital

The resulting outcome is an asset value performance that minimizes the risks and minimises large changes to the capital value that are visible daily in asset prices due to international economic volatility. This can be achieved by matching and offsetting risk correlations against each other so that the overall outcome is protecting the purchasing power of the capital. This ensures large losses are avoided, thus achieving the number one rule of wealth preservation.

Wealth Preservation by Capital Protection requires Risk Management with Defensive Positioning of the Asset Mix and Risk Correlations
Wealth Preservation by Capital Protection requires Risk Management with Defensive Positioning of the Asset Mix and Risk Correlations

Minimising the full spectrum of risks related to the capital investment can thus be managed to achieve a solution that is similar to investing internationally, anywhere else in the world….

In conclusion, Turkey’s CBI / CIP program offers the great advantages of:

a) Clean and simple qualification and passport acquisition;
b )The best possible zero-taxation of world wide income, for applicant’s spending less than six months in the country annually. 
c) Capital protection of the investment, managed with professional guidance to ensure risks of economic uncertainty are minimized . 
d) Easy access to global air travel from Istanbul’s major flight hub ensures travelling convenience. 

These advantages, in addition to the comparatively low capital investment requirement, rank Turkey’s CBI / CIP Program most favorably to other nations globally.

Learn more by email to info@mytapu.com with the subject line

 'CBI Financial Assets' and  include a WhatsApp or Viber number to receive a complimentary call back…


Advising and Transacting more than $5 billion in Investments in Turkey for more than 3,000 International Investors

since 1989...



#CBI #CIP #Turkey #Citizenship #passport #2ndPassport #WealthEconomics #costbenefit #capital #risk  #investment #financialassets #reits #bankdeposits, #governmentbonds, #venturecapitalfunds. #citizenshipbyinvestment

Additional Reading for Turkey's CBI / CIP Investors:

The True Cost of Citizenship by Investment in Turkey, for Investors’ Capital AND for Advisory Consultants Brand Value….



Additional Reading for Residential Real Estate Buyers:

Residential Property Investors Tool-Kit for Turkey

Property Finders Service Istanbul and Coastal Turkey,

Citizenship Investment in Turkey 

Conveyancing

The One Source for Every Turkish Mortgage

Legal Services for Property Matters in Turkey

Advice for Property Matters in Turkey 

Valuations

Property Price Histories in Turkey


 Why Istanbul Lifestyle Retains its Allure for Real Estate Investors…


Keep informed about property matters in Turkey, with articles like this one…sign-up for our periodic Newsletter by email...


Inquire today to learn more by email to info@mytapu.com with the subject line

 'CBI Financial Assets' and  include a WhatsApp or Viber number to receive a complimentary call back…

 

At mytapu.com our policy is to ensure our clients are fully informed, so that they may make fully informed decisions- this helps to ensure better outcomes all around. 

 

Building Trusted Relationships is Building Our Business...!


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