The turkish lira has suffered one of the worst performances of any currency losing as much as half of its value in the last year but now turkey has offered a proposal to basically pay you to put your money into their currency i’m going to tell you what it’s all about Hi i’m andrew henderson this is nomad capitalist where we help seven and eight figure entrepreneurs and investors legally go where you’re treated best we’ve talked about turkey over the years they have a citizenship by investment program that allows you to buy real estate or put money in the bank or put
Money in bonds or hire a bunch of people you get citizenship in about six months and it’s kind of an interesting alternative to the caribbean countries it’s also a place that has attracted a lot of opinions on both sides we’ve had investors here on this channel who’ve
Said the place is a mess but i’d be buying there i like to invest in messes that are on their way up in the future others have said i would steer clear and what turkey recently did with their citizenship program was said you have to put your money in the lyrics if you’re
Buying real estate in turkey the deal was always you’re buying property in leer that’s how it works but you could you have the flexibility to put your money into a bank account five hundred thousand us dollars worth in dollars or other foreign currency or lyra the dollar is obviously paid a rather low
Rate of interest but the turkish lira has paid a very high rate of interest the last time i checked a couple days ago up to about 14 and a half percent in some of the countries stronger banks that’s an extremely high rate of interest rate because inflation is high
And the currency has lot lost a lot of its value and so even though those interest rates are sky high people generally have been keeping their money in u.s dollars and people who are going for the citizenship by investment program have said if i can’t put my
Money in dollars i’m not interested i’ll buy their real estate or i’ll do something else or i’ll go to a different program but what turkey came out with the end of last year was a new measure where basically they’re going to say hey put your money in the lira and if you
Lose against the us dollar we’re going to actually compensate you now there’s some recent clarifications that came out so this applies to individuals it could also apply to turkish corporations probably not many people watching with a turkish corporation although potentially if you hired people in your turkish corporation as your way to get
Citizenship you could do that but uh individuals were always included and the deal was basically on uh 3 6 9 and 12 month turkish lyric term deposits i was recently at a bank in turkey just a couple days ago and i was asking about this and they said hey it’s
Basically automatic if you have one of these deposits and it’s in lira then you are protected under this new scheme and here’s how the scheme works the idea is that every day the turkish central bank will publish the us dollar billing buying rate at 11 am istanbul time and when your term
Deposit matures they’re going to look at that and say okay you made 14 and a half percent interest i’m giving you kind of a rudimentary explanation here 14 and a half percent interest uh let’s say that the lyric goes down 16 well you are against this daily us
Dollar rate you’re down one and a half percent the central bank will provide the extra funds that you lost to your bank who will top up your account and essentially in u.s dollar terms you have made nothing for those 3 6 9 12 months turkey’s lira has dropped from i mean it was
Three four five not that long ago but a year ago it was at seven had rebounded from being somewhere in the nines rebounded down to seven in early 2021 ran all the way up to not that far away from 20 and then came back to where it’s sitting as i sit here
At about 13 and a half and so as you can imagine i mean you’ve got a lot of issues there i mean someone who is buying stuff i mean prices and lyric terms are constantly going up i just finished a process that involved that and we’re constantly kind of
Recalculating things i was able to save some money on on a renovation over what i expected to pay saved about four grand but certainly in lira terms a lot of the things went up in price because of this exact issue and so i’ve seen this firsthand in a very small way but
The idea is you know for someone who’s adventurous for someone who wants to get citizenship they don’t want to deal with the hassle of owning a property if you wanted to lock up money in a bank account for three years you could do
That you now have to do it in a lira and you might say oh my goodness who would do that uh and maybe you still say that but you know the idea is that if you believe uh that the basically the law they’re passing uh is going to actually work as specified
Your u.s dollar risk should be essentially zero um and so if you see another substantial currency decline the lyric seems to in the last month kind of flattened out again kind of having peaked i think at around 18 came back down partially after they announced this um so this could be potentially an
Opportunity for someone i generally think that the realist adoption if you’re looking for turkish citizenship and again there’s obviously many citizenships to choose from but if you’re looking for citizenship the risk of adoption is 250 thousand dollars you’re probably going to spend more than that by the time you get
Everything appraised and make sure you meet all the qualifications you pay the stamp duty of four percent etcetera the bank deposit option 500 000 so you know 6.6 million lira something like that if you wanted to do that and make for the three years you’re required to keep
The money in there you wanted to gamble that you’re gonna you know the lira is gonna stay flat uh you can make your 14 and a half percent you can make a pretty substantial return now obviously that depends on the layer remaining flat you know but theoretically the the loss
Is as little as uh as zero so interesting perspective that they’re taking uh obviously there are a lot of people who say i don’t want to deal with turkey on the other hand you have a citizenship that really doesn’t require a donation it has lower fees it has a relatively
Easier processing process and perhaps as someone who is saying to have multiple citizenships not just dual but multiple it may be something to add to the mix if you prefer to put money in the bank over real estate or bonds or hiring people for your company this may be something
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