Alert On Amendments to The Capital Movements Circular
The Capital Movements Circular (“Circular”) has been amended with the letter of Ministry of Treasury and Finance of Republic of Turkey numbered 940051.
The change has been realized within the framework of the general principles of domestic leasing.
Residents in Turkey can obtain foreign currency loans from banks and financial institutions in accordance with the Decree No. 32 on the Protection of the Value of Turkish Currency, yet a firm cannot provide foreign currency loans to another firm.
Although it is possible to carry out the transaction within the same holding or within the group in accordance with the circular in the presence of certain conditions; the company that uses a loan by using a new foreign currency loan will not be able to transfer the loan to another company, even if it is within the same holding or within the group according to the new amendment introduced.
A company with a surplus of funds may provide a foreign currency equivalent of the relevant amount to another company within the same holding with a shortfall of funds, provided that the debiting and enforcement proceeding is made in Turkish Lira.