Corporate and M&A

Author: Melissa Balıkçı Sezen

Introduction

The Decree No. 32 on the Protection of the Value of Turkish Currency (“Decree No. 32”) and the Communiqué No. 2008-32/34 on the Decree No. 32 on the Protection of the Value of Turkish Currency (“Communiqué”) prohibit the determination of the contract prices of certain contracts and other payment obligations arising from these contracts in a foreign currency or indexed to a foreign currency.

Article 8 of the Communiqué, titled “Foreign Currency and Foreign Currency Indexed Contracts”, sets out in detail the contracts in which the contract price cannot be determined in a foreign currency or indexed to a foreign currency (and exceptions to these prohibitions). This article also includes provisions regarding whether contract prices and other payment obligations in lease agreements may be concluded in foreign currency or indexed to a foreign currency.

Pursuant to Article 8/2 of the Communiqué, residents of Turkiye may not determine the contract price and other payment obligations arising from such agreements in a foreign currency or indexed to a foreign currency in real estate lease agreements for residential and workplaces located in Turkiye.

Pursuant to Article 8/27 of the Communiqué, if foreign currency-indexed payment obligations were previously determined under these contracts, the parties are obliged to convert the contract price and other payment obligations arising from these contracts into the Turkish currency in accordance with Provisional Article 8 of the Decree No. 32.

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