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Legal Alerts

PPP Exception to the FX Loan Ban

Legal Alerts
Banking & Finance
Financial Institutions


Recent Development

With the amendment introduced to the Capital Movements Circular on December 8, 2020 (“Amendment“), the Republic of Turkey’s Ministry of Treasury and Finance (“Ministry”) introduced a new exception to the FX loan ban which applies to Turkish residents who have no FX income.

What Does the Amendment Say?

The Capital Movements Circular prohibits the use of domestic or foreign FX loans by Turkish residents who do not have FX income. An exception to this ban is the ability of Turkish residents who conduct projects under the public-private partnership (“PPP”) model (“Incumbent Company(ies)”) to utilize FX loans, even if they do not have FX income.

With the Amendment, the Ministry decided to grant another exception to the Turkish resident legal person shareholders of the Incumbent Companies from the FX loan ban. In order to benefit from this exception, the FX loans to be utilized by the shareholders must be injected to the share capital of the Incumbent Company.

The Use of FX Loans by Shareholders

  • The following documents will need to be presented to the lender or intermediary bank for the use of FX loans by the shareholders:
  1. A copy of the Trade Registry Gazette evidencing the establishment of the Incumbent Company.
  2. The original pages of the PPP agreement evidencing the parties, subject, consideration and date of the PPP agreement, bearing the parties’ signatures, and a letter of approval from the relevant public institution evidencing the agreement consideration.
  3. The capital increase resolution of the Incumbent Company, or the written representation of the shareholder stating that the proceeds of the loan will be added to the share capital of the Incumbent Company.
  • The FX loan cannot exceed the amount stated in the capital increase resolution or the written representation of the shareholder.
  • If the loan is obtained from abroad, the proceeds of the loan amount will be frozen by the intermediary bank until the presentation of documents evidencing the capital increase.The lender or intermediary bank will transfer the proceeds of the loan amount to the account of the Incumbent Company upon the presentation of the evidence from the trade registry that the capital increase is registered.


The amendment introduces a new opportunity of accessing FX loans for the development of PPP projects.