In Turkey, the use of foreign currency in commercial contracts is subject to legal restrictions that are often misunderstood by international investors and business owners. While contracts denominated in USD, EUR, or other currencies were common before 2018, a Presidential Decree introduced significant limitations on the use of foreign currencies in domestic transactions. Today, certain agreements must be denominated exclusively in Turkish Lira (TRY), unless specific exemptions apply.
At our Turkish Law Firm, we help foreign clients structure enforceable and compliant commercial contracts in Turkey. Our team of English speaking Turkish lawyers advises on TL-based contract requirements, identifies applicable exemptions, and drafts bilingual agreements that align with Turkish Central Bank and Ministry of Treasury regulations. Recognized as a best lawyer firm in Turkey for contract law and foreign investor representation, we ensure that clients avoid fines, nullity claims, and litigation by staying ahead of compliance risks.
What Types of Contracts Are Subject to TL Currency Requirements?
According to Presidential Decree No. 32 and the accompanying Communiqué by the Ministry of Treasury and Finance, parties residing in Turkey are prohibited from using foreign currency in specific types of contracts, including:
- Real estate lease agreements (residential and commercial)
- Employment contracts
- Service contracts between Turkish residents (consulting, legal, software, etc.)
- Construction contracts and sales of real estate
This means that unless an exemption applies, contract amounts, invoices, and payment obligations must be in Turkish Lira. Our Istanbul Law Firm reviews contracts for currency compliance and drafts alternative provisions where necessary. As a highly experienced Turkish Law Firm in commercial transactions, we ensure that business operations involving foreign investors do not inadvertently violate local currency laws. Our English speaking Turkish lawyers also advise on re-valuation clauses and arbitration in multi-jurisdictional disputes involving currency control issues.
Exemptions: When Foreign Currency Contracts Are Still Allowed
Despite the general rule requiring Turkish Lira in commercial transactions, several important exemptions allow parties to use foreign currency in Turkey. According to the Communiqué issued by the Ministry of Treasury and Finance, the following cases are exempt from the TL obligation:
- Contracts involving at least one party who is not a Turkish resident
- Export, import, and transit trade contracts
- Transactions involving free zone companies or offshore services
- Contracts subject to foreign law or settled abroad
- Public-private partnership projects and government-authorized transactions
Our Turkish Law Firm reviews all parties’ legal status, contract content, and payment structure to determine if these exemptions apply. For example, if a foreign shareholder is party to the contract or if services are performed entirely abroad, foreign currency may be permissible. As a best lawyer firm in Turkey for cross-border contract structuring, we ensure our clients rely on defensible exemptions—not mere assumptions. Our English speaking Turkish lawyers prepare exemption statements and attach them to agreements to preempt tax audits or disputes.
What Happens If You Use Foreign Currency Illegally in a Contract?
If parties in Turkey use foreign currency in a contract that is not exempt under the law, the contract may be considered partially invalid. Courts may refuse to enforce price terms, and tax authorities may impose administrative fines. The Ministry of Treasury has also issued warnings that invoices or accounting records based on illegal foreign currency agreements may be disqualified for tax deductions or reimbursement.
At our Istanbul Law Firm, we assist companies in identifying contracts at risk and converting them into legally compliant Turkish Lira frameworks. If litigation has already begun, we defend clients against contract nullity claims or seek to preserve contractual intent through judicial adaptation. Our English speaking Turkish lawyers also represent clients in lawsuits where currency disputes threaten performance, pricing, or enforcement. Working with a Turkish Law Firm familiar with Ministry decisions and Yargıtay precedents prevents costly surprises.
Can Currency Disputes Be Resolved in Court?
Yes. If contract enforcement becomes difficult due to currency instability or legal non-compliance, Turkish courts may allow the parties to file a contract adaptation lawsuit (uyarlama davası) or pursue declaratory relief to confirm the applicable legal tender. These lawsuits are particularly common when long-term lease or consultancy agreements were originally signed in USD or EUR but must be adapted to TL due to the Presidential Decree. Businesses also request court intervention when exchange rate volatility disrupts commercial balance or unfairly benefits one party.
Our Turkish Law Firm represents clients in adaptation proceedings and currency-related contract litigation across Turkey. As a best lawyer firm in Turkey for commercial contract enforcement, we combine legal strategy with financial acumen to propose balanced solutions in court. Our English speaking Turkish lawyers prepare expert reports, submit alternative payment schedules, and help preserve business relationships through lawful renegotiation.
Also read: contract enforcement and litigation strategy in Turkish commercial law
Is Foreign Currency Allowed in Arbitration and International Contracts?
Yes. When a commercial contract is governed by foreign law or refers disputes to international arbitration, Turkish currency restrictions generally do not apply. The Turkish Supreme Court (Yargıtay) has confirmed that foreign currency clauses are enforceable when the legal relationship includes a cross-border element, such as one party being based abroad or services performed outside Turkey. In such cases, parties may freely choose governing law, currency of payment, and dispute resolution forum.
Our Turkish Law Firm drafts arbitration clauses that preserve foreign currency payment obligations, and we regularly represent foreign clients in arbitration centers such as ICC, ISTAC, and LCIA. As a best lawyer firm in Turkey for international contracting, we also provide expert opinions on currency clauses and enforceability under Turkish law. Our English speaking Turkish lawyers ensure that contract language meets both investor expectations and domestic enforceability requirements.
Frequently Asked Questions (FAQs)
- Can I sign a USD contract with a Turkish company? Only if you or the services are located abroad, or an exemption applies.
- Are lease agreements allowed in foreign currency? No, unless exempt (e.g. free zone tenant, foreign landlord, export activity).
- What happens if I ignore the currency rule? Contracts may be partially invalid and subject to administrative fines.
- Do tax authorities check this? Yes. Foreign-currency invoices and TL declarations must align.
- Is there a way to re-adapt contracts? Yes. Contractual revision or court adaptation (uyarlama davası) may be filed.
- Can I still choose English as the contract language? Yes. Language is flexible; currency is regulated.
- Do I need a lawyer? Yes. A Turkish Law Firm ensures your commercial contracts are enforceable and compliant.
Draft Contracts with Currency Compliance by a Turkish Law Firm
Foreign currency usage in Turkish commercial contracts is no longer unrestricted. Missteps can lead to unenforceable agreements, denied tax deductions, or even regulatory sanctions. Whether you are negotiating a lease, licensing deal, or professional service contract, currency compliance is a key component of legal enforceability.
At our Istanbul Law Firm, our English speaking Turkish lawyers provide comprehensive legal support for cross-border and domestic contracts. As a best lawyer firm in Turkey for commercial law, we protect your interests with compliant, enforceable, and investor-ready contract strategies.