Revisions on the Service, Employment and Relevant Agreements Within Turkish Currency Protection Law

As per the Presidential Decree announced on September 13, 2018, there has been uncertainty on the parties located in Türkiye, which were to be prohibited from signing foreign currency-based contracts. The uncertainty has mostly raised a question for the parties that have a casual connection with parties outside Türkiye, have non-Turkish shareholder/ownership, and/or have an obligation of foreign currency-based payments to abroad with the services, consultancy, and relevant agreements.

With the amendments and the Communiqué announced recently, it has been clarified which parties will be exempt from the prohibition.

Within the scope of the Communiqué dated October 6, 2018, announced on Official Gazette numbered 30557 on the Amendment on the Protection of the Value of Turkish Currency Law, the exempt cases which do not require the conversion of service, employment, and all relevant agreements (as per to the Law) to Turkish Lira have been clarified in detail. According to Article 16 on the Amendment, it is possible to have a foreign currency based or foreign currency indexed service and employment agreements for the subsidiaries, representative offices, liaison offices, entities that have a minimum 50% foreign shareholder that is located in Türkiye, along with entities incorporated in free-zone regions.

You can refer to the full Communique in regards to our publication. In addition, to have further information on the employment contracts which are liable to amendments can be viewed from our informative memo..

In case you have queries with the relevant regulation and or need assistance, please contact us.