Introduction
As Industry Istanbul, we do provide the latest and updated information all around Industry Turkey. Exchange offices are among the authorized entities established in the form of Joint Stock Companies (“JSC”) and permitted to carry out transactions related to foreign currency, precious metals, stones, and goods, according to Decree No. 32 Regarding the Protection of the Value of the Turkish Currency (“Decree No.32”).
The Communiqué on Decree No. 32 (“Communiqué”), which regulates the procedures and principles governing the establishment, activities, branches, obligations, and audit of exchange offices, was published and went into force on January 30, 2018 (No. 30317).
This article will briefly discuss the procedure for establishing an exchange office and the conditions for operating authorization.
Field of Responsibilities
The Communiqué divides exchange offices into two categories: Group A Type Exchange Offices (“Group A”) and Group B Type Exchange Offices (“Group B”) (“Group B”). The Communiqué outlines the types of activities that the groups will partake in. Compared to Group B, it is determined that Group A can engage in a broader range of activities.
The following activities are available to Group B:
- Buying and selling foreign currencies,
- Replacing foreign currency banknotes with smaller or larger versions of the same denomination,
- Buying foreign currency cheques following the Central Bank of the Republic of Turkey’s processes and standards (“Central Bank”),
- Buying and selling raw and standard gold as described in the Communiqué,
- Buying and selling foreign currencies and exchanging them for other foreign currencies through banks, exchange offices, and other institutions that can perform transfers with their customers, as long as the transfer order is issued or the amount is physically delivered within the same business day.
Group A, on the other hand, may participate in the following activities in addition to those stated above:
- Import and export precious stones and metals and conduct associated transactions by applicable regulations and legislation.
- Acting as an agent for electronic money and payment institutions,
- If the Ministry of Treasury and Finance allows it, you can purchase and sell foreign currencies and execute necessary transactions through money machines (“Ministry”),
- Buying and selling foreign currencies with no restrictions or using prepaid cards with a value of up to USD 10,000,
- Export foreign coins or Turkish Lira banknotes overseas if the Ministry approves.
- Exchange offices are not permitted to engage in activities other than those listed in the Communiqué. If officials of exchange offices violate this rule, the license to operate will be revoked, and the Ministry will pursue legal action.
Establishment Requirements
To open and function in Turkey, exchange offices must first receive approval from the Ministry.
For the establishment procedure to take place, several conditions listed in the Communiqué must be met. Exchange offices must be organized as a JSC, with the terms “Exchange Office” for Group A and “Limited Exchange Office” for Group B appearing in the company’s trade name.
Another requirement for forming exchange offices is that they must only carry out the exchange office activities outlined in the Communiqué. Furthermore, Group A’s paid-up capital must be at least 5 million Turkish Liras, whilst Group B’s must be at least 1 million Turkish Liras. Shares must be registered and issued in exchange for money. Each founding partner residing in Turkey, as well as anyone with ten percent (10%) or more shares in the legal entity acting as a founding partner, as well as the company’s general manager, Board members, authorized signatory employees, and internal supervisors of Group A, must meet the qualifications outlined in Article 6 of the Communiqué.
In addition, the company’s Articles of Association must adhere to the norms of legislation governing the safeguarding of the Turkish currency’s value.
Exchange offices that meet the following criteria are eligible for Ministry clearance, and those that receive it must form a joint-stock company (JSC) by the Turkish Commercial Code (“TCC”).
Operating Permission
Exchange offices that have been granted permission to open must wait for the operating license to be granted before they can open. If exchange offices open for business before the operation license is issued, the Ministry will revoke their permission to open.
Within 90 days of receiving the establishment permit, the founders must complete the exchange office’s establishment procedure and apply for an operation license to the Ministry.
If the Ministry certifies the unavoidable circumstances, the time may be extended up to 90 days.
If all of the requirements are completed, the Ministry will issue an operating license. Furthermore, exchange offices must notify the Ministry of the start of their operations within 90 days after receiving their operation license.
Conclusion
In Turkey, there are severe regulations regarding the construction and operation of exchange offices. The Ministry closely monitors the fulfillment of these standards and compliance with the obligations set on exchange offices in the Communiqué. In this regard, to continue operating in Turkey, exchange office founders and executives must ensure that the company is constantly operating following the necessary legislation. Industry Istanbul sources the right information all around Industry Turkey.
Bir yanıt yazın