The Establishment Regime for Precious Metal Refineries

Those who wish to establish and operate a precious metal refinery must obtain from the Ministry of Treasury and Finance, in turn, an establishment permit (kuruluş izni) and an operating licence (faaliyet izni). The establishment permit is a precondition for registering the company's legal personality; the operating licence allows the facility to actually begin refining operations. These permits require minimum paid-in capital of TRY 35,000,000, an annual production capacity of ten tonnes for gold and silver, collateral equal to one tenth of the paid-in capital and, for gold, a fineness of 995 parts per thousand.

The legal basis of the regime is Law No. 1567 on the Protection of the Value of Turkish Currency (1567 sayılı Türk Parasının Kıymetini Koruma Hakkında Kanun; “Law No. 1567”) and Decree No. 32 on the Protection of the Value of Turkish Currency (32 sayılı Karar; “Decree No. 32”), which entered into force within the framework of that Law. The Ministry of Treasury and Finance regulates the technical and administrative details under the Communiqué (tebliğ) on Precious Metal Standards and Refineries (Communiqué No. 2023/1), published in the Official Gazette of 23 February 2023. Proof of the financial strength of founders and shareholders is governed by the Circular (genelge) on Proof of Financial Strength (KMR-2024/2).

What Is the Difference Between an Establishment Permit and an Operating Licence?

A refinery permit is not a single permit. The establishment permit is the first administrative authorisation obtained from the Ministry to establish a refinery whose products can be bought and sold in Türkiye and exported abroad. It only enables the registration of the articles of association and the incorporation of the company as a joint stock company; it does not give the founders authority to refine.

The operating licence, by contrast, is the final authorisation granted so that a company that has completed its incorporation procedures can begin melting and purifying standard or non-standard precious metals. Separate applications are made to the Ministry for gold, silver, platinum and palladium, and a separate fee is charged for each. For a company that meets the requirements and passes the commission's inspection, the Ministry issues a Refinery Operating Licence Certificate. Companies without an operating licence are prohibited from using expressions in their trade names or advertisements that give the impression that they carry out refining.

How Does the 180-Day Rule Work?

The founding shareholders of a refinery granted an establishment permit must complete the incorporation procedures and apply to the Ministry for an operating licence within 180 days of the date of the establishment permit. The establishment permit of those who do not apply within this period is deemed revoked.

The period is not absolute. Provided that force majeure or justified circumstances are substantiated, that is, proven by an official document, the Ministry may extend the period by up to 180 days; if the situation continues, it is authorised to increase this additional period to up to twice its length.

There is also a personal bar: persons who, within the last year as of the application date, held a shareholding in a refinery whose operating licence was revoked by the Ministry on grounds relating to the supply chain compliance report or the independent assurance report (Communiqué, Article 18(1)(ç)), or who were its chair or a member of its board of directors, its general manager, its internal control and supply chain compliance officer or an employee with signing authority, may not take part in the application. Separately, a refinery and its shareholders whose operating licence was revoked for production in breach of technical requirements and standards or for activity in breach of Article 9 may not make a new application for five years, and those whose licence was revoked because the review under Article 16(6) found that they did not meet the technical requirements may not do so for one year (Article 18(3)).

What Are the Capital and Collateral Requirements?

The paid-in capital must be at least TRY 35,000,000, paid in cash and free from any sham arrangement, that is, any secret agreement. All shares must be registered, that is, issued in the holder's name, and must be issued for cash.

The collateral is not a fixed amount but a ratio: an amount corresponding to one tenth of the paid-in capital is deposited with a state-owned bank, or an unconditional letter of guarantee of indefinite duration for the same amount is obtained from a state-owned or privately owned bank and submitted to the Ministry. For a refinery established with the minimum capital, this amount corresponds to TRY 3,500,000; as the capital increases, so does the collateral.

What Are the Capacity and Fineness Thresholds?

For an operating licence, the facility's annual refining capacity must be at least ten tonnes of gold for a gold refinery, at least ten tonnes of silver for a silver refinery and at least 1.5 tonnes for platinum and palladium refineries.

The minimum fineness of the standard precious metals to be produced is 995 parts per thousand for gold, 99.9% for silver and 99.95% for platinum and palladium.

Refineries must stamp the bars they produce with the fineness hallmark, their own emblem or stamp and the fineness; depending on the weight, the date and gross weight are shown, and depending on the metal, the marking GOLD/AU, SILVER/AG, PLATINUM/PT or PALLADIUM/PD. In addition, the standard unprocessed and minted precious metals produced must be registered in the Precious Metals Tracking System (KMTS): each product's producer, date and place of production, weight, fineness and serial number are marked on the product with a unique code provided by the General Directorate of Mint and Stamp Printing House (Darphane) and recorded under the same code.

What Should Be Done to Avoid Loss of Rights?

• Structure the company as a joint stock company, with the word “refinery” in its trade name and with all shares registered and issued for cash.
• Set the paid-in capital at no less than TRY 35,000,000.
• Obtain the establishment permit by submitting to the Ministry a file containing the founders' criminal record, tax debt and financial strength documents.
• Make sure that no founder has held a position or shareholding, within the last year, in a refinery whose operating licence was revoked.
• Complete the incorporation procedures and apply to the Ministry for an operating licence within 180 days of the date of the establishment permit; if you cannot make it in time, document the force majeure and request an additional period before the time limit expires.
• Have one tenth of the paid-in capital blocked at a state-owned bank, or submit an unconditional letter of guarantee of indefinite duration for the same amount.
• Set up a facility that meets the sector's capacity and fineness thresholds, and have an authorised assay office (ayar evi) registered within the facility for analysis.
• Register every product you produce in the KMTS; unregistered products cannot be sold in Türkiye.

Warning. The information in this article is for general information purposes and does not constitute a legal opinion. Foreign exchange and precious metals legislation is a frequently changing area; the amounts, rates, thresholds, time limits and dates in this article may change in line with the legislation in force. Verify the latest version of the legislation before every application and transaction. Current texts are available at mevzuat.gov.tr.

Source: Law No. 1567 · Decree No. 32 · Communiqué No. 2023/1, Articles 7, 8, 10, 11, 13 and 18 (Official Gazette of 23 February 2023, No. 32113; as amended by 2023/2 and 2024/1) · Circular KMR-2024/2

Related page: Refineries