Managing Currency Risk and Interest Rates on Unpaid Foreign-Currency Invoices Under Turkish Law (2026 Updated Guide)

Learn how businesses can manage exchange-rate risk, default interest, payment claims and enforcement of unpaid USD, EUR and other foreign-currency invoices under Turkish law.

Unpaid foreign-currency invoices can create substantially greater financial exposure than ordinary overdue receivables denominated in local currency. When an invoice is issued in USD, EUR, GBP or another foreign currency and the debtor delays payment, the creditor may face two separate issues: recovery of the principal debt and the financial consequences of the delay. Exchange-rate movements can materially change the local-currency value of the receivable, while the applicable interest regime can depend on the contract, nature of the commercial relationship, currency of the debt, default date and manner in which the claim is pursued. Foreign companies doing business with Turkish counterparties should therefore avoid treating an unpaid foreign-currency invoice as a simple accounting problem.

Can a Foreign-Currency Invoice Be Collected in the Same Currency in Turkey?

Potentially, yes. The starting point should be the underlying contract and the legal character of the foreign-currency obligation. The creditor should determine whether the debt is validly denominated in foreign currency and whether any mandatory rules affecting foreign-currency contracting apply to the particular transaction.

The invoice alone should not be examined in isolation. Purchase orders, framework agreements, delivery documents, correspondence and payment history can all become important.

The Contract Should Be Reviewed First

Before commencing enforcement, identify:

• contractual currency;
• payment date;
• applicable interest clause;
• default provisions;
• governing law;
• jurisdiction or arbitration clause;
• exchange-rate provisions;
• tax allocation;
• payment location; and
• security or guarantee arrangements.

These provisions can materially affect the recovery strategy.

Invoice Currency and Contract Currency Should Be Consistent

A USD invoice issued under a contract requiring payment in another currency may create a dispute.

The creditor should therefore establish why the invoice was denominated in the relevant currency and whether the debtor accepted that arrangement.

When Does the Debtor Become Late?

Determining the default date is essential because interest calculations frequently depend on when default legally begins.

The due date stated on an invoice may be important, but the complete contractual relationship should be reviewed. Depending on the circumstances, contractual maturity, statutory rules or formal notice can affect the analysis.

Send a Proper Payment Demand

Where appropriate, the creditor should issue a written demand identifying the invoice, principal amount, currency, maturity date and payment requested.

The notice should preserve rather than accidentally restrict the creditor’s rights.

Do Not Convert the Claim to Local Currency Without Strategy

One of the most important decisions concerns whether the creditor should pursue the foreign-currency obligation itself or seek its local-currency equivalent where legally available.

This decision can materially affect exchange-rate exposure.

Exchange Rates Can Change the Economic Value of the Claim

Suppose a foreign company is owed USD 500,000. If the debtor delays payment for a substantial period, the local-currency equivalent can change significantly.

A creditor that fixes its claim in local currency prematurely may therefore face a different economic outcome from a creditor whose legally enforceable claim remains denominated in the contractual foreign currency.

The Correct Conversion Date Can Become a Dispute

Where conversion into local currency becomes legally relevant, the applicable date and rate should be determined according to the legal basis of the claim and procedural position.

Do not assume automatically that the invoice date, maturity date, enforcement date or payment date will always control.

Interest and Exchange-Rate Loss Are Different Issues

Businesses often treat currency depreciation and default interest as if they were the same form of compensation.

They are not necessarily identical.

Interest compensates for delayed payment according to the applicable legal framework, while exchange-rate consequences arise from the denomination and timing of the monetary obligation.

What Interest Rate Applies?

There is no single answer applicable to every foreign-currency invoice.

The analysis can depend on whether the parties agreed on interest, whether the relationship is commercial, the currency involved, the nature of the default and any mandatory limitations applicable to the particular transaction.

Contractual Interest Should Be Examined Carefully

If the agreement contains an interest clause, determine whether it addresses ordinary interest, default interest or both.

The wording should also be checked for the relevant currency and calculation method.

Excessive Contractual Interest Can Create Disputes

A contractual clause should not automatically be assumed enforceable exactly as written. Mandatory provisions and limitations under Turkish law may affect the outcome.

This becomes particularly important where the contract applies very high monthly rates or compound calculations.

Foreign-Currency Debts Require Separate Interest Analysis

The interest analysis for a foreign-currency receivable should not automatically be copied from a local-currency commercial debt.

The creditor should identify the legal rule applicable to the particular foreign currency and contractual relationship.

Commercial Transactions Can Have Special Consequences

Where both parties are commercial enterprises and the debt arises from a commercial transaction, commercial-law rules concerning late payment may become relevant.

The parties’ status and the nature of the transaction should therefore be documented.

Compound Interest Should Not Be Assumed

A creditor should not simply capitalize unpaid interest every month unless there is a valid legal basis for doing so.

The treatment of interest-on-interest requires separate analysis.

Partial Payments Must Be Recorded Correctly

If the debtor makes several partial payments, keep precise records showing:

• payment date;
• amount;
• currency;
• bank charges;
• payment description; and
• invoice to which the payment was allocated.

Incorrect allocation can later create substantial disagreement about remaining principal and interest.

Bank Records Are Critical Evidence

Preserve SWIFT messages, bank statements, payment instructions and returned-transfer information.

These documents can prove previous payment practices and the currencies actually used between the parties.

Exchange-Rate Clauses Can Reduce Future Disputes

For new contracts, businesses should specify clearly what happens if payment is delayed.

The agreement can address the payment currency, conversion mechanism where applicable, reference rate, default consequences and bank expenses.

Currency Hedging and Legal Recovery Are Separate

A company may use commercial hedging instruments to manage currency exposure, but this does not replace legal protection of the underlying receivable.

Finance and legal teams should coordinate their strategies.

Foreign Exchange Restrictions Should Be Checked

Turkey has rules that can restrict or regulate foreign-currency denomination for certain categories of domestic contracts.

Before relying on a foreign-currency clause, determine whether the particular transaction falls within a permitted category or an applicable exception.

International Transactions Require Separate Review

Cross-border sales involving a foreign seller and Turkish purchaser can present a different legal framework from purely domestic transactions between Turkish residents.

The parties should not assume that restrictions applicable to one type of contract necessarily apply identically to another.

What If the Debtor Claims the Exchange Rate Made Payment Impossible?

Ordinary currency fluctuation does not automatically extinguish a payment obligation.

However, substantial economic changes can sometimes lead debtors to raise contractual adaptation, hardship or similar defenses depending on the facts and contract.

Such defenses should be evaluated individually.

Can the Creditor Start Enforcement Proceedings?

Potentially. Depending on the nature of the documents and claim, the creditor may pursue Turkish enforcement procedures or litigation.

The correct route depends on whether the debt is disputed and what documentary evidence exists.

The Debtor May Object to Enforcement

If ordinary enforcement proceedings are initiated and the debtor objects, further proceedings may be necessary to overcome the objection.

This makes documentation particularly important.

Preserve Evidence of Delivery

An invoice does not always prove that the underlying contractual performance occurred.

Foreign suppliers should preserve purchase orders, shipping documents, delivery records, customs documentation, acceptance certificates and commercial correspondence.

Electronic Correspondence Can Be Important

Emails and business messaging records may demonstrate acknowledgment of the debt, requests for additional time, proposed payment schedules or acceptance of invoice amounts.

Preserve these communications in their original form.

Account Reconciliations Can Strengthen the Claim

Signed account confirmations or other acknowledgments may become significant evidence.

Foreign creditors should preserve any reconciliation documents exchanged with the Turkish debtor.

Watch Limitation Periods

Do not allow prolonged negotiations to create complacency about limitation periods.

The applicable limitation period depends on the legal nature of the claim and should be calculated separately for each receivable where necessary.

Payment Negotiations Should Preserve Legal Rights

If the debtor requests installments, the settlement documentation should identify the acknowledged principal, currency, interest treatment, payment dates and consequences of default.

Avoid vague payment plans.

Obtain Security Where Possible

If the creditor agrees to additional time, consider requesting appropriate security.

Depending on the transaction, this might involve a guarantee, pledge, acknowledgment or another legally suitable mechanism.

Foreign Companies Should Investigate the Debtor’s Assets

Before spending substantial time on litigation, assess whether the Turkish debtor has recoverable assets.

Bank accounts, receivables, vehicles, real estate, company shares and other assets may become relevant to enforcement strategy.

Precautionary Attachment May Be Important

Where the legal requirements are satisfied and there is a genuine collection risk, precautionary attachment may be considered.

This can be particularly important where a debtor appears to be transferring assets while delaying payment.

Evidence of Asset Dissipation Should Be Preserved

Record suspicious transfers, company restructuring, asset sales and other developments suggesting that collection may become more difficult.

Timing can be crucial.

Consider Arbitration and Jurisdiction Clauses Before Filing

A foreign creditor should verify whether disputes must be heard by Turkish courts, foreign courts or an arbitral tribunal.

Starting proceedings in the wrong forum can cause significant delay and expense.

Foreign Judgment or Award Enforcement May Be Necessary

If the contract provides for proceedings abroad, the creditor may later need recognition or enforcement in Turkey against Turkish assets.

This should be considered when designing the original dispute strategy.

Currency Risk Continues During Litigation

Commercial litigation can take time. A creditor should therefore assess the financial effect of currency movements throughout the expected dispute period.

Legal strategy should be coordinated with treasury and accounting decisions.

Settlement Amounts Should Specify Currency Clearly

A settlement should state precisely whether the debtor must pay USD, EUR or another currency, or a local-currency equivalent.

If conversion is permitted, specify how and when the rate will be determined.

Avoid Ambiguous Phrases

Terms such as “equivalent value” can create unnecessary disputes unless the contract specifies the relevant date and exchange-rate source.

Precision is particularly important for high-value claims.

Tax and Accounting Consequences Should Be Reviewed

Interest, exchange-rate differences and settlements can have accounting and tax consequences.

Legal recovery strategy should therefore be coordinated with the company’s financial advisers.

Foreign Supplier Agreements Should Include Currency-Risk Provisions

For future transactions, contracts should clearly address:

payment currency, maturity, default, interest, conversion rules, bank costs, security, dispute resolution and consequences of delayed payment.

Preventive drafting is considerably easier than litigating an ambiguous invoice years later.

Immediate Action Plan for an Unpaid Foreign-Currency Invoice

A foreign creditor facing an unpaid invoice in Turkey should immediately review the contract, confirm that the foreign-currency denomination is legally valid, identify the maturity and default date, preserve invoices and delivery evidence, calculate principal and potential interest separately, evaluate exchange-rate exposure, issue any necessary payment notice, investigate debtor assets, consider precautionary measures and choose the appropriate enforcement or litigation route before limitation or collection risks increase.

Frequently Asked Questions

Can a foreign company claim an unpaid USD or EUR invoice in Turkey?

Potentially, yes. The underlying contract, applicable foreign-currency rules and nature of the transaction should first be reviewed.

Does the creditor have to convert the debt into Turkish lira?

Not necessarily in every case. The legal basis and enforcement strategy for the particular foreign-currency obligation should be examined before making a conversion decision.

Which exchange rate applies?

The relevant rate and conversion date depend on the legal basis of the claim and the procedural circumstances. There is no universal answer for every unpaid invoice.

Can interest be claimed in addition to the foreign-currency principal?

Potentially. The applicable contractual and statutory interest regime should be determined for the particular transaction.

Can the creditor charge the interest rate written on the invoice?

Not automatically. The contractual relationship and mandatory legal limitations should be reviewed.

Can currency depreciation be claimed separately?

Currency effects and interest should be analyzed separately. Whether an additional loss can be claimed depends on the applicable legal basis and evidence.

What if the Turkish debtor disputes the invoice?

The creditor should rely on the underlying contract and evidence of performance, including purchase orders, delivery records, customs documents, correspondence and account confirmations.

Can assets be frozen before the case finishes?

Where the statutory requirements are satisfied, precautionary measures such as precautionary attachment may potentially be available.

Should the creditor accept installments?

That is a commercial decision, but any payment plan should acknowledge the debt clearly and regulate currency, interest, payment dates, security and consequences of another default.

What should a foreign creditor do first?

Determine the exact currency obligation, maturity date and applicable interest regime before commencing enforcement. A poorly structured demand or premature currency conversion can materially affect the economic value of a high-value foreign-currency receivable.

Client-Focused Legal Support for Foreign-Currency Receivables in Turkey

Unpaid international invoices can involve currency fluctuations, default interest, enforcement proceedings, debtor objections, precautionary attachment, asset recovery and cross-border jurisdiction issues. Fırat Fesih Kaya Law Office assists foreign companies, exporters and international creditors seeking recovery of commercial receivables from Turkish debtors. Lawyer Fırat Fesih Kaya provides legal assistance in reviewing foreign-currency contracts, calculating and structuring claims, commencing enforcement or litigation, seeking precautionary measures and negotiating secured payment arrangements.

Phone: +90 312 434 22 22
Mobile: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No:221, Yıldırım Tower, Office No:148, 06520 Balgat, Çankaya, Ankara, Turkey