Amendments to the Communiqué on the Principles of Venture Capital Investment Funds

The Communiqué (III-52.4.C) on Amendments to the Communiqué (III-52.4) On Principles of Venture Capital Investment Funds ("Amendment") was published in the Official Gazette on September 21, 2024, and has entered into force. With this amendment, several changes have been made to the Communiqué on Principles of Venture Capital Investment Funds ("Communiqué"). These changes are aimed at increasing investments in funds in Turkey and include the following key modifications:

I. Venture Capital Investment Funds (VCIFs) can now be established as umbrella funds, similar to securities investment funds. This will allow the shares of newly established VCIFs to be set up under a single internal regulation, shortening the process of establishing new funds.

II. Investments can now be made through agreements that grant the right to acquire shares in a startup company that has not yet been established, and these investments will be considered as venture capital investments.

III. Previously, under the Communiqué, at least 80% of the assets of foreign-established venture companies had to be located in Turkey, but the Amendment has reduced this requirement to 51%.

IV. The minimum amount of funds to be sourced from qualified investors has been increased from TRY 5,000,000 to TRY 50,000,000, and the collection period has been shortened from two years to one year.

V. Provisions in the Communiqué regarding the preparation of the investor information form have been removed. Instead, a standard Fund Issuance Agreement, which can be executed individually or collectively between the investor and the VCIF, has been introduced by the Amendment.

VI. Investments of up to 15% of the total fund value can now be made in non-listed companies with growth potential that are based abroad.

VII. New restrictions have been introduced regarding investments made by VCIFs into other VCIFs.

The content of the newsletter has been prepared for general information purposes. If you want to learn more about compliance and legal advice, or if you want to be involved in compliance processes, consult your lawyer.