With the Communiqué Amending the Communiqué on Principles Regarding Venture Capital Investment Funds (Communiqué Amendment) published in the Official Gazette dated September 21, 2024 and numbered 32669, certain amendments were made to the Communiqué on Principles Regarding Venture Capital Investment Funds (Communiqué). With the Communiqué Amendment;
Venture Capital Investment Funds’ Investments in Foreign Companies Made Easier
- In order for a foreign investment to be considered as a venture capital investment, it is deemed sufficient for at least 51% (formerly 80%) of the assets of the investee company to consist of subsidiaries or affiliates incorporated in Turkey according to the most recent annual financial statements or the financial statements of the company closest to the date of investment.
- The proportion of investments that can be made in companies with development potential, which are not included in the scope of venture capital investments, are located abroad and are not traded on the stock exchange, has been increased from 10% to 15% of the total value of the fund. These investments will not be included in venture capital investments. However, this ratio shall not be applied to the investment of the fund’s outstanding participation shares by real or legal persons residing abroad:
- In case of ownership from 20% to 30%; 30%
- In case of ownership from 30% to 50%; 50%
- In case of ownership from 50% to 80%; 80%
- In case of ownership of 80% or more; 100%
and it is accepted that these investments will be considered as venture capital investments and will be included in the relevant limitations.
- It is regulated that the foreign venture company to be invested in shall not be required to be a joint stock company or a limited liability company, and the conversion of foreign limited liability companies into joint stock companies shall not be mandatory.
- While a maximum of 10% of the fund’s total value could be invested in non-resident, unlisted companies with development potential, this ratio was increased to 15%.
Investments with SAFE (Simple Agreement for Future Equity) Agreements Recognized as Venture Capital Investments
- Provided that they comply with the provisions of the legislation and without prejudice to the provisions of other legislation, investments made through contracts that give or will give the right to become a partner in venture companies in the future are considered as venture capital investments.
Umbrella Fund and Fund Basket Establishment Authorized
- Venture Capital Investment Funds can be established as umbrella funds or fund baskets. The aim is to increase investments in venture capital companies.
Minimum Resource Commitment Regulated and Collection Period Shortened
- The total amount of resource commitment to be received from qualified investors has been increased from a minimum of TL 5,000,000 to TL 50,000,000.
- In cases that may result in a breach of the minimum or maximum investment limitations of the GCIF, it has been regulated that no additional or new investment shall be made, and that a maximum period of 1 (one) year may be granted to the Capital Markets Board for additional time application. On the other hand, the minimum fund commitment collection period, which was regulated as 2 (two) years from the date of the first sale of fund units, has been shortened to 1 (one) year.
The Concept of Fund Issuance Agreement Has Been Introduced
- The requirement of issuing an investor information form in the previous version of the Communiqué has been removed. The concept of fund issuance agreement has been introduced.
Venture Capital Investment Funds Are No Longer Allowed To Invest In Real Estate and Contracting Companies
- According to the latest annual financial statements, companies with at least 40% of their total assets consisting of real estate and/or real estate-based assets and companies whose main activity is contracting cannot be considered as venture capital companies. In this context, Venture Capital Investment Funds to be established after 21/09/2024 will not be able to invest in real estate and contracting companies and investments prior to this date will not be considered as a violation.
