08 October 2019

 The Communique On Equity Based Crowd Funding

One of the key hurdles that entrepreneurs who start-up a new business or develop a new product/technology is procurement of financing.  In traditional processes, entrepreneurs approach to rather limited sources such as banks, angel investors, for financing.  Through the crowd funding, which has become common recently around the World, entrepreneurs can access to a larger group of sources using different platforms. 

In Turkey, the legal framework of crowd funding has been made with the amendments to Capital Markets Law No.6362 made in 2017.  The Communique on Equity Based Crowdfunding numbered III-35/A.1 (the “Communique”) which has been prepared by the Capital Markets Board (the “CMB”) and entered into force upon being published in the Official Gazette dated 3 0ctober 2019 sets out the regulations for implementation of equity based crowd funding that is one of crowd funding type in Turkey. 

The Communique regulates only equity based crowd funding. The activities of collecting funds for reward or donation through crowd funding platforms without any shares are not subject to the provisions of this Communiqué.

The procedures and principles of the equity based crowd funding, crowd funding platforms, the activities of the crowd funding platforms, subscription to the such platforms, campaign process, funding limit and venture firms and the audit and control of the funds as to whether they are utilized in accordance with the declared purposes are regulated under the Communique.

Below are the highlights of the key regulations introduced under the Communique:

Crowd funding Platforms

  • The crowd funding platforms (“Platforms”) are required to apply to the CMB for registration to the list in order to carry out the activities under the provisions of this Communiqué.
  • Platforms shall be established as a joint stock company with the registered shares and with a minimum paid-in capital of TL 1.000.000.
  • Platforms cannot conduct activities other than crowd funding transaction, except for consultancy services to be provided to venture capital firms or investors.
  • The trade name of the Platforms shall include “Crowd funding Platform”. The articles of association should be in line with the provisions specified under the Communique.
  • Shareholders and board of directors members of the crowd funding platforms should satisfy all conditions specified under the Communique and the board of directors should be consist of at least 3 members and an investment committee must be incorporated.
  • Participation banks and broadly authorized intermediary institutions may also apply to CMB for the registration to the list subject to satisfy the certain conditions stated in the Communique.
  • Platforms cannot provide evaluation, analysis and comments to investors related to venture firms or projects which may be interpreted as investor advice.
  • Platforms cannot act as intermediaries to the secondary market transactions regarding shares except for broadly authorized intermediate institutions.


  • Both real persons and legal entities can conduct crowd funding activities over the Platform.
  • No requirement of being a Turkish resident for investors who will conduct crowd funding activities over the Platform.
  • Investors are obliged to become a member electronically to the relevant platform in order to carry out crowd funding activities.
  • Non-qualified real investors may invest a maximum amount of TL 20,000 within a calendar year through the equity based crowd funding. However, this limit may be increase up to TL 100.000 subject to an investor’s declared net annual income.

Entrepreneurs and Venture Firms

  • Real person entrepreneurs resident in Turkey and venture firms incorporated in Turkey in the form of joint stock company, which satisfy the requirements set out under the Communique can initiate campaigns to collect funds in the Platform.
  • In order to receive the funds collected through the Platform for the Projects, a venture company needs to be established and other procedures set out under the Communique need to be carried out.
  • The venture firms that will collect funds through crowd funding based equity shall be engaged in technology and/or production activities. Such firms shall be established within the last 5 years and have a registered website which is regularly controlled and updated.
  • (i) public companies, (ii) companies controlled by another legal entity and (iii) companies in which public companies and capital market institutions have significant influence cannot collect funds through equity based crowd funding.

Collecting Funds

  • The entrepreneur or venture firms, who wants the campaign to take place in the Platforms, submits its application to the platform. The campaign period starts on the date the information sheet approved by the investment committee is published on the campaign page and crowd funding campaign cannot run for more than 60 days.
  • A report must be prepared by the entrepreneur or venture firms regarding the purposes for which the funds to be collected will be used and this report must be published on the campaign page as of the start date of the campaign period.
  • The funds collected cannot be used directly or indirectly for the purchase or financing of real estate, real estate rights and real estate projects.
  • In the case of fund requests exceeding TL 1,000,000, the amount corresponding to at least 10% of the targeted fund must be met by qualified investors during the campaign period. This obligation does not apply to the additional funds collected.
  • Establishment of venture firm must be completed prior to transfer of funds collected through the Platform and such funds shall only be transferred to the venture firm in return for the shares to be issued as a result of the share capital increase. The funds cannot be collected through the sale of existing shares of the venture firms. Funds provided from the investors shall be fully paid in cash in exchange for the shares of the venture firms.

Scope of the Communique

  • The crowd funds transactions that Turkish residents participate through the platforms which are located outside of Turkey will not be within the scope of the Communique provided that such platforms have not operate in promoting, advertisement and marketing activities for the residents in Turkey and acted in accordance with their own will.
  • Establishing a workplace in Turkey by foreign platforms, incorporating a Turkish website, promoting ve marketing activities regarding crowd funding activities directly or through persons or institutions resident in Turkey, will be deemed as activities for residents in Turkey and the provisions of Communiqué shall apply.                                                                                 


For further information, please contact:

Attorneys at Law
+ 90 (212) 236 36 44

Levent Mah. Sülün Sok. N.23
34330, Beşiktaş/Istanbul

This client alert provides very brief and generic information on certain recent legislative developments, for informational purposes only and is not intended and should not be construed as a legal advice.