Name
Global FinTech Guide
Country _ Name
Turkey
SectionTitle
Crowdfunding/crowdinvesting/crowdlending
Body
FinTechs belonging to this category operate crowdfunding, crowdinvesting and crowdlending platforms on which money is raised to invest in various projects, mainly start-up companies and real estate projects.

Crowdfunding is not a defined financial service, but generally used to describe donation-based crowdfunding (the investor donates the money to the project), reward-based crowdfunding (the investor receives an often symbolic consideration for his investment), equity-based crowdfunding (crowdinvesting: the investor participates in the profits of the financed project or acquires shares or debt instruments) or lending-based crowdfunding (crowdlending: the investor is reimbursed at the end of the project with or without interest).

Introduction

Attitude of the country towards crowdfunding, crowdinvesting and crowdlending platforms

Equity-based crowdfunding was introduced to Turkish law with the amendments dated 2017 to the CML and defined as 'collecting money from the public through crowdfunding platforms, without being subject to the provisions regarding investor compensation, in order to provide funds needed by a project or venture company'. And recently, in October 2021, debt-based crowdfunding finally introduced in Turkish law. Debt-based crowdfunding is defined as 'Raising money from the public through platforms in exchange for crowdfunding debt instruments'.


Legal affairs

Obligations and requirements to provide crowdfunding, crowdinvesting and crowdlending platforms described above

Duly authorised platforms can conduct equity-based and debt-based crowdfunding. Natural persons who are not qualified investors can invest a maximum of TRY 50,000 (approx. EUR 1,066) in a calendar year through debt-based crowdfunding. However, this limit can be applied as 10% of the annual net income declared by the investor to the platform, provided that it does not exceed TRY 200,000 (approx. EUR 4,266). Natural persons who are not qualified investors can invest a maximum of TRY 20,000 (approx. EUR 426) in a project through debt-based crowdfunding.
In order for the CMB to allow the establishment of the platforms, the following conditions should be fulfilled.

  • It must be incorporated as a joint-stock company,
  • Its capital must be at least TRY 1 million (approx. EUR 21,333) and fully paid in cash, and its shareholders' equity must not be less than this amount,
  • All of its shares must be registered,
  • It must have the phrase 'Crowdfunding Platform' in the trade name,
  • In the Articles of Association, the subject of the operation is specified as intermediation for the crowdfunding activities based exclusively on shares and/or debt,
  • Its founders must have the qualifications specified under the CML and relevant legislation,
  • It must establish a board of directors consisting of at least 3 people.

Additional comments regarding the legal situation for crowdfunding, crowdinvesting and crowdlending platforms or what FinTech’s must be aware of in this business area
Crowdfunding is a rather new and growing area. The Communiqué on Crowdfunding No III-35/A-2 regulates the procedures and principles regarding equity and debt-based crowdfunding, the listing and activities of crowdfunding platforms, the collection of money from the public through equity-based crowdfunding, and the supervision and auditing required to ensure that the collected funds are used in accordance with their declared purpose.

On January 2022, the first platform was authorised by the CMB for debt-based crowdfunding.


Economic conditions

Market size for crowdfunding, crowdinvesting and crowdlending platforms and biggest companies in this business area

There are no current studies directed specifically to Turkish crowdfunding market. The global market is projected to reach USD 20 billion in 2025. According to the CMB’s list, the number of accredited equity based crowdfunding platforms amounts to 19.

Additional comments regarding the economic situation for crowdfunding, crowdinvesting and crowdlending platforms or what FinTech’s must be aware of in this business area

This area is full of opportunities as a newly formed and a growing market.



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