Crowdfunding, which is an alternative solution for funding problems of start-ups and social projects, is regulated by Capital Markets Board (“CMB”) in Turkey. On 3 October 2019 CMB has issued the Communiqué on Equity Based Crowd Funding (the “Communiqué”).

Pursuant to the Communiqué, companies acting as intermediaries for crowd funding and providing digital services, i.e., the platforms, have to be listed by the CMB.

The Communiqué stipulates provisions concerning listing procedures, shareholding and management structures, essential elements of their fields of activity, prohibited fields of activity, restrictions on investments and investors, liabilities and fund-raising processes of the crowd funding platforms.

Platforms should satisfy the prerequisites specified in the Communiqué and maintain effective auditing, transparency, public disclosure and accountability mechanisms.

The Communiqué forbids investing in crowdfunding projects abroad by residents in Turkey.

Except for the accredited investors, provided that it does not exceed 100,000TL, investors are permitted to annually invest up to 10% of their annual net income as they declare to the platform.

The Communiqué seems to have achieved positive certainty by prioritizing technology-based start-ups, highlighting corporate governance principles such as auditing, transparency, accountability, protecting small investors and supporters which could me more inclined to crowd funding, and introducing specifications on and reasonable restrictions on fields of activity of platforms.