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Legal Alerts

Crowdfunding Regulation On The Way

Legal Alerts
Capital Markets

The Turkish government began planning an omnibus bill regulating crowdfunding to connect young entrepreneurs that have innovative business plans with investors who are able to support them.

Crowdfunding is an alternative financing method providing financing to entrepreneurs from various sectors – primarily technology – who have encountered difficulties in accessing traditional financing instruments after the 2008 financial crisis.

Several countries such as the U.S. and the U.K. have implemented crowdfunding out of which they obtain favorable outcomes. Turkish entrepreneurs will be able to raise funds nationally and globally through the crowdfunding platforms that will be established upon the permission of the Capital Markets Board (“CMB”). Recent studies regarding the establishment of the legal infrastructure propose that the crowdfunding system, which is subject to many models, should initially be based on partnership.  The legislation also aims to increase funding opportunities for women entrepreneurs. After the legislation is finalized, the CMB will determine the procedures and principles of crowdfunding through secondary regulations and will surveil and supervise the system.