As of August 26, 2016, Turkey is establishing a sovereign wealth fund under the name Türkiye Varlık Fonu (Turkey Wealth Fund Administration Joint Stock Company) (the "Fund"). The joint stock company which will be managing the fund, Türkiye Varlık Fonu Yönetimi Anonim Şirketi (Turkey Wealth Fund Administration Joint Stock Company) (the "Company") is established with the Law No. 6741 on Establishment of Turkey Wealth Fund Administration Joint Stock Company and Amendment of some Laws (published in the Official Gazette dated August 26, 2016 and numbered 29813) (the "Law"). By this, Turkey has joined the twenty-first century state policy trend of incorporating sovereign wealth funds for use of public assets and resources in internal and external markets. Notorious and economically powerful examples of sovereign wealth funds have been established particularly in the developing states within first decade of the century such as China Investment Corporation, Qatar Investment Authority, Pusat Investasi Pemerintah (Indonesia), Korea Investment Corporation (South Korea), Fundo Soberano do Brasil (Brazil), State Capital Investment Corporation (Viet Nam), FoMePE (Mexico), Russian National Wealth Fund, Samruk-Kazyna (Kazakhstan), Public Investment Fund (Saudi Arabia), Fondo Oman Investment Fund, Khazanah Nasional Berhad (Malaysia), Investment Corporation of Dubai,  These have been operating in a growing manner ever since.

The Company is established with TRY 50 million capital (approximately USD 17 million) and fully owned by the Turkish Privatization Administration. The Company, while managing the Fund, generally authorized to engage in all kinds of commercial and financial activities in national and international primary and secondary markets, including but not limited to acquisitions, capital market and finance instruments, monetary market transactions, real estate transactions, project developments and financing transactions. The Company may procure services within its fields of activity. The Company shall operate in line with professional governance principles per private law provisions and therefore is not part of the general public law regime. Accordingly, as set forth in Article 4/3 of the Law, guarantees, pledges, surety and mortgages may be established on/in respect to the Fund portfolio. A similar regime goes for employment and inspection regimes related to the Company and the Fund – the Company/Fund will be subject to independent private inspection (not to the Court of Accountants inspection unlike other state institutions and its employees will not be subject to the legal

While the Company is already established by the Law, the Fund will be activated once the internal by-laws of the Fund is registered by the Company to the trade registry. Sub-funds may be established as may be deemed fit. Further details on the Fund will be determined with a decree by the Council of Ministers. The operational scope of the Fund will be following the strategic plans, which will be prepared on a three-year basis by the board of directors of the Company. The Fund will be financed through a variety of resources: (a) institutions and assets to be transferred to the Fund and cash surplus from the Privatization Fund as determined by the High Council of Privatisation, (b) Surplus incomes, resources and assets of the public institutions as determined by the Council of Ministers, (c) financing and resources gained from capital and monetary markets in Turkey or abroad and (d) any other financing and resources provided through other methods.

Through a number of changes made in tax laws within scope of Article 8 and 9 of the Law, the Company and Fund (as well as sub-companies and sub-funds) will be exempt from a wide variety of tax obligations including stamp, income, corporate, VAT, bank and insurance transaction and real estate taxes as well as various charges related to title deed registry transactions, stock exchange quotations and registrations and litigation guarantees.

A point which may raise criticism may be the exemptions provided to the Company and Fund on the implementation of laws. Although having been made subject to private law provisions, rhe Fund and companies (as well as sub-companies and sub-funds) are deemed exempt from many regulatory legal frameworks including public procurement laws and the competition law (i.e. Law No. 4054 on Protection on Competition). Considering the wide scope of activity provided to the Company/Fund, existence of a state Company/Fund almost exempt from all taxes and not subject to public procurement and competition regulations may raise an unfairly significant disadvantage for private sector companies if the Company/Fund in the future is involved in a sector competing with a number of private entities.

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